During the first wave of the pandemic, e-commerce played a crucial role in the fight against COVID-19, enabling social distancing and minimizing the need for citizens to step out by allowing contactless home delivery of goods. However, during the second wave of the pandemic, several states that went into lockdown, imposed certain restrictions on e-commerce which affected both consumers and businesses alike.
In view of these challenges, experts came together at The Dialogue, a research and public-policy think-tank, conducted a webinar on ‘Preparing for the third wave of a pandemic: Evaluating the role of e-commerce’, to touch upon four broad themes to highlight the true potential of e-commerce in successfully fighting the third wave of the pandemic.
E-commerce as a Resource for Consumers During Lockdowns
At a time when the Indian retail sector was struggling, e-commerce provided seamless delivery to consumers in a hassle-free and safe manner, maintaining strict health protocols. There has been a wider acceptance of e-commerce among all age groups as evidenced by several surveys conducted across India. Therefore, with the pandemic changing the consumption patterns across the country, home delivery of all products is essential to not only help cater to consumer needs but also serve the purpose of the lockdown by preventing people from stepping out.
E-commerce as a Source of Revenue for the Government and Small Businesses
With an increase in the adoption of digital channels by consumers of all age groups as well as sellers, e-commerce has come to be seen as a sustainable option. Restricting e-commerce would lead to the reduction of goods, and in turn, a decrease in the GST earned by the state governments, affecting businesses, state finances, and the economy at large.
E-commerce is also playing a critical role for MSMEs, creating employment opportunities, increasing exports, and enabling local MSMEs to restart their businesses amid the pandemic and scale up to a global level. There is a need to support MSMEs in manufacturing, and leveraging e-commerce to supply, distribute, and deliver goods to customers. Without conducive policies supporting MSMEs in place, their recovery will become increasingly difficult.
Essential vs Non-essential Items
The distinction between essential and non-essential items is getting blurred day by day. It is impossible to define ‘essential’ and ‘non-essential’ items due to their subjective nature. For instance, even as the lockdowns are imposed, a significant share of the population continues to work from home, dependent on the supplies of electronics such as laptops and mobile phones, chargers, stationery, etc. which don’t necessarily constitute ‘essential’. Therefore, it is necessary to either significantly broaden the definition or better, allow all home deliveries despite lockdowns.
Some of the key highlights from the discussion were as follows:
● COVID has led to a change in consumer behavior and now consumers rely on online shopping more than physical shopping.
● Definition of essential and non-essential commodities should be done away with. Lifestyles have changed due to the pandemic and this distinction creates unnecessary problems.
● E-commerce needs to penetrate beyond tier-1 cities. There needs to be a mapping of central and state-level regulations that apply to e-commerce to resolve their challenges.
● If e-commerce is relied upon in order to sustain access to goods during the pandemic, vaccination of e-commerce delivery personnel should be prioritized.
● E-commerce companies will have to become more active in capacity building among MSMEs along with state and central governments.
● There is a need to rethink our regulatory framework for e-commerce. Rules and regulations should be the same for domestic and foreign companies.
● E-commerce data can be helpful for the government and policymakers for the development of India.
Dr. Arvind Mayaram, Former Finance Secretary, Govt. of India said, “E-commerce is the next market revolution. There has been a behavioral change in consumption patterns among consumers which will exist even after the pandemic. However, in order to allow e-commerce to grow, the government needs to rethink certain policies. Firstly, the current regulatory framework is very heavy for the e-commerce sector, and for it to flourish, it requires a hands-off approach. Secondly, in order to strengthen the sector, uniform policies should be applied for all e-commerce companies, whether national or global. The third problem to the sector is that of overlapping provisions. Different jurisdictions targeting the same sector lead to unnecessary confusion. Another issue is that e-commerce continues to be restricted to tier I and II markets when there is a need for it to reach tier III and IV markets as well. State and central governments need to work to map outlaws/ policies in favor of e-commerce. On its part, the e-commerce sector should work with the government to build capacity for MSMEs in order to drive the economy of the country.”
Dr. Aruna Sharma, IAS, Former Secretary to the Government of India, said, “A strong preparatory regime needs to be in place, which includes training of staff all over the country. Furthermore, the list of essential items should be made more comprehensive and holistic to have a smooth flow and optimize the use of e-commerce platforms to ensure supply chain.”
Speaking on this, Kazim Rizvi, Founding Director, The Dialogue, highlighted, “While lockdowns are seemingly the only way to break the chain of COVID spread across the country, the government must also focus on guidelines to support small businesses and ensure the needs of the citizens are registered. With the health and safety of all taking precedence, measures must also be taken to sustain livelihoods. This is the time to lend a helping hand to small businesses and ensure their interests are safeguarded.”
Ram Rastogi, Digital Payments Strategist, stressed, "The pandemic-induced lockdown and movement curbs needed for social distancing marked an inflection point for e-commerce in India, pushing demand to record highs deep into smaller cities and towns. Nudging new buyers as well as sellers onto digital platforms brought about a "structural shift" in shopping behavior with more and more customers and businesses relying on e-commerce. The opportunities, however, came fraught with new challenges. The nationwide lockdown brought the transportation of goods and the movement of personnel to a grinding halt. There were initial hiccups and e-commerce companies struggled to complete deliveries even as orders piled up. During the first two phases of the lockdown, e-commerce companies were allowed to sell only essential items like grocery, healthcare, and pharmaceutical products. Various micro-enterprises and small enterprises in the country, selling non-essential items, were deprived of selling their products on e-commerce platforms. In my opinion, there should not be any difference in essential and non-essential items in long phases of lockdowns where the needs may vary and the effect of restrictions on small businesses registered on e-commerce platforms.”