E-Commerce in Corona Virus Outbreak Times in India

Disruption in the supply of products by the E-Commerce - an overview.

As the supply chains got disturbed, major E-commerce platforms such as Flipkart and Amazon faced difficulties in supplying orders and suspended their services. Finally, the government sent the order that the supplies from the E-commerce shall be allowed. Flipkart re-opened its site after this announcement. But what is the reality?

The Reality

The E-commerce platforms can function now, but only essential items such as grocery, medical products etc can be sold. Amazon has prioritised its supply of products in which baby food, medical items and grocery come first and IT products come last, only before luxury items. This means IT products can’t be supplied yet and in any case, their import from China and their movement across the supply chain remains disrupted.

36% of the sellers feel their sales will decline. Amazon predicts a decline of 40%-60% decline in its sales. As far as the sale of IT products goes, their prospects are not optimistic. These are uncertain times for the IT industry.

Optimism Corner

However, it is being predicted and rightly so, that collaborative tools, activity trackers, backup services and other cyber security products shall rise in demand. With more and more people working from home and doing remote meetings, these products are naturally going to increase in demand similarly, online educational tools are going to increase in demand with children staying at home and having to study online.

“There's pretty good demand for collaborative tools, activity trackers, DLP, backup services and other cyber security products. There will be surely cashflow problems with credit risk going up several notches. We have released advances for all the lower salaries staff to tide over these tough times.”

--Vinay Bansal, CEO, Synapse

The Gloomy Future

With businesses having to spend over employees while their profits are dwindling, many SMBs operating on E-commerce may sink. There is a prediction that the Corona outbreak may wipe out most of the SMBs, many of whom operate on E-commerce platforms.

The businesses which deal with data analytics may fare well, as long as they don’t have to engage in supply of items and movement of products. But in uncertain times such as these, there is a tendency among the buyers to restrict expenditure and spend only on what’s the bare minimum, because the future is gloomy and they don’t know how long this is going to continue.

TataCliq had changed its selling model recently. Instead of giving a platform to the other sellers, it decided to sell by itself on its platform, targeting the high end clients for luxury goods. However, now with no movement of luxury goods, that model is going to run into deep waters.

It is too early to say what directions the E-commerce platform businesses wil take later in the year, when hopefully, the Corona outbreak shall subside. Whether it will try to get back to the older models, or whether it will devise new models to combat such crisis situations, remains to be seen.