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India business most affected due to Covid-19 outbreak, says Amazon

Amazon on Friday said the biggest impact it faced due to the Covid-19 pandemic was in India.

During the company’s earnings call on Friday, Brian T Olsavsky, senior vice-president and chief financial officer of Amazon, said the e-commerce firm was only delivering essential goods, such as groceries, cutting back a lot of its offerings in the country. “We will expand when the Indian government announces that we are allowed to resume operations,” he said.

Like in its home market in the US, Amazon in India is pitted against Walmart, which acquired Flipkart in 2018 in a $16-billion deal. It is also starting to see the heat from Mukesh Ambani-led Reliance’s e-commerce venture JioMart. Last month, Facebook announced an investment of $5.7 billion in Reliance Jio Platforms for a 9.99 per cent stake.

“The current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we have ever faced,” said Jeff Bezos, Amazon founder and CEO.

“The service we provide has never been more critical.”

According to industry insiders and analysts, the market opportunities for online commerce in the country are expected to touch $200 billion by 2028 from $30 billion in 2018. However, during the lockdown phase, e-commerce companies are allowed to sell only essential goods like groceries, medical supplies, and baby food.

As the government has extended the lockdown for two more weeks, according to a new survey by community platform LocalCircles, around 78 per cent of consumers want the government to permit e-commerce platforms to deliver all goods beyond essentials. Post the lockdown relaxation, consumers say, they will prefer buying items of need via local stores (in store or delivery) and e-commerce sites. Only 4 per cent said they would go to shopping malls to buy those.

The survey shows the people are in desperate need of products other than groceries as they have started working from home and children in many families are learning online. According to the poll conducted in mid-April, 68 per cent parents said their children need textbooks in addition to online school classes to become more effective, while 24 per cent said they did not have a screen (desktop, laptop, tablet) for children to access online classes. About 43 per cent households have said they needed office and school supplies while 33 per cent said they need a gadget urgently.

“None of these demands could be met as e-commerce was only delivering essentials,” said LocalCircles.

Earlier this week, Amazon India Head Amit Agarwal urged the government to allow the company to deliver all products (not just essentials) that citizens need over a prolonged period, so that they can stay safe. “E-commerce offers the safest way to ensure social distancing, saving lives and livelihoods,” he had tweeted.

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