With the beginning of lockdown 3.0, the whole country is divided into Red, Green and Orange zones. Starting from 4th May 2020 lockdown 3.0 has been implemented with many relaxations with an objective to restart the economy.
Revised rules for ecomm deliveries
One of the major relaxations made by MHA caters to ecommerce industry as well. The government has announced the provision of lifting partial and compete ban on ecommerce activities. As per the latest directive, ecomm companies are eligible to deliver both essential and non-essential items in the zip codes following under green and orange zones.
However, the delivery of nonessential items is still prohibited in the red zones. All major metro cities including Mumbai, Delhi, Kolkata, Hyderabad, Pune, Bengaluru and Ahmedabad,
“Ecommerce activities will be permitted only for essential goods” outside containment areas in red zones, the Ministry of Home Affairs (MHA) said in revised guidelines issued on Friday evening. Untill now, ecommerce providers were allowed to deliver only essential items throughout India.
Typically, eretail companies churn maximum sales( more than 90%) such as smartphones, electronics, appliances and apparel, and have been severely affected by the countrywide shutdown,.
With ecommerce companies being allowed to deliver non-essential items provide an airpocket, the uptake of which will be a key indicator of consumer sentiment.
“Demand for work-from-home category spends will pick-up considering this new normal is here to stay. The demand generated by tier II and III cities will be key indicator of the consumer sentiment as many of the tier I cities continue to be under mixed zone. Supply chain will continue to be a challenge albeit with reduced pressures considering relaxation, with start-ups keeping a keen eye on maintaining balance between supply and demand,” said Ankur Pahwa, Partner and National Leader – E-Commerce and Consumer Internet, EY India.
In green and orange zones will be allowed between 7 am and 7 pm, as per the MHA guidelines for non-essential services. While companies welcomed the move, they said that with more than half of their sales coming from metros and large cities, which are mostly in the red zone, business will continue to be impacted.
Here is the list services which are allowed as per the zones.
Brick and mortar retail
Things are pretty much same for offline retailers as it were in the earlier phases of lockdown. Malls and shopping plazas and shops located in market areas are still prohibited. Only relaxation is for standalone shops selling essentials and non-essential items.
However, as India is classified into red, orange and green zones with certain relaxations, retailers and FMCG companies need to quickly figure out their manufacturing and supply strategies and prepare for the "Next" phase.
Speaking on same, Pinakiranjan Mishra, Partner and National Leader, Consumer Products and Retail, EY India, said, “ Companies should identify and fix the gaps during this crucial period, and be ready for the time when the restrictions will be fully lifted and business resumes as usual. Some key actions that retailers should take include, re-evaluating buy plans and communicating changes to suppliers, increasing collaboration with the ecosystem, considering asset repurposing and reinventing some stores as micro-fulfilment centres for online or click and collect centres.”
Going further he adds companies should also implement a comprehensive COVID checklist in their factories, offices and stores to ensure employee safety, establish trust in the organization especially with families of staff members and with local authorities. Regular health checks of staff , mandating use of sanitizers and masks, and ensuring a strict governance and regular & transparent communication will be key to a successful rebound for companies. The current relaxations will give an opportunity to open businesses in green and orange zones as applicable and also help slowly get the sales and supply chain systems in place,”
Green signal to Cab aggregators
Along with online deliveries, the government has also allowed cab aggregator services in orange and green zones as well besides allowing other forms of travel.
MHA order reads as “In the orange zones, taxis and cab aggregators will be permitted with one driver and one passenger only. Inter-district movement of individuals and vehicles will be allowed for permitted activities only. Four-wheeler vehicles will have maximum two passengers besides the driver and pillion riding will be allowed on two-wheelers.”