The online retail sector, which recorded $33.5 billion in sales in 2019, was expected to grow 26 per cent to $42.21 billion this year. However, the forecast is now down to just 5 per cent to $35.1 billion.
Even as the online retail sector has been battered due to the Coronavirus lockdown, India’s leading players in the e-retail segment including Swiggy, Zomato, Snapdeal, Amazon, Flipkart, and Paytm Mall are trying to minimize the impact on the income and livelihood of delivery personnel and merchants. The 21-day lockdown period, which is hurting the sales of multiple services, has left delivery partners and merchants or sellers on these companies in the lurch amid on-ground logistics and supply chain challenges.
Swiggy, for instance, has launched a relief fund called ‘Swiggy Hunger Savior Covid Relief Fund’ for its delivery partners and their families. The fund ensured up to 14-day income for delivery partners if contracted with COVID-19. Swiggy will also use the fund to provide food and grocery care packages to the delivery personnel and their families apart from providing medical/hospitalisation expenses related to Coronavirus for their parents and family members. “It is in times like these, that we come together to appreciate and support those who are putting their lives at risk to serve others,” said Sriharsha Majety, CEO, Swiggy in a statement who has committed 50 per cent of his annual salary towards the fund. The company has aimed at Rs 10-crore corpus for the fund out of which more than Rs 4 crore has already been raised through the contribution from Swiggy founders and employees.
Zomato too is “starting a fund to cover up the lost earnings for thousands of our delivery partners,” founder Deepinder Goyal tweeted last week. For restaurants partnered with Zomato, Goyal said the company will “facilitate loans for our food delivery restaurant partners” that have been impacted because of “their immobilized workforce due to the lockdown,” he said.
Foodtech segment even before the lockdown saw 10-20 per cent fall in its services during the first two weeks of March in comparison to the first two weeks of February, as per a RedSeer report on Covid-19 impact on e-commerce. “After an initial spike in the first week, food delivery declined in the second and third week and expected to decline further,” it said.
“Foodtech is operating at 25-30 per cent capacity both in terms of the number of orders they deliver and the number of restaurants as customers are not ordering while there is only a limited number of restaurants. A large chunk of their orders came from offices for lunch which is not happening now. Even at home, customers are not ordering much as they are in fear mode,” Satish Meena, Senior Forecast Analyst had told Financial Express Online.
Flipkart and Amazon also are looking to reprieve their delivery partners impacted due to the Coronavirus. While Amazon had set-up a global fund of $25 million for delivery partners along with up to two-week pay for those diagnosed with Covid-19, Flipkart said it would give leave with full pay to delivery personnel if contracted or being quarantined.
Snapdeal and Paytm, on the other hand, have waived off penalties on merchants/sellers for cancelled orders or delayed orders as the logistical challenges amid the lockdown stretched their delivery schedules from few days to weeks. “Snapdeal has extended the timelines available to its sellers (from March 31 to April 15) for shipping the orders received by them,” a Snapdeal spokesperson told Financial Express Online. The penalty varies depending on delays, cancelling orders etc. The company is also receiving orders for other categories having 20 crore SKUs overall amid the lockdown, unlike Amazon and Flipkart which have restricted their services to essential products including groceries. However, Snapdeal doesn’t facilitate the sale of groceries on its platform.
Similarly, Paytm has extended the delivery timelines for existing orders till April 22. The company said over 1 lakh customer orders are yet to be processed by sellers but due to the “shortage of inventory or lack of logistics,” it said in a statement, the challenge is being faced. Hence, it has waived off the Service level agreement (SLA) which “is a commitment to follow the best practices and the metrics by which service is measured.”
The e-retail sector led by e-commerce companies such as Amazon and Flipkart is likely to suffer around $1 billion loss in sales during the 21-day lockdown. The online retail sector, which recorded $33.5 billion in sales in 2019, was expected to grow 26 per cent to $42.21 billion this year. However, the forecast is now down to just 5 per cent to $35.1 billion. “After taking in account of the lockdowns and the long term impact on spending we expect the growth rate to slow in 2020 to around 5 per cent,” Meena had said.