Coronavirus plagues e-commerce sector with supply chain disruptions

Amazon, Big Basket, Grofers and Flipkart have reduced home deliveries. The rush for essential items in supermarkets has reached a new high. As consumers panic over stalled deliveries and order delays, companies are scrambling to make sense of the coronavirus supply chain disruption.

On the fulfillment and logistics side, e-commerce players last week announced delivery delays caused by spikes in online orders linked to coronavirus concerns, as surge capacity was strained. The 21-day shutdown, however, derailed things.

As of March 23, e-commerce majors reported a record 230% increase in return to origin (RTO), according to data from logistics intelligence platform Clickpost.

RTO means the non-delivery of a package and its return to the seller’s address.

Noting that logistics is the lifeline of the country, employing 40 million people and contributing $200 billion to the economy (before the Covid-19 pandemic), the report by Clickpost and Shadowfax states that order fulfillment has become an industry-wide challenge.

The data showed that blocked shipments (related to orders for which no analysis is carried out in a warehouse for more than 2-3 days) was 9%, while order delays (orders that passed the expected delivery) jumped 21% between March 10-20, compared to the historical average of last month.

Delivery percentages showed a sharp decline of 9% over the same period.

What China did

In China, in the aftermath of the coronavirus outbreak, e-commerce is said to have been driving the Asian country’s at-home economy. While Alibaba and Tencent-backed saw huge online sales of groceries, fresh produce and other essentials during quarantine, it boosted online retail sales of goods physical assets by 3% to more than 1 trillion yuan in the first two months. of 2020.

Given its strong logistics network, China’s online grocery market is now expected to grow 62.9% in 2020, compared to 29.2% growth in 2019, according to a March 17 report from iiMedia Research.

Although a recent study in India pegged an annual growth of 10.5% for the logistics market, which is expected to reach $215 billion by the end of 2020, the coronavirus seems to have damaged some of these screenings.

course correction

Experts say the logistics sector will have to undergo a course correction, even as e-commerce companies expect the consequences of the Covid-19 outbreak to negatively impact operations.

Stepping up efforts earlier in the month, logistics aggregator LetsTransport worked on an “all-city business continuity plan”, realizing the importance of maintaining uninterrupted supply chains during this crucial time.

Organizing mock drills and simulations in 15 cities, including rotational shifts for field personnel, as part of emergency measures to contain the impact of the pandemic, the aggregator worked with its network of driver-partners to ensure that operations are least impacted.

Many e-commerce players are also using the “blocked period” to work with partner brands to forecast demand and effectively plan the supply chain to minimize exposure to stock-outs on their portals as they go. as demand picks up.

And taking it back will. Digital platform Payoneer, which is streamlining commerce, expects consumer demand to return in the long term and supply chains to stabilize, despite first-quarter sales volume estimates plummeting between 20 and 50%.

Payoneer suggested e-commerce companies rely on service providers across the ecosystem to try to minimize losses at this time and asked companies to take the time to ensure redundancy and crisis planning at each stage of their value chain.

Noting that most marketplaces recommended best practices for e-commerce businesses, such as selecting longer shipping time options and increasing the frequency of communication with buyers, the agency said some marketplaces have also adopted policies to protect sellers from logistical delays, while a select few have waived penalties for refunds, which are also on the rise.