SUMMARY
40% of sellers and warehouses are located in the red zone
Product availability might increase in the second week of the extended lockdown
Amazon and Flipkart are looking to lease over 3 Mn square feet of warehouse space
Covid19 Tech Impact
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Though ecommerce players welcomed the government’s move to allow delivery of non-essentials from May 4 in green and orange zones, questions have risen about logistics as 40% of sellers and warehouses are located in the red zones.
Although ops of behemoths like Flipkart and Amazon might not change drastically, a report by the Economic Times quoting unnamed industry sources reveals that ecommerce companies face serious ground challenges.
Meanwhile, Walmart-owned Flipkart told sellers, on Sunday (May 3), that it will start making all products live gradually based on the zones in which they are located. The ecommerce major also noted that the situation on the ground is dynamic and orders can be cancelled or returned if areas in orange or green zones move to red.
This has led to a sense of dismay among sellers. They are also aware of the situation and are not expecting normalcy at least before May 17. Experts suggest that while the availability of products will increase in the second week of the extended lockdown, a significant resumption will come only after May 17.
However, Confederation of All India Traders (CAIT) has alleged that ecommerce companies are misinterpreting the home ministry’s statement. The trade body said that ecommerce companies are twisting the notifications in their favour to deliver non-essentials in orange and green zones. Notably, CAIT has also launched its ecommerce marketplace bharatemarket which is yet to go live.
Leasing Warehouses To Facilitate Delivery
Meanwhile, Amazon and Flipkart have started to prepare for the bounceback. Both are looking to lease over 3 Mn square feet of warehouse space as they expect an increased demand for online orders after the lockdown ends.
According to another report by The Economic Times, Amazon is looking out for 2 Mn sq ft while Flipkart is in talks to lease around 1 Mn sq ft of warehouse space in major cities like Bengaluru, Mumbai, Hyderabad, Pune, Ahmedabad, Lucknow and Coimbatore.
These new facilities are expected to fully function by the end of this year with an aim to expand its presence in India. Both these projects are said to have initiated before the lockdown. Amazon and Flipkart are looking to book these warehouses for at least five years.
Amazon India has over 50 fulfilment centres which facilitate storage capacity of over 26 Mn cubic feet space across 13 states in India. Meanwhile, ecommerce players are also reportedly leasing out spaces for shorter durations to cope with demands.
