India faces a crisis unparalleled in its history. Triggered by the threat of COVID-19, a population of 1.3 billion is now in a mandated 21-day nationwide confinement. Such confinement – unprecedented at such scale in human history - may win us the health battle against the virus which is correctly our first priority, but will almost certainly cause tremendous collateral damage in terms of economic impact. Normalization is unlikely to be restored for a long time, as the extent of flattening of the COVID-19 curve remains an unknown while its importance is not in doubt.
With a 62% share, private consumption fuels India’s economy of $2.8 trillion and outstrips other levers like government spend, investment and exports. This private consumption is largely concentrated across 78 million urban households and about 250 million individuals who consume a slew of products and services. We consume food, non-food grocery at home; we eat out at restaurants; we pay school and tuition fees; we shop for clothes; we pay for fitness packages at gyms and beauty treatment at spas. This consumption fuels manufacturing, retailing and services which feeds not just itself but the remaining 1 billion people.
The trickle-down effect of this economic engine services and sustains the livelihood of shopkeepers, farmers, factory workers, drivers and maids, restaurant cooks, teachers, gig economy, self-employed across both organized and unorganized sectors. It feeds the nation’s lifeblood on jobs, tax collection and infrastructure creation besides raising standards of living.
Confine the people of 78 million households to indoors for the better part of a full month, and you could break the backbone of this economy triggering job losses, scarcity, decline in tax collections and social unrest.
Can the social unrest and economic loss of a 21-day confinement be contained and minimized? Yes, and the government has rightly identified ecommerce as one of the key levers to keep the economic lifeline going without compromising on the essential premise of social distancing to contain COVID-19. The others are to allow the manufacture and distribution of medicines and essential commodities, ensuring that the logistics network continues to function as do essential services like hospital and other medical services
In the days that follow, the government will face a formidable challenge that it is sensitive to and needs to solve for. While confining a billion people indoors, how do you let them continue consuming products that are necessary for their safety, sustenance and sustainment?
Ecommerce, whether it is home delivery by an Amazon or a Flipkart or a Big Basket; or a restaurant home delivery by a Swiggy or Zomato allows households to consume products they need while permitting social distancing.
The delivery associate drops packages at your doorstep, doesn’t need to step inside your house and most definitely doesn’t need to engage in proximate physical contact with the family.
The warehouse in which the products are stored and packed for delivery are run by large organizations that follow global hygiene standards and can be designed to operate eliminating human-to-human contact. Most importantly, their safety standards can be practically inspected as they comprise a manageable count.
Fortunately, this has been initiated. On Tuesday night, Prime Minister Modi issued a twitter post that carved out exemption for “delivery of all essential goods including food, pharmaceuticals, medical equipment through e-commerce". But glitches remain. Enforcement of the “curfew" is a state subject and at the primary level is dependent on the local constabulary.
State and district police need to permit free movement of the delivery associate – that ubiquitous and silent foot soldier of the e-commerce lifeline – against authenticated identity cards. We need to create an environment where delivery associates, warehouse associates and the truck driver need to physically show up for duty, unhindered and unharmed.
India needs to broad base the definition of essentials. In this time of unprecedented crisis - what are “essential products"? Isn’t a diaper an essential for the new mother? Isn’t a sanitary pad essential for the women? Isn’t an electric cooking plate an essential for a desperate mother who has run out of cooking gas, or a mobile charger or wifi modem or headset for a young self-employed professional who is now frantically trying to work from home?
Clarifying this definition becomes even more critical beyond the 21-day confinement, when continued COVID-19 vigilance may imply that social distancing in daily life may become a new normal for the long haul.
To simultaneously solve for safety and sustainment, authorities must deem ecommerce as “essential to enable the physical flow of goods and services" and not to an unevenly determined criteria of “essential products".
Ecommerce operators equally have the responsibility to step up to alleviate the suffering of communities they serve. Ecommerce marketplaces are best placed to keep a nationwide flow of health and hygiene products – masks, sanitizers, medicines – core essentials in the fight against COVID-19. More importantly, they are the government’s best allies to ensure both supply security and prevent price gouging. With the power of scale, marketplaces can step up financial support on working capital, fees and services they offer to the lakhs of small merchants and sellers who use these marketplaces to serve customers. Supporting them through this crisis will help them recover faster when containment eases. This economic lifeline will minimize job losses and sustain tax collection – precious metrics that could otherwise suffer as the nation combats the virus. Driving electronic payment options as substitute for cash makes commerce a more contact-less and hence safe interaction.
COVID-19 has pushed our country and community into a crisis we never dealt with in the past. The government has sent out the right signal by reaching out to ecommerce as an ally in this crisis in as much critical services like medicine, have been called out.
How we manage the next 21 days and more is a test of the nation’s mettle, and if we do this right, we can together forge the growth of a new channel for commerce that not only offers customers choice, convenience and affordability but also sustain and create jobs; aid tax collection; and also offer communities a safe channel for consumption. It is said that the character of a country and community is forged when it confronts its greatest crises; in our case it might well show the way for safe and responsible consumption.
The author is Vice President, Finance at Amazon India