Coronavirus Lockdown: E-tailers fear ban on non-essential deliveries to hurt MSMEs

Coronavirus Lockdown: E-tailers fear ban on non-essential deliveries to hurt MSMEs

"Somehow the narrative instead of being public health has became "level playing field" between e-commerce players and offline retail," says Sanjay Sethi, CEO, ShopClues

The U-turn by Ministry of Home Affairs (MHA), where they revoked their decision on allowing delivery of non-essential goods by e-tailers during lockdown, has got many to question whether the decision was really to control the coronavirus pandemic.

Sanjay Sethi, CEO, ShopClues, while accepting the decision for everyone's good, highlights two issues with the change of plans by MHA. He says, "Somehow the narrative instead of being public health has became "level playing field" between e-commerce players and offline retail."

He adds that what is being forgotten is several e-tailers are marketplaces formed on the backbone of SMEs & MSMEs sellers. He says, "Restricting the merchants who can manage to scrap a livelihood, on the pretext that it is not level playing field, is very odd and counter-productive. In this crisis nothing is level, we all are adapting and doing our best." Essential goods which now comprise 100 per cent of their business, earlier contributed only to 15 per cent of their shipments before the lockdown.

He adds, "This revision has hit MSMEs the most, which ironically some players claims to be defending." ShopClues has more than 50,000 MSMEs listed on its platform.

Rajnish Wahi, Senior Vice President, Corporate Affairs and Communications at Snapdeal, says the change in guidelines is disappointing for the sellers on their platform, who are independent third-party entities and most of them have large offline businesses in the markets and bazaars of India. "Allowing them to activate their online channels will help them immensely with liquidity, will help move stocks and will lead to a gradual and orderly resumption of business operations with minimal contact with a large audience."

He feels that resumption of full-scale e-commerce operations is in the interest of both the buyers and sellers. He adds, that following the earlier decision 90 per cent of sellers at Snapdeal had updated their inventories and were ready to start shipping. He is now hoping that operations will be allowed to resume early next month.

But how will this decision impact the sellers?

Sethi of ShopClues says that businesses are hit hard as thousands of sellers have not made any sale in the last month. "Cash flow is frozen, supply chain is in chaos, confusion and anxiety has become normal."

He adds, "I strongly believe that risk/reward equation of our current narrow definition of essentials combined with restrictions on online and remote buying is skewed. Restarting economic flywheel will be extremely hard, and preventing MSMEs from leveraging e-commerce infrastructure will make economic recovery even worse."

Amazon India spokesperson said, "The new guideline will disappoint not only the consumers whose list of essentials had expanded to work from home and study from home products but also the thousands of small businesses, sellers and manufacturers across the country, who had geared up in the last 48 hours to provide millions of people with safe access to products."

While many firms like Flipkart and Amazon have stopped taking orders for non-essentials, Snapdeal is allowing consumers to order which will be delivered when permitted by the government. "This pipeline of orders serves as a guidance to our sellers with regard to anticipated consumer demand," says Wahi.

Srinivas Mothey, Senior Vice President, Paytm Mall, says that that the ambit of essential goods should be increased. "India is mostly working from home at the moment but many are finding it difficult as they are running low on certain items necessary to effectively operate under lockdown. Laptops, mobile phones and accessories, computer hardware, webcams, all these things should be allowed to be part of essential goods. If the lockdown continues, lack of proper technical support would hinder the efficiency of employees which in turn would affect a company's operations."

Sethi of ShopClues says the government needs to figure out how health and economics will co-exist in this environment. "Now, it time to leverage strong foundations laid by the government around Digital India, financial inclusion, education and commerce."

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