In some of the most sensitive Covid-19 outbreak areas – known as containment zones – the only method of purchasing essential supplies is through home deliveries, which reduces the risk of infections that can otherwise spread in settings like a crowded shop.
While shops and direct-to-consumer businesses are slowly reopening in the other parts of the world, as well as in India, the crisis is likely to accelerate a trend that has gained strength in recent years: E-commerce.
The changes in the retail sector can roughly be categorised into three phases – now, next, and beyond, according to the ‘Moving towards a resilient retail sector post Covid-19’ report by analysts at EY, who predict that old and rural consumers are likely to take to online purchases at a faster rate.
“We are currently in the ‘now’ phase where most retailers are coping with a complete pause in business,” said Pinakiranjan Mishra, one of the authors of the report. “In the medium term, or the ‘next’ phase, where the government starts easing restrictions, retailers will need to focus on bouncing back from the current situation. In the long-term ‘beyond’ phase, they need to focus on transforming to succeed in a new business landscape. The challenges would be to cater to consumers via their preferred channels and to build business resiliency to operate smoothly during future crises,” he added.
Co-author Farokh Balsara said the Covid-19 crisis could also be an opportunity. “The pandemic will reshape Indian retail, and the players ready to seize the opportunities of today would be leaders of the new retail industry that emerges post the crisis,” he said.
The report said the pandemic should serve as a reminder to retailers to quickly build a flexible and agile business-and-operations model to take care of future disruptions. “This will mean a significant focus on converting to a digital enterprise. Thus, it is the time for retail players to get control of the current crisis and invest in the build-out of a more resilient organization,” said Mishra.
The nature of business, too, will change because of compliance requirements to maintain social distancing and higher degree of hygiene.
Global e-commerce giants such as Flipkart said they already have a stringent system in place. “At the Flipkart Group, the safety of our supply chain and delivery executives and the customers with whom they interact is of utmost priority,” said a company spokesperson.
“For our supply chain and logistics network, we have organised more than 3,000 awareness sessions covering over 100,000 employees across all our facilities on how our employees and partners can minimise their exposure by following simple precautionary measures,” she said.
Permanent features of retail businesses in India will include, temperature screening, fumigation, antibacterial soaps and hand sanitizers. Even for home deliveries, customers will be encouraged to use digital modes of payment and fully contactless deliveries will be encouraged.
A government official working in an economic ministry said India’s policy focus would be more towards digital economy, whether it is online payment modes or online transactions. “The government is working with the industry to launch an indigenous e-commerce platform soon, which will link most of the 70 million ‘kirana’ stores with consumers,” this person said.
The Confederation of All India Traders (CAIT) on April 24 announced that it would launch a national e-commerce marketplace soon with support of the Department for Promotion of Industry and Internal Trade (DPIIT).
“Beside DPIIT and CAIT, the other promoters are Startup India, Invest India, All India Consumer Products Distributors Federation and Avana Capital,” the association of Indian retailers said in a statement. CAIT secretary general Praveen Khandelwal said, “The e-commerce marketplace will be of the traders, by the traders and for the traders and consumers of the country.”