India’s largest e-retail platforms like Amazon and Flipkart have suffered an estimated loss of at least $1 billion in gross sales due to 21-day lockdown to control the novel Coronavirus.
Despite online grocery seeing a spike in orders, it constitutes only about 10% of overall sales for e-retailers.
According to data compiled by American market research and advisory firm Forrester, the e-commerce sector in India, which is dominated by mobile phones, electronics, and fashion, are already estimated to have lost $400 million worth of sales during the last week starting with the ‘junta curfew’ on 22 March.
Several businesses, including online retail, came to a grinding halt after PM Narendra Modi last week announced a total lockdown to contain the spread of COVID-19.
Satish Meena, a senior forecast analyst at Forrester, said India’s e-commerce sector will continue to grapple with low demand and a disrupted supply in the near future.
Forrester now predicts a tepid 5% growth for the e-commerce sector in India in 2020 compared to an earlier estimate of 26% growth. The sector had grown 28% in 2019 to touch $32 billion in gross merchandise value (GMV) – a term used to indicate the total value of merchandise sold. Interestingly, the grocery sector, which is currently in high demand on online platforms, accounted for just 6% of the overall GMV in 2019.
Many e-retailers across segments, including Myntra and Firstcry, are not taking any new orders. Meanwhile, after multiple complaints of disruptions in operation by e-tailers and e-grocers, the government had allowed transportation of goods without the essential and non-essential distinction during the 21-day coronavirus lockdown.