The 21-day lockdown in India that began on 25 March to battle the Novel COVID-19 pandemic may take a heavy toll on the e-commerce sector in the country, with online retailers staring at a loss of a massive $1 billion in sales during the period, according to a new research.
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.
Restriction on movement of goods and disruptions in supply chain have forced several online retailers like Flipkart, Amazon India, Myntra, BigBasket, Grofers, Nykaa, Pepperfry, among others, to temporarily suspend operations across the country. Moreover, they are also struggling with a shortage of delivery personnel as more and more migrants rush to their home states.
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.
“Smartphones and fashion contribute over 50% of sales on e-commerce. But both categories have now been hit due to low demand, and they are also facing supply issues. We don’t see demand for these products picking up at least for six months,” said Meena, adding that Forrester will take another look at trends in June to see if there has been any change in customer behaviour.
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 groceries sector, which is currently in high demand on online platforms, accounted for just 6% to the overall GMV in 2019.
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