Online businesses in a tizzy over Maharashtra’s ban on single-use plastics appear to have won a reprieve after the state government agreed to a plea from ecommerce companies including Amazon for more time to comply with the new rule.
The ban, effective from June 24, is expected to significantly hurt online retailers, delivery firms, and logistics platforms in terms of costs and delivery timelines, with Mumbai and Pune accounting for 25-30% of ecommerce orders nationally.
Ecommerce firms including Amazon wrote to the Internet and Mobile Association of India this month seeking its help to appeal to the state government for an extension to be able to change their packaging to recyclable material. The state government is likely to grant an extension of up to 3 months to comply with the ban, according to IAMAI president Subho Ray.
Industry insiders involved in the talks also said the government is likely to grant ecommerce and retail firms time till August for the implementation of the new notification while maintaining that no coercive methods will be adopted while enforcing the ban.
The extension to ecommerce companies matches that given to retail packaging firms by the state government for submitting their recycling plans.
Online businesses such as Flipkart, Amazon and Paytm Mall are now required to upgrade their packaging material in Maharashtra to corrugated (cardboard) boxes, which are about 30% more expensive than plastic packaging material, according to industry estimates. Packaging costs presently account for 1-3% of the value of an online order, on an average.
“The plastic ban is going to impact the ecommerce industry more than anything else,” said Abhishek Bansal, CEO of logistics firm Shadowfax that undertakes deliveries for Paytm Mall and Amazon. “Even for us, there are strict mandates on the kind of packaging that can be used.”
Amazon, Flipkart, Paytm Mall, Snapdeal and ShopClues did not immediately respond to emailed queries. The ban on single-use plastic bags and cutlery has already hit business for food-delivery platforms in the state. The ban on single-use plastic bags and cutlery has already hit business for food-delivery platforms in the state.
Food aggregators Zomato and Swiggy seem to have witnessed a dip in order volumes on day one of the ban with restaurants suspending delivery of items such as gravies that need water-proof packing.
Swiggy and Zomato said they are helping their restaurant partners get access to alternative packing inventory on priority, with Swiggy sourcing such material from Mumbai and Bengaluru. Karnataka imposed a blanket ban on manufacturing, storing, distributing and using single-use plastics in 2016, although its implementation isn’t entirely effective.
Aspokesperson for Zomato said “it was too soon to size the impact (of Maharashtra’s ban on plastics on order volumes).” “While we support the government’s ban on plastic, alternative packaging for delivery will increase restaurants’ costs by 20% at least,” said Santosh Shetty, president of Ahar Mumbai, which represents more than 8,000 restaurants and bars in the city. “This will have an impact on prices for consumers and will also further hurt restaurants, which are already reeling under the effect of GST.”
The new rule also affects ecommerce orders placed in Maharashtra for which products have to be sourced from other states where such a ban in not in place, said industry sources. Also, given that ecommerce companies typically stock 30-45 days worth of inventory, most of them are rerouting their existing packaging material in Maharashtra to other states.
Packaging firms Bizongo has started adding disclaimers on its material for ecommerce firms operating in the state, mentioning the specifications of the plastic used.
While Maharashtra’s new rule has hit general trade, offline stores and street vendors the most, internet firms lament the lack of clarity over the kind of plastic that is banned and recycling options. “There has to be more clarity and the ban should give everyone the means to recycle, and firms will follow that,” said Sandeep Padoshi, founder of logistics firm Wow Express, which handles deliveries for ecommerce firms such as beauty products retailer Nykaa. “If we fail to follow that recycle plan, then penalise us, not now.”
The ban, effective from June 24, is expected to significantly hurt online retailers, delivery firms, and logistics platforms in terms of costs and delivery timelines, with Mumbai and Pune accounting for 25-30% of ecommerce orders nationally.
Ecommerce firms including Amazon wrote to the Internet and Mobile Association of India this month seeking its help to appeal to the state government for an extension to be able to change their packaging to recyclable material. The state government is likely to grant an extension of up to 3 months to comply with the ban, according to IAMAI president Subho Ray.
Industry insiders involved in the talks also said the government is likely to grant ecommerce and retail firms time till August for the implementation of the new notification while maintaining that no coercive methods will be adopted while enforcing the ban.
The extension to ecommerce companies matches that given to retail packaging firms by the state government for submitting their recycling plans.
Online businesses such as Flipkart, Amazon and Paytm Mall are now required to upgrade their packaging material in Maharashtra to corrugated (cardboard) boxes, which are about 30% more expensive than plastic packaging material, according to industry estimates. Packaging costs presently account for 1-3% of the value of an online order, on an average.
“The plastic ban is going to impact the ecommerce industry more than anything else,” said Abhishek Bansal, CEO of logistics firm Shadowfax that undertakes deliveries for Paytm Mall and Amazon. “Even for us, there are strict mandates on the kind of packaging that can be used.”
Amazon, Flipkart, Paytm Mall, Snapdeal and ShopClues did not immediately respond to emailed queries. The ban on single-use plastic bags and cutlery has already hit business for food-delivery platforms in the state. The ban on single-use plastic bags and cutlery has already hit business for food-delivery platforms in the state.
Food aggregators Zomato and Swiggy seem to have witnessed a dip in order volumes on day one of the ban with restaurants suspending delivery of items such as gravies that need water-proof packing.
Swiggy and Zomato said they are helping their restaurant partners get access to alternative packing inventory on priority, with Swiggy sourcing such material from Mumbai and Bengaluru. Karnataka imposed a blanket ban on manufacturing, storing, distributing and using single-use plastics in 2016, although its implementation isn’t entirely effective.
Aspokesperson for Zomato said “it was too soon to size the impact (of Maharashtra’s ban on plastics on order volumes).” “While we support the government’s ban on plastic, alternative packaging for delivery will increase restaurants’ costs by 20% at least,” said Santosh Shetty, president of Ahar Mumbai, which represents more than 8,000 restaurants and bars in the city. “This will have an impact on prices for consumers and will also further hurt restaurants, which are already reeling under the effect of GST.”
The new rule also affects ecommerce orders placed in Maharashtra for which products have to be sourced from other states where such a ban in not in place, said industry sources. Also, given that ecommerce companies typically stock 30-45 days worth of inventory, most of them are rerouting their existing packaging material in Maharashtra to other states.
Packaging firms Bizongo has started adding disclaimers on its material for ecommerce firms operating in the state, mentioning the specifications of the plastic used.
While Maharashtra’s new rule has hit general trade, offline stores and street vendors the most, internet firms lament the lack of clarity over the kind of plastic that is banned and recycling options. “There has to be more clarity and the ban should give everyone the means to recycle, and firms will follow that,” said Sandeep Padoshi, founder of logistics firm Wow Express, which handles deliveries for ecommerce firms such as beauty products retailer Nykaa. “If we fail to follow that recycle plan, then penalise us, not now.”
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