Only small section of online sellers may start selling non-essentials, say industry executives

With many states yet to issue their guidelines for e-commerce companies and a large number of sellers being located in red zones, it is likely that only a small percentage of merchants on online platforms like Amazon and Flipkart will be able to start operations from May 4 and sell non-essential items, according to industry executives.

On Friday, the home ministry announced a two-week extension of lockdown but said there would be certain relaxations for orange and green zones. Under the latest rules, e-commerce activities in red zones, which cover large cities like Delhi, Mumbai, Bengaluru, Pune and Hyderabad, are permitted only for essential goods during the third phase of lockdown.

A senior industry executive, who did not wish to be named, said that while there are Centre's guidelines for e-commerce companies for the third phase of the lockdown, only few states including Karnataka, Rajasthan, Maharashtra and Uttar Pradesh have notified their guidelines so far.

This lack of clarity from other states could pose difficulty for e-commerce companies to resume full operations, the person said.

Another challenge for e-commerce companies that follow the marketplace model (like Amazon India, Flipkart and Snapdeal) is that many of their sellers are either located or have their warehouses in red zones. The home ministry guidelines issued a few days ago, remain unclear on operations of these marketplace sellers of non-essential products, who are in red zones. So, they are dependent on how local authorities issue their guidelines, the person said.

E-commerce platforms and many several consumer organisations have also been requesting the government for expansion of the list of essential products to include items like laptops, mobile phones and chargers as well as summer clothing to ensure people that do not have to step out of their homes amid the COVID-19 pandemic.

The person said that the addition of these categories will help customers, especially in red zones, to continue work and study from home and practice social distancing.

Another industry executive said e-commerce platforms have been engaging with seller-partners to prepare them for resumption in services.

The seller, if in the orange and green zone, will be able to see the locations they can service, while the customer will see products that can be delivered to them depending on their location, while other items may carry indicators saying the item cannot be delivered.

Srinivas Mothey, senior vice-president at Paytm Mall, said the company has already had discussions with its suppliers, logistics partners, and most importantly, offline shopkeeper base and they are all set to go online.

"We would be going live with key consumer demand categories like consumer electronics, laptops, home and fashion. These verticals and catalogues would be open to our customers besides continuing essentials. We would be taking new orders for non-essentials from Monday, May 4, and deliver in all green and orange zones," he added.

Mothey said most of its sellers in non-essential categories have confirmed their preparedness by updating their inventory and would be starting to go live on May 4 and the rest will follow suit over the coming week as zonal restrictions ease.

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"We have extended their processing times to pack and ship products by 2-3 days buffer, relaxed SLAs (service-level agreements), and penalty conditions on order processing temporarily. We are in the process of getting inventory updated and cataloguing their SKUs (stock keeping units) on the platform. Our logistics partners are in touch with them and will start the process of deliveries soon as we start getting orders," he added.

Walmart-owned Flipkart had welcomed the Centre's move to allow e-commerce companies to offer non-essential products in orange and green zones and said it is working with lakhs of sellers and micro, small and medium enterprises (MSMEs) across India and helping them prepare their businesses resume operations.

An Amazon India spokesperson has said millions of small and medium businesses and traders will be able to jump-start their businesses and livelihoods across their workforce after the relaxations coming in from May 4.

Emphasising that the company will focus on maintaining the "sanctity of the new guidelines around the red zones", Amazon India has also urged the government to consider the positive role e-commerce can play to get customers all priority products they need in the red zones as well to enable a stronger economic support for the small businesses while prioritising safety.

Under the first phase of the nationwide lockdown between March 24 and April 14, the government had only allowed delivery of essential goods through e-commerce platforms. On April 16, the Ministry of Home Affairs issued fresh guidelines for the current lockdown, allowing e-commerce deliveries and movement of trucks, but on April 19, it modified its order to allow online commerce companies to deliver essential items only till May 3.

Interestingly, traders' body CAIT had argued that e-commerce companies were misinterpreting the MHA guidelines of May 1 and "twisting (them) in their favour to misguide the various state governments and authorities and to create unnecessary confusion".

CAIT has sent a communication to Defence Minister Rajnath Singh (also chairman of the GoM on COVID-19) urging him to get the matter clarified by the MHA. It has also written to Home Minister Amit Shah and Commerce Minister Piyush Goyal.