The way consumers used to think about making purchases is totally changed in the period of COVID-19. Due to the coronavirus, consumers are less likely to visit a physical store to buy almost anything. Consumers are being forced to change their shopping behaviour. People are buying products online that they never have before. It could not have been possible if these e-commerce platforms were not available. One of these major platforms is Flipkart, which is grabbing a larger share of the e-commerce market. However, with the announcement of nationwide lockdown, everything came to a standstill at Flipkart. The company accepted the challenge and came out with practical solutions. This chapter analyses the strategies adopted by Flipkart and offers suggestions for other online/offline retailers to overcome this unfavourable time.
TopIntroduction
With the mounting popularity of online shopping in this tech world, most of us were already enjoying the comfort of shopping at home. But with rising concern regarding COVID-19 infection many more got accustomed to online shopping. The way consumers used to think about making purchases is totally changed now. Due to the coronavirus, consumers were less tending to visit a physical store to buy almost anything.
Consumers were being forced to change their shopping behaviour. The retail industry consultants assumed that people were buying products online that they never have before and this behaviour could stick. If consumers could get even more comfortable with online shopping, e-Commerce adoption rates could increase faster than previously projected.1
Social distancing compulsions, massive smartphone base and reliable broadband galvanised e-commerce uptake beyond metros, deep into smaller cities and towns, bringing an element of ‘trust in online commerce. As per a survey conducted by the Retailers Association of India (RAI), shopping malls witnessed 77% de-growth in the first half of June 2020, as compared to the same period last year. Lockdown relaxations did not prove to be of much help either. Meanwhile, the Indian e-commerce industry was estimated to grow 32.8% in 2020, higher than the pre-Covid projection of 29.7%. Physical stores, however, faced a blip as Indians opt to shop online in the wake of the Covid-19 pandemic. According to data analytics firm Global Data, offline retail sales in India are estimated to decline by 1.9% in 2020 over 2019, as against a pre-Covid estimate of 9.4% growth. Myntra CEO “Amar Nagaram” said the lockdown situation was unprecedented, and businesses too bore the brunt of the shutdown initially.
During this crisis time even the consumers needing only essential supplies like groceries are choosing to buy them online where possible. The pandemic brought about a “structural shift” in shopping behaviour with more and more customers and businesses relying on e-commerce. Players like Amazon and Flipkart as well as industry watchers noted that the need for social distancing and prioritising safety during the pandemic led to millions of people turning to e-commerce platforms this past year, not only in metros but also in tier III regions and beyond.
Amazon also saw similar trends as thousands of neighbourhoods Kirana stores and offline retailers also came onboard to leverage digital technology to reach customers' doorstep.
A Grofers spokesperson said that amongst all new users on its platform in the last one year, 64 per cent were first-time online grocery shoppers, while 20 per cent were totally new to e-commerce. Flipkart witnessed new user growth of close to 50 per cent soon after the lockdown, with tier III regions and beyond registering the highest growth of 65 per cent during the 'Unlock' (July - September) phase last year. According to e-tailers. Demand has spiked in categories such as groceries, home office essentials like laptops and headphones, furniture, consumer electronics products, health and fitness products, household products, personal grooming products, apparel, toys and books.
But the things were not so smooth for e-commerce companies as they seem to be. These ecommerce companies were facing their own acute problems during peak covid period. The opportunities, however, came fraught with new challenges. The nationwide lockdown brought transportation of goods and movement of personnel to a grinding halt. There were initial hiccups and e-commerce companies struggled to complete deliveries even as orders piled up.
Objective of the Paper
This paper attempts to analyse the problems faced by the leading e-commerce companies and the strategies they adopted to tackle those problems.
Problems Faced By E-Commerce Companies During Lockdown Situation
E-commerce companies in India were struggling to step up during the COVID-19 pandemic as the country's chaotic lockdown poses further challenges on their ability to operate, with market leaders Amazon.com Inc. and Walmart Inc.'s Flipkart India Private Ltd. expected to suffer significant losses in 2020. Amazon and Walmart have bet big on India, whose e-commerce market grew at a compound annual rate of 36% from 2017 to 2019, the fastest rate among all major world economies in the past three years, and is estimated to have reached $40 billion in 2019.