Cover Story

Despite Loss, E-commerce companies all set to resume operation



Yasmeen Manzoor

Srinagar, May 18(KNB): E-commerce companies saw a streak of aspiration after the Central government announced new 4.0 lockdown guidelines removing all restrictions on online retail, as earlier the companies were ordered by government to halt sales of almost all items except groceries during the nation-wide lockdown imposed to combat novel Coronavirus.

Following the pandemic Covid-19, Indian Government imposed nationwide Lockdown restricting all business movement including e-commerce companies as that of Amazon, Walmart-owned Flipkart, Snapdeal, as well as vertical retailers including Lenskart, Nykaa, and Firstcry that has resulted in the biggest revenue impact in the international market while allowing such companies to sell only groceries and other essential items constituting less than 2-3% of their overall business as usual numbers.

Reports revealed, the biggest impact internationally for the world’s largest online retailer has been in India as the net sales increased 26 per cent to $75.5 billion in the first quarter ended in March 2020 compared with $59.7 billion in first-quarter 2019, net income decreased to $2.5 billion in the first quarter, or $5.01 per diluted share, compared with net income of $3.6 billion, or $7.09 per diluted share, in first-quarter 2019 with Flipkart and Amazon being able to recover only 20% of their sales a week after the May 4 order that allowed them to resume business in green and orange zones.

Moreover, Amazon is a leading e-commerce company in a statement that it hired an additional 175,000 new employees, many of whom have been laid off from other jobs following the giant nationwide lockdown.

However, e-commerce companies saw a ray of hope as in its latest guidelines issued by the Ministry of Home Affairs all activities except those specifically prohibited have been allowed while directing  states to take the final call on allowing businesses to function based on their local needs and situations.

Various Spokespersons of the online companies had stated that the move to reopen e-commerce will deliver a major boost to companies that were allowed to sell only essential goods since the lockdown was announced on March 24, even the opening up for non-essential sales had seen low demand from areas outside of red zones.

In a statement, MHA said, “E-commerce companies that were so far delivering only essential goods, have been permitted to deliver all goods, including those considered non-essential. However, these relaxations are not for the containment zones.”

Pertinently, Online sales will continue to be restricted in containment zones across the country, where only essential activities will be permitted, as per the latest MHA directives.(KNB)

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