India's e-commerce sector is emerging as a bright spot in an otherwise battered economy, with the sector promising to generate thousands of jobs as its mobile phone-savvy customers increasingly opt to shop online amid rising Covid-19 infections.
Technology as well as delivery and logistics companies are among those on a hiring spree as they prepare to handle the expected rush of online shoppers.
“We are fully geared up,” says Nakul Singh, the co-founder of ANS Commerce, a business solutions company, enabling firms to sell their merchandise online. “We've hired additional manpower and we're getting the training sessions done.”
The company has added more warehousing space in key cities such as Mumbai, New Delhi, and Bangalore, and has boosted its workforce by 30 per cent. Many of these roles are temporary gigs to handle the holiday rush amid the festive season, but ANS Commerce plans to retain some as it sees continued growth of the e-commerce sector.
Indian consumers, who traditionally rely on their brick-and-mortar neighbourhood stores and vendors for their daily and festive shopping, have flocked to online sites amid the pandemic. According to a survey by Capgemini in April this year, nearly 64 per cent of Indian consumers said they prefer to shop online over physical stores in the six-nine month period due to pandemic-related restrictions.
With confirmed infections now totalling more than 6.4 million in the country – making India the second-worst affected country behind the US – this trend could be here to stay.
Mr Singh explains that hiring right now is only logical, as companies are looking to capitalise on the consumer trend of online purchasing.
A significant part of “offline” purchases has already “moved online”, says Mr Singh. “Plus there's a pent-up demand among consumers.”
Offline retailers are also trying to catch up with their online competitors. Anticipating strong demand, these companies are also boosting their online presence and offerings for the festive period. Some are revamping their web stores, while others are selling over the internet for the first time. The festive season in India will get into full swing this month, and peak with Diwali in November – a time when people traditionally spend more money purchasing everything from sweets to televisions.
“The market has been going through a lot of negative sentiment because of Covid-19 over the last six months,” says Samarth Agrawal, co-founder and chief executive of MaxWholesale. “A lot of brands are strategising to use the festive season” to try to get their customers spending again, he adds.
All of this of course requires more manpower when it comes to storage and delivery of products being sold online.
A report by consultancy RedSeer estimates daily average e-commerce shipments will grow 1.8 times more than last year to reach 22 million during this festive season. It projects e-commerce and logistics firms in India will create some 300,000 jobs for the period, with permanent workers making up about one-fifth of the total number. These positions are mostly supply chain roles such as delivery staff, warehouse staff and in customer service.
Such jobs are much needed to revitalise India’s labour market, which was badly hit by the pandemic-induced nationwide lockdown that came into effect just hours after being announced by the government in March. Millions of labourers were left without work and India's gross domestic product contracted 23.9 per cent in the April to June quarter compared to the same period last year, according to official numbers.
Although lockdown restrictions have eased substantially over the past few months and more businesses are reopening, economic activity and consumer demand remain far below normal levels as the pandemic continues to spread rapidly across the country.
Overall, employment opportunities are still weak. Data from the Centre for Monitoring Indian Economy, a Mumbai-based independent think tank, shows that unemployment numbers stood at 28.4 million in September. But hiring in the e-commerce and logistics is providing some relief.
Amazon India last week announced that it had created more than 100,000 seasonal job opportunities ahead of the festive season across the country.
“We remain committed to creating job opportunities across the country, especially at a time when the pandemic has posed challenges in earning livelihood for many,” said Akhil Saxena, a regional vice president, customer fulfilment operations, Amazon India, in a statement released by the company.
Amazon is opening 10 new fulfilment centres and expanding seven of its existing centres in India to cope with the e-commerce boom in one of the fastest growing retail markets in the world.
Its rival, Walmart-owned Flipkart has said it is creating 70,000 jobs for the season.
Hiring seems to be underway across the board as well.
“The Covid-19 pandemic has made our services more relevant than ever,” says Saurabh Deep Singla, executive vice president and chief human resource officer at Ecom Express, a logistics solutions provider for the e-commerce industry, with headquarters in Gurgaon in north India. “We plan to hire over 30,000 people for seasonal roles and anticipate some of the hires to move into permanent roles after the festive season.”
Mr Singla, like so many other retailers in the country of 1.3 billion people is pinning hope on festive season demand, a sentiment echoed by Vipul Yadav, the co-founder of Mumbai-based iThink Logistics.
“We see a lot of demand in online purchases in India and we're seeing a peak season right now compared to all other years,” says Mr Yadav. “We're all preparing. The average ticket size is increasing and there are new categories that people are now purchasing online, such as health care and wellness [products].”
To further boost sales, e-commerce companies are looking to offer more aggressive deals and discounts for the period in an effort to entice customers.
However, the rising volumes of sales may create challenges for the logistics sector, facing efficiency issues due to restrictions imposed amid the pandemic, industry insiders say.
Operating conditions are also tough for logistics firms as the pandemic continues to cause disruptions in many parts of the country. For example, many residential and commercial buildings have made it difficult for delivery staff to enter the premises, as building managers take precautions to contain the coronavirus, says Pranshu Kacholia, vice president, business at ClickPost, a tech platform which allows e-commerce firms to select logistics partners.
“From the capacity side, the efficiency of logistics companies has gone down in recent times,” he says.
Mr Kacholia says “companies are trying to hire more people right now”, to address these issues.
Mr Singh at ANS Commerce says that he is hiring additional workers to meet any Covid-19-related contingency.
It is difficult to know which of the staff will come or not come to the warehouse because of transportation, personal or medical issues, he says.
To address this problem, Mr Singh is keeping 10 per cent additional staff in his warehouse on hand “as a buffer”. This of course only adds to the company's costs.
There are also restrictions imposed by local authorities on how long a company is allowed to work, which is subject to sudden changes, meaning firms have to keep adjusting shifts to complete their work, he adds.
These companies also have had to hire more security to ensure that requirements are followed, which include temperature checks and mandatory face masks. Such processes consume a lot of time and “results in a bit of inefficiency”, Mr Singh says.
As they continue to hire in anticipation of a boost, e-commerce and logistics businesses are banking on some festive cheer that could go some way to make up for an otherwise gloomy economic environment.
“The whole idea [this year] is to give as much leverage to clients [as possible so businesses could] cover up their losses and meet their targets during the festive time,” Mr Singh says.