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Non-essential e-tailers bear brunt of virus lockdown, Retail News, ET Retail


Non-essential e-tailers bear brunt of virus lockdownBENGALURU: In 2012, Rahul Mahant was looking to expand his father’s signage manufacturing business. But he was sceptical whether anyone would buy his products — fire exit signs for instance — online.

Eight years on, Clickforsign, which he turned into a separate business, earns annual revenue of around Rs 3.5 crore, almost entirely from online sales. However, Clickforsign has not received a single new order since March 22.

Mahant’s business is one among many online businesses that have abruptly come to a halt as e-commerce firms began deferring orders of non-essential items as the 21-day nationwide lockdown kicked in.

The shutdown is hurting everyone, but online sellers are bearing the brunt. “Our main concern is the shipments to warehouses that go in bulk. If they get damaged or stuck, our whole payment cycle will be disrupted,” says Mahant. “We haven’t got paid for those consignments that have gone out because sales are down, but we need to pay our suppliers to keep the business running.”

Jewels Kafe, a Rajasthan-based seller of imitation jewellery, has also seen hundreds of orders stuck in transit. Harneet Singh, the proprietor of Jewels Kafe, is concerned about returns as orders shipped out as early as March 15 remain in transit.

“I’m expecting a large portion of the orders that are stuck in transit now to come back as returns. Even after the lockdown ends, I don’t expect customers to come running back to buy from me, because just as how I am pinched financially, they will be too,” says Singh.

Jewels Kafe will lose Rs 10 lakh even with the lockdown ending on April 14. The moratorium announced by the RBI may help defer its equated monthly instalment or EMI in April, but salaries and rentals will burn a hole, Singh says.
“For all sellers, it’s a cash flow issue and it’s wrong for the government to expect to pay salaries. Their entire business has shut down and expecting loss-making sellers to keep paying salaries is wrong,” said a representative of the All India Online Vendors Association.

All leading marketplaces — Flipkart, Amazon and Snapdeal — have taken measures to limit damage to sellers, such as waiving off shipment fees on returns and storage fees.





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