Online retailers such as Amazon and Flipkart are preparing for a large-scale recovery after most states allowed them to sell items deemed non-essential, including Maharashtra, which has been the hardest hit by the Covid-19 pandemic. In fact, Mumbai is one of the largest markets for these companies.
Online sales of non-essentials have resumed in Delhi, Kolkata, Hyderabad, Bengaluru, Pune, and with a few restrictions in Ahmedabad as well. Chennai is the only major metro where e-commerce firms will not be allowed to ship non-essential goods till Lockdown 4.0 ends on May 31.
The spike from pent-up consumer demand over the last 50 days is likely to last for at least the next few weeks, following which these companies will have a clearer idea about consumer spending, which has been weak overall due to the ongoing crisis.
ET reported on May 18 that while players like Amazon had begun taking orders from Monday, rival Flipkart was awaiting state-specific guidelines to begin selling non-essential items.
“Most states have come out in favour of allowing e-commerce to open up,” said a senior executive at a leading e-commerce marketplace which began accepting orders for all products from Monday. “As things stand now, Chennai is the only major market where we will be allowed to sell only essential items.”
The opening up of major metros for online sales will provide a big fillip to the industry, which still derives 70% of sales by value from the top 10 cities.
“We are… geared up to meet the pent-up demand for priority products that customers need over a prolonged period of lockdown. The sellers on Amazon.in have seen orders for consumer electronics, kitchen and home appliances, smart devices, laptops, phone accessories, apparel. Work from home and online schooling enablers such as laptops, books, headphones and computer accessories continue to interest customers,” an Amazon India spokesperson told ET.
Flipkart and Amazon, India’s two leading online marketplaces, have lined up a slew of new smartphone launches to woo customers and drive up topline sales.
Close to half of their gross merchandise value (GMV) is driven by the smartphone category.
While Amazon is looking to notch up sales through the launch of the OnePlus 8, Xiaomi Mi10 and Redmi Note 9 Pro Max, rival Flipkart has lined up devices such as the Apple iPhone SE, Motorola Edge+ and Realme Narzo 10A for sale.
There are more smartphone launches planned, said executives and industry watchers.
“They (etailers) are looking at recovering topline sales and smartphones are a category that can do that for them,” said Neil Shah, VP of research at Counterpoint Research. “There is also pent up demand for smartphones, with around 20 million device sales getting hit in March and April and a further 10 million in May due to the lockdown.”
According to Counterpoint, e-commerce marketplaces Flipkart and Amazon could corner up to 55% of India’s smartphone market in the next two quarters as people prefer shopping online versus going to offline stores.
However, Shah estimates that only 140-145 million smartphones will be sold in the country this year, down from the 158 million devices sold in 2019.
Satish Meena, a forecast analyst with Forrester Research, agrees that smartphones will be the focus category for e-commerce marketplaces in the coming months. “With sales in categories like fashion and appliances taking a hit, smartphones are the category to focus on,” he said.
Separately, services marketplace Urban Company also said it had reopened services with respect to appliances repairs, plumbers, electricians, carpenters, cleaning and disinfection in all the cities it operates in as well as salon and beauty services in most cities barring Delhi, Mumbai and Chennai.
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