India Lockdown: Here’s how small businesses are bleeding due to the e-commerce shutdown

After India’s Prime Minister, Narendra Modi, announced a complete lockdown of the country for 21 days, major e-commerce companies have decided to take an unfortunate but inevitable call. They’ve pretty much-shut operations and are dealing with authorities to find a midway.

Thankfully, the Ministry of Home Affairs has exempted delivery of all essential goods through e-commerce sites during the curfew. The Ministry of Electronics and IT recognised critical e-commerce activities like delivery, warehousing, operations, and shipping as essential functions and asked state governments to cooperate. It further requested local authorities to treat invoices or waybills as evidence.

The lockdown means only essential goods like groceries, vegetables, and medicines will be available. All other services remain suspended to discourage people from getting outdoors. Only “essential” personnel like the police, firefighters, municipal workers, and financial services staff are allowed to work, but with proper precautions.

How have the marketplaces responded?

• Amazon India declared it has momentarily stopped taking orders and disabled shipment of low-priority products as it concentrates on the delivery of fundamental items like household staples, hygiene and other high-priority products. This comes into effect immediately. It means you may be able to order products under the “Amazon Pantry” service as well as other essential commodities that come under healthcare, hygiene, and personal safety. All other products are “low-priority” now. These may include anything ranging from mobile phones to clothing.
• Flipkart, on the other hand, has completely stopped accepting new orders. They justified the suspension by saying they’ll gradually start opening essential categories. The company hasn’t revealed how long the suspension will last.
• Paytm Mall is among the marketplaces to have taken a massive blow since it doesn’t have a delivery and logistics chain of its own. Unlike Amazon and Flipkart, sellers on Paytm Mall rely totally on third-party courier services like Bluedart, Delhivery, Xpressbees, and more.
• Balfour Manuel, MD of Blue Dart Express, said: “Many of our customers have informed us that they are closing their production facilities and warehouses. Because of the developing situation, we have decided only critical pharmaceutical/medical equipment is already in our custody, and our network will be prioritised for delivery.” Even shipping giant Maersk has asked its customers to expect delays as sufficient staff isn’t available at important ports like JNPT.
• Hyperlocal delivery companies like Grofers and BigBasket are unable to complete their orders due to local obstruction from the police. Their apps show pretty much every product out of stock or non-deliverable. Food delivery firms Swiggy and Zomato are facing the same issue.
• Grofers said that its delivery agents were stopped and arrested by the police across the country a few days ago, leading to a delay of over 60,000 orders.
• Grocery and milk delivery provider MilkBasket was forced to dump 15,000 litres of milk and 10,000 kg of vegetables because they just couldn’t be delivered.

All of these companies have said one thing in common: local law enforcement is hindering the movement of goods, and delivery agents are frequently harassed. Sellers say the police and local authorities are forcefully shutting down warehouses and distribution networks despite the central ministry’s order. Due to the inefficiencies of the local authorities, businesses are losing money in an already deteriorating economic situation.

Despite assurances that grocery is an essential service and @grofers should continue to operate, police and local authorities continue to shut warehouses. All the proactive initiatives of govt and central authorities is going to waste because of overzealous enforcement agencies.

- Saurabh Kumar (@theknownface) March 23, 2020

There have been numerous reports of local police even beating up delivery agents because they are apparently “defying” the lockdown. Even agents trying to deliver medicines are stopped at roadblocks. In the name of implementing and respecting the law, the police have seamlessly become the law. Delhi Police has officially said that people can go out to get essentials like groceries and medicines. Then why are delivery agents barred from doing the same?

There are nation-wide cases of police abusing the Epidemic Act and behaving like they own the streets. The judiciary has very conveniently even “ threatened “ to shut down courts because people are crowding. Instead of finding a solution, the Chief Justice of India chooses to deny justice to the people. The judges want to protect themselves, the government intends to defend itself, and what’s left are the goons in uniform who have no respect or basic human etiquette.

NCR (National Capital Region) is a tricky place since it consists of three states — Delhi, Haryana, and Uttar Pradesh. Inter-state travel is banned, and hence delivery agents need to obtain a Curfew Pass from the police after proving “genuine requirements”.

Getting these Curfew Passes is also proving to be extremely difficult. According to Arjun Jaiswal, the man behind popular food outlets like Baking Bad, Banging Burgers, and Como, the police guidelines require an entire staff list, visit the nearest police station, and get them signed off from the zonal DCP (Deputy Commissioner of Police). If the media has unlimited access based on an identity card, why do other essential services need to go through this elevated bureaucracy? And in the middle of a crisis, a simple online verification system shouldn’t take more than a day to set up.

How are the Small and Medium-scale Enterprises affected?

• I’ve directly been in touch with a few businesses who sell their products online on platforms like Amazon and Flipkart. In a nutshell, their business has come to a grinding halt, just like India’s aviation. There’s no courier network available anymore, a pivotal requirement to run an ecommerce business.
• A seller based out of Gujarat sells hospital-grade masks and sanitizers through Flipkart, and the sudden shutdown affects not only them but also the end consumer. In this case, a majority of their customers are doctors, nurses, and other medical professionals who are currently dealing with the Coronavirus pandemic. warpcore has verified these orders, and they come from every corner of the country.

• They went on to add that more than 2,000 of these products are packed and ready to ship. But, there’s no logistics network available — neither from Flipkart’s in-house team nor third-parties.
• Similarly, an electronic accessories maker based out of Delhi confirmed that their business had come to a sudden halt because all of their orders came online. Business operators say they have no other option but to reduce the salary of their workforce by a considerable percentage because there’s no cash flow left.
• The seller also added that e-commerce marketplaces are recommending partners to extend handling time or completely put their accounts on “vacation mode”. Sellers are also concerned that the government hasn’t announced any relief package yet, making it difficult for them to plan a contingency or business continuity plan. The ongoing crisis is unpredictable at this point and businesses are sure quite a few of them may not be able to survive the lockdown. However, each one of them has agreed that a lockdown is a need of the hour, and the government needs to ensure that local authorities don’t hinder essential logistics.
• Lastly, most of these sellers depend on goods that have been imported from China. For them, the demand from the Indian market has dropped to zero within no time, and they’ve started suspending all pending orders. Further, the cost of import such, including freight charges, cargo rent, offloading fees, and clearance cost have skyrocketed.

The message from India’s SME’s is clear. They understand the need for a lockdown since Coronavirus has already proven how powerful and deadly it can be. However, on-ground implementation with local law enforcement is a huge hurdle that’s discouraging people from working and delivering essential goods. In a way, India’s logistics have come to a stop.

We need the population to stay home. To encourage that, we need to ensure that door-step services aren’t disrupted. After Prime Minister Modi’s speech on March 24, hordes of people were seen in markets because of panic buying. These e-commerce services can eliminate crowding and actually fulfil the formula of social distancing. Not to forget, the employment they generate during an ensuing economic crisis.

Words by Shivam Vahia

Originally published at https://warpcore.live on March 25, 2020.