Facing curbs, ecommerce companies Flipkart and Amazon halt pickups from vendors, Retail News, ET Retail
Even as the country’s largest ecommerce marketplaces Flipkart and Amazon temporarily suspended logistics services for sellers across regions, citing operational constraints, the Retailers Association of India (RAI) estimated that about 25,000-30,000 supermarkets were impacted by the police order to close warehouses, which has led to disruption of supply chains across the country.
The RAI, which represents more than 5,000 modern retailers including Future Group, Reliance Retail and Shoppers Stop sent out a missive to various state governments protesting the closure of warehouses by authorities in Punjab, Maharashtra and Uttar Pradesh.
‘Situation Worsened in Past 36 Hours’
Ecommerce giant Amazon, in an emailed communication to its sellers on Sunday, said it will suspend its Easy Ship, Seller Flex and Fulfilled by Amazon (FBA) programmes for Monday. It is unclear as of now if the etailer will resume these services on Tuesday. Flipkart also halted order pickups indefinitely from areas where lockdowns had already been imposed, while rival Snapdeal said it was facing similar issues.
“In light of the development where Section 144 has been imposed in several cities, we will be halting our logistics operations for pick-up in those areas,” a Flipkart spokesperson said. “While this puts pressure on our other hubs to operate at more than the usual volumes, we are trying our best to ensure that we are able to meet the demand,” the person said. The big etailers typically offer these specialised services to sellers on their platforms, with an aim to speed up delivery to customers. “Such disruptions will now result in delayed deliveries,” said industry executives.
The development comes despite the operations of ecommerce firms and their vendors being exempt from Section 144 restrictions as per a notification from the consumer affairs ministry last week. On Monday evening, the Maharashtra government put out a detailed note saying ecommerce platforms delivering essential commodities such as milk, food and medicines should be exempted.
However, on the ground, all ecommerce companies are facing issues of dwindling strength of front-end staff who have had to deal with local authorities. The impact, which is more severe in the western region (especially in Maharashtra) and northern India (including Delhi-NCR) is likely to trickle down to the southern states in the next few days, people aware of the matter told ET.
Meanwhile, offline retailers too are facing the heat. RAI’s chief executive officer Kumar Rajagopalan said the association is yet to get a response from the state governments regarding the warehouses being shut and operations being hampered due to action by local authorities.
A Delhi-based FMCG trader said supplies from companies had come down due to transportation issues while several distributors and wholesalers had shut operations fearing the Covid-19 pandemic. “This is despite essential products being exempted from curfew or lockdown. Many traders are willing to take business losses but (will) not risk venturing out, which in turn is hurting supplies to kirana stores,” the person said.
ET had reported on March 23 that online grocers such as BigBasket and Grofers had to either cancel or reschedule thousands of orders on Sunday as the country went into lockdown mode and local authorities stopped delivery staff from moving around. Ecommerce firms have also complained about warehouse closures across the country.
“There has been major disruption and supply has come to a halt. Various warehouses of Flipkart and Amazon are shut,” said a major FMCG supplier to both Amazon and Flipkart.
A Flipkart executive, who did not want to be identified, confirmed to ET that the company was facing a major manpower issue. These concerns were mirrored by logistics companies that ET spoke to, which have been shutting warehouses. “The frontline staff which includes delivery partners and employees in warehousing do not want to come out and work. They are worried that they may get arrested and harassed by local authorities,” said the founder of a logistics company on the condition of anonymity. “This has been amplified in the past 36 hours,” he said.
The suspension of order pickups affects both essential as well as non-essential goods and has started to reflect on both Amazon and Flipkart in the form of extended delivery periods for consumers. A survey by LocalCircles on the availability of essentials on online platforms saw 35% respondents saying that they couldn’t get most or all products they were looking for.
“We are working with the local authorities to enable us to perform these important services, providing safety for our delivery associates and allowing them to make sure those priority goods can arrive safely at our customers’ homes without any disruption,” an Amazon spokesperson said.
Amazon had suspended its Fulfilled by Amazon (or FBA) programme in the US and Europe last week, saying that it will focus on delivering essential goods with its limited resources. An Amazon India spokesperson, however, told ET at the time that the announcement was not applicable to India.
“Uniform implementation, across various states and districts, of the central government advisory classifying ecommerce as exempt will help reduce disruption for buyers,” said a Snapdeal spokesperson.