Government imposed lockdown to curb Covid-19 initiated multiple speculations on its effect on economy. Experts believed that ecommerce will be benefiting from lockdown but current data seems quite different. E-commerce is expected to have an overall growth somewhere between mid-single digits this year which is about 35% lesser from 2019.
The biggest names in Indian e-commerce, Flipkart and Amazon are seeing a 10% reduction in deliveries post lockdown. The Gross Merchandise value (GMV) too has fallen to 5% on their products in last one month. GMV is indicative of the growth in the business and use of a particular website to sell products.
The companies are also losing money on delivery as well as the margins on food and fast-moving consumer goods (FMCG) is way lesser than what they earned from apparels and smartphones. Satish Meena, senior Forecast manager at Forrester Research commented that they have cut down the forecast already to 6.2% for this year and will be reviewing the same in mid-May. The trend could get worse if the companies are not allowed to sell non-essentials even after May 3.
This low growth is also expected out of the grocery and food products which people will continue to buy even after the lockdown is over and as this is not Flipkart’s and Amazon’s niche, it won’t be really beneficial for them. Amazon and Flipkart together make up to 85% of the value of products sold online.
Other e-commerce websites like Nykaa, Snapdeal, Myntra, Lenskart will see a downfall in growth as well considering the fact their goods come in non-essential category. It will be interesting to see the patterns once the lockdown gets over as the consumers will have their shopping list pent up. The local shops may benefit from this meanwhile as they’ll be allowed to operate.