Covid-19 Lockdown in India – A Double Edge Sword For E-Commerce

Can this Covid-19 lockdown be to e-commerce companies what demonetization was to e-wallets? Let's have a look.


The Covid-19 outbreak has brought the world to a standstill and India is no different. With a 21 day lockdown in the country, people have been asked to stay inside their homes without an exception. The government promises that the need for essential items will be fulfilled and people need not indulge in panic buying. Amongst the various measures being taken by the government, one of them is that the government, probably for the first time, is enabling the e-commerce deliveries of essential goods in order to cater to the massive demand arising in these tough times.

Can this Covid-19 lockdown be to e-commerce companies what demonetization was to e-wallets? Let’s have a look.

New User Acquisition Programs

Tech giants like Google and Amazon have been running focussed programs to get the next billion users online. Google wants the next billion online whereas Amazon wants the next million to shop on their portal. The intent in both programs is the same – getting new users online. In the long run, the e-commerce companies would ideally want – new customer sign-ups to lead to first time purchase to repeat purchase and finally build advocacy for the brand.

Government Vocal About the Delivery of Essentials Goods via E-Commerce

With the lockdown in force and the supply of essential goods hampered (at least temporarily), there lies a huge opportunity for e-commerce firms to get their next million. The Indian government is also quite vocal about the e-commerce companies delivering essentials and has made special provisions to felicitate the same. Though there are varied opinions on how smooth the operations are for now let us assume all will be in place in a day or two.

Make Or Break Opportunity for E-Commerce Companies

This lockdown will lead to more and more people wishing to get essentials goods delivered at their homes. Consequently, there would be new users downloading apps and signing up. So a new user sign up stage should not be a problem.
Next comes the problem of bogus orders or Oh-I-was-just-trying-the-app cases. In all probability, during tough times such cases will be lesser compared to regular business days. Considering the person downloaded the app, signed up and is now trying to order is a testimony that he/she is interested to place an order in these turbulent times. Still few companies say Amazon, have enabled only prepaid order deliveries to be on a safer side.

First Impression is the Last Impression

Finally, it will boil to the fulfillment of the order. The orders placed by new users in this period will be their first order ever on the platform. It is like the first impression is the last impression game. If the order gets fulfilled in the promised time, it will be a delight for the new users and they might just not only do a repeat purchase but also become an advocate in on time. Word of mouth will travel faster than Covid-19.
On the other hand, there is N number of factors which might lead to non-fulfillment of orders – from local police interventions, to supply chain disruption from the FMCG companies, own manpower crunch OR their own logistic break down in some cities. In such cases, e-commerce might just end up losing a new customer forever. The perception could turn out to be that the e-commerce guys just don’t care about their orders and there is no guarantee whether it will be delivered or not.

Though no e-commerce company would want to disappoint their customers, especially first-time customers, there could be little they can do for circumstances out of their control.

A Double-Edged Sword

The lockdown is now a double-edged sword for these firms, on one hand, there is a pool of new customers waiting to jump on the bandwagon and on the other hand there is less control over the customer experience during these turbulent times. They can either make a lasting impression or lose the customer completely.
Ideally, the firms would keep promises conservative and try and over-deliver to bring customer delight.

Let us wait and watch who does it better, helps mankind at large and at the same time takes away a major pie of new customers trying to get acquainted with e-commerce.


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