Specialized online retail verticals, such as Lenskart, Myntra, Nykaa, Pepperfry, FirstCry and Zivame, which have a significant offline presence, have seen sales fall as much as 20% over the last two weeks, investors in the know and industry experts told ET.
In some cases, the decline has been as high as 35%, they said.
The downturn is expected to continue as people defer discretionary spending and companies cut marketing costs and discounts to increase runway in order to survive the Covid-19 pandemic, people in the industry said.
“Discretionary spending has taken a hit,” said Ambareesh Murty, CEO and cofounder of Pepperfry. “Right now, on a week-on-week basis, we are holding steady, but we do expect that in the next 2-4 weeks consumer spending will come down further,” he said.
Expansion plans are also on hold for the next two months, Murty added.
Offline retail constitutes about 30% of Pepperfry’s business. “These retail studios have seen footfalls drop by a third,” he said.
For eyewear retailer Lenskart, where offline is the primary sales channel, orders have plunged about 30%, an investor directly aware of the matter said.
At Nykaa, which sells beauty and cosmetics products through both online and offline platforms, sales have taken a hit of 20- 25% in the last week, sources said.
At fashion portal Myntra, orders are down 20%, according to people familiar with the matter. Nykaa and Myntra did not comment on specifics when contacted by ET.
“The only impact we have seen is in our offline channel,” said Amisha Jain, CEO of Zivame.
According to venture capital fund Matrix Partners, companies should plan for lower demand for a longer period as seen in China, which has had a two-month window with respect to the outbreak.
For services businesses, the decline has been even more drastic.
Taxi apps, for instance, have taken a 50% hit, hotel technology companies have seen a 65% fall, and the movie and ticketing businesses have declined by 80%, according to a report by RedSeer Consulting.
Ecommerce companies Flipkart and Amazon, too, have seen a decrease in demand, although the fall has not been as steep as that of online vertical commerce players since customers count on these etailers to deliver essential items.
Analysts said businesses were also at risk of running out of products on their platform as at least some part of their product procurement was dependent on external supply chains from China, Southeast Asia, South Korea and Sri Lanka.
“We continue to work with our partner brands and sellers …While efforts are on to keep operations as normal as possible, our focus in on ensuring the health and wellbeing of our employees and delivery partners,” a Myntra spokesperson said.
Companies like Lenskart, which manufacture eyewear in China, South Korea and Italy, have also been hit because of production delays.
Pepperfry has a 15% exposure to Malaysia and China for procurement, while Zivame sources some apparel from Sri Lanka.
Nykaa also lists many high-end global luxury brands on its platform, primarily from the United States and Europe.
“Companies need to define the extent and likely duration of their supply-chain exposure to areas that are experiencing community transmission, including tier-1, tier -2, and tier-3 suppliers, and inventory levels,” according to a McKinsey report titled Covid-19: Implications for business.
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