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Amazon (AMZN) Temporarily Halts Non-Essential Sales in India

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With the rampant spread of coronavirus pandemic across the globe and announcement of lockdowns in many countries, people are compelled to stay at homes. This in turn is creating problems as the company is unable to procure items that are required by consumers on a daily basis.

Recently, the Prime Minister of India, Narendra Modi has also announced a lockdown in the country for at least three weeks due to the coronavirus. This has led to further increase in Internet and online services usage.

Keeping in mind the need for basic essential items, Amazon’s (AMZN - Free Report) India unit will halt orders for non-essential products, after having implemented the same move in Italy and France.

The company stated that it will focus on the sale and delivery of essential daily items like household staples, packaged foods, healthcare, hygiene and personal safety products.

These initiatives should allow Amazon to focus on the critical needs of the people.The rapid delivery of these items is expected to help people counter the difficult times.

Amazon.com, Inc. Price and Consensus

 

Amazon’s Current Retail Picture

Per Bloomberg, Amazon is witnessing a flurry of orders on account of customers’ unwillingness to visit offline stores on fears of contracting the deadly virus. Although the company’s delivery capacity remains constant, overflowing orders have been slowing down delivery.

Nevertheless, the company has been making great efforts on the retail front to combat this contagious virus. It stated that Whole Foods stores will dedicate an entire hour to serve only senior citizens in an attempt to keep them safe from crowd, as they are more susceptible to COVID-19 infection.

In addition, the company has recently taken an initiative to bolster the Same-Day Delivery program by making it available in the cities of Philadelphia, Phoenix, Orlando and Dallas for Prime members.

Further, the company has built mini-fulfillment centers that are first-of-their-kind buildings. Notably, the new facilities are located closer to customers, in turn helping Amazon to reduce the number of hours taken to deliver orders via same-day delivery services.

Additionally, Whole Foods stores are closing two hours early in order to sanitize the stores and restock the shelves. Further, the company will continue to deliver Prime orders from these stores during these two hours.

Also, its delivery drivers have been asked to sanitize the delivery vans every day before going out for delivery.

The company’s one-day shipping and many other fast delivery services remain noteworthy, and are likely to instill investor confidence.

Bottom Line

The rampant spread of the coronavirus pandemic across the globe is taking a toll on everyone. So far, the pandemic has infected at least 170,000 people and claimed more than 6,500 lives worldwide.

In order to reduce the spread of the virus, countries like Italy, France, India, among others, have enforced lockdown. This lockdown has created a panic among people and led to a rapid increase in online orders.

Though timely delivery is vital, the health of the employees who take up these deliveries is equally important. Therefore, companies like Amazon and Walmart’s Flipkart are currently focusing only on the delivery of essential items.

Zacks Rank & Other Stocks to Consider

Amazon currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Stamps.com Inc. , eBay Inc. (EBAY - Free Report) and Atlassian Corp. (TEAM - Free Report) . While Stamps.com and eBay sport a Zacks Rank #1 (Strong Buy), Atlassian carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Stamps.com, Atlassian Corp. and eBay is currently projected at 15%, 22.3% and 11.3%, respectively.

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