BENGALURU: The 21-day lockdown announced by the Indian government to prevent the spread of coronavirus will cost the country’s e-commerce sector nearly USD 600 million in the next two weeks, according to market research firm Forrester.
There has been a loss of nearly $400 million over the past one week due to the slump in overall sales, especially after the government barred the retail and e-commerce industries from selling non-essential products. The slump in sales of products under non-essential categories — such as large appliances, smartphones, consumer electronics and fashion — which constitutes 70 per cent of the e-commerce sector in India, is likely to hit the industry in a big way.
Forrester’s research note, shared exclusively with TNIE, stated that it has downgraded the growth outlook for India’s online retail business by 20 per cent due to the Covid-19 impact. It said that India’s online retail business stood at nearly $33.5 billion in 2019 and was expected to grow by 26 per cent in 2020. “After taking in account of the lockdowns and long-term impact on spending, we expect the growth rate to slow in 2020, to around 5 per cent,” it added.
The usual supply chain disruptions for manufacturers and online retailers are also expected to pose huge problems for e-commerce companies, as they will struggle to fulfill the growing demand. The demand, as per the research firm, is likely to pick up only during the festival season in 2020 or next year.
“More and more Indians are turning towards online platforms to hoard essential supplies like groceries and personal hygiene products, and several start-ups are venturing into the segment. This will boost their sales by 30 per cent in 2020. But the share of groceries in the overall sector is very small. In 2019, the share of online grocery sales stood at less than $2 billion,” said Satish Meena, senior forecast analyst, Forrester.
Apart from BigBasket, Grofers, Amazon and Flipkart, start-ups like Meesho, Snapdeal, Shopclues and Zomato have also started selling groceries on their platforms to tap the growing market.