The new directive comes days after offline retailers threatened nationwide agitation if their demand to restrict sales of non-essential goods via online platforms is not implemented by the government.
Trade associations had said that e-commerce platforms would be allowed to sell all products while offline stores selling non-essential products would be closed, creating an unlevel playing field. The state said in its latest guidelines that e-commerce businesses would be approved “only for the delivery of essential goods and services.”
The definition of essential goods includes groceries, groceries, personal care items, baby care products, pet products and some other categories of goods. Smartphones, electronics, major appliances and other high-value and fast-moving items for the e-commerce industry are not classified as essential goods.
“This decision defies logic,” said an executive of one of India’s largest e-commerce companies on condition of anonymity. “After over the past year proving to everyone how invaluable e-commerce is in enabling commerce while protecting consumers, it’s just disheartening to see.”
E-commerce companies were not allowed to ship all non-essential products to consumers during much of the nationwide lockdown last year. Even then, the move was seen as a balancing act by the government to reassure offline retailers who had said it would be unfair to them to let e-commerce work unhindered.
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“Everyone knows what is going to happen now. Delivery times for non-essential items will be delayed, but we have already increased our stocks for essential items in the state (Maharashtra) so hopefully we won’t get caught like last time,” said another executive at an e-commerce company.
Leading e-commerce players including Flipkart and Amazon experienced a massive disruption to their services last year after India banned online sales of non-essential goods. A majority of e-commerce sales by value are still driven by smartphones, electronics, fashion, major appliances, and related products.
Grocery and essential necessities are estimated to account for only 5-7% of the industry’s Gross Merchandise Value (GMV), meaning any restriction on the sale of non-essentials will result in a huge loss for these businesses. While the restrictions on selling products are unique to Maharashtra, the state is one of the largest e-commerce markets in the country.
“While storage and movement of goods have not been restricted, Maharashtra also has a large number of suppliers whose businesses will be affected and could have some downstream impacts in the rest of the country as well,” another person said. “But that restriction is only for 15 days, so we’re not too worried about that right now.”
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