The fresh directive comes days after offline traders threatened a state-wide agitation if their demand of restricting sale of non-essential goods via online platforms was not introduced by the government.
Trader bodies had said that allowing e-commerce platforms to sell all products while shuttering offline stores selling non-essentials creates a non-level playing field. The state in its latest guidelines said that e-commerce firms would be allowed “only for the supply of essential goods and services”.
The definition of essential goods include food, groceries, personal care items, babycare products, petcare products and some other categories of goods. Smartphones, electronics, large appliances and other high-value and fast-moving items for the e-commerce industry are not categorised as essential goods.
“This decision beats all logic,” a senior executive at one of the largest e-commerce firms in India said on the condition of anonymity. “After proving to everyone last year how invaluable e-commerce is to enabling commerce while keeping consumers safe, it’s just disheartening to see this.”
E-commerce firms were restricted from shipping all non-essential products to consumers for a majority of the nationwide lockdown last year. Even then, the move was seen as a balancing act by the government to pacify offline traders who had said that allowing e-commerce to function unhindered would be unfair to them.
“Everyone knows what is going to happen now. Delivery timelines for non-essentials will get delayed, but we had already been ramping up our supplies for essential items in the state (Maharashtra) so hopefully we will not be caught out like last time,” said another executive at an e-commerce firm.
Leading e-commerce players, including Flipkart and Amazon, saw a massive disruption to their services last year after India disallowed online sale of non-essential goods. A majority of e-commerce sales by value is still driven by smartphones, electronics, fashion, large appliances and similar products.
Groceries and essentials are estimated to make up just 5-7% of the industry’s gross merchandise value (GMV), meaning any curbs on sale of non-essentials will lead to a huge loss for these companies. While the restrictions on sale of products is only in Maharashtra, the state is one of the largest markets for e-commerce in the country.
“While warehousing and movement of goods has not been restricted, Maharashtra also has a large number of suppliers whose businesses will be affected and could see some downstream effects in the rest of the country as well,” said another person. “But this restriction is only for 15 days, so we’re not too worried about it right now.”