Online retailers, sellers, takeout joints have started facing shortages of packaging material like boxes, tapes, labels, cartons among others—all critical for doorstep delivery of essentials.
The packaging supply chain for has come to a complete halt as India stopped imports from China—a major hub for plastics—and local manufacturers struggle with permissions to operate under a lockdown, various executives told ET.
That comes even as the new guidelines issued by the Ministry of Home Affairs exempted manufacturing units of packaging material during the shutdown.
“In the next five to six days, our restaurant partners will run out of packaging material which is essential for home delivery,” said Vivek Sunder, chief operating officer at Swiggy.
E-commerce firm Snapdeal also said it’s been unable to replenish the packaging material inventory for sellers. “Manufacturers of packaging material are not functional and they are also unable to move the stocks that they have,” said a Snapdeal spokesperson.
Other companies facing these shortages include Flipkart, Amazon, Zomato and their seller base.
The sentiment was mirrored by at least three online sellers and two takeaway joints that ET spoke to. Packaging constitutes about 7% of a brand’s overall costs on average and businesses need to figure out an affordable solution in a bid to keep prices of essentials low, an executive from an online-only hygiene brand said.
The problem, according to online businesses, stems from the fact that factories which manufacture these products are unable to operate in certain states.
“We have more than 430 active manufacturing partners, and more than 90% of them have not been able to operate the factories due to no permissions to operate or no passes for workers,” said Sachin Agarwal, chief operating officer and co-founder of Bizongo, which provides packaging for e-commerce, dairy, healthcare, food and fast moving consumer goods businesses.
“We are live in Delhi and Bangalore but with very limited operations,” he said, adding that the company is trying to start supply chain operations in Maharashtra, Tamil Nadu, Andra Pradesh, Rajasthan, and Gujrat but so far hasn’t been successful. The online marketplace for packaging needs is backed by Switzerland-based hedge fund Schroder Adveq, B Capital, Accel, Chiratae Ventures and IFC.
A Gujarat-based manufacturer which sells to most e-commerce brands said in some cases where permission to manufacture is granted, logistics is a hindrance.
