Flipkart shuts down and Amazon limits orders for 1.3 billion Indians under lockdown

Hong Kong(CNN Business) India's biggest online retailers have sharply reduced their service after the government ordered a three-week lockdown on residents across the country in response to the coronavirus pandemic.

Flipkart, which is owned by Walmart (WMT), announced Wednesday that it was suspending services after authorities called for a "complete" lockdown for the entire population of 1.3 billion people, directing most stores, offices and factories to shut down.

"We urge you to stay at home to be safe," Flipkart said in a statement. "Our promise is that we will be back to serve you as soon as possible."

People around the world have been relying more on online shopping in an effort to limit physical contact as the virus spreads. Amazon (AMZN) has revealed plans to hire 100,000 distribution workers in the United States, while Chinese firm JD.com (JD) has pledged to open up more than 20,000 new positions.

Amazon, Flipkart's main rival in India, on Tuesday moved to limit orders as it responded to increased demand because of the coronavirus outbreak.

It said in a blog post that it would "temporarily stop taking orders" for some items as workers focus on filling orders for "critical" goods, such as household staples, packaged food and hygiene products.

"To serve our customers' most urgent needs while also ensuring safety of our associates, we are prioritizing (with immediate effect) all our resources to serve products that are currently high priority," Amit Agarwal, head of Amazon India, said in a statement.

Customers who already placed orders for products that don't meet that criteria will be contacted and offered a refund, the company added.

The Indian government has stipulated that only services deemed "essential" to public life should stay up and running.

That includes the delivery of food, pharmaceuticals and medical equipment provided by e-commerce companies. But some businesses are hinting at confusion on the ground.

Flipkart, for instance, did not say why it shuttered operations when, as an e-commerce firm, it appeared to be exempt from the restrictions.

The company is reviewing "the possibilities of operating in the lockdown," chief corporate affairs officer Rajneesh Kumar told CNN Business.

"We are prioritizing the safety of our delivery executives and seeking the support of the local governments and police authorities to meet the needs of our customers," he said in a statement, without elaborating further.

Amazon told CNN Business it was "working with the central government and local authorities, asking them to help us urgently with detailed on-ground operating procedures."

Mixed messages

Zomato, a popular food delivery startup, said its delivery workers were "facing several hurdles across cities while trying to deliver food."

It pointed out that its work had been classified as an essential service, but said that "coordinating with multiple local authorities is ... challenging."

"The government has provided strong guidance which we are adhering by and trying our best to execute on the ground," a company spokesperson told CNN Business. "We are communicating with the relevant authorities and hoping these issues are sorted soon."

At least some confusion appears to stem from warehouse closures. The online supermarket Grofers said Tuesday on Twitter that its warehouse in the northern city of Faridabad had been closed by local law enforcement, and that it was facing "operational challenges due to a lack of clarity in our listing as an essential service provider."

K K Rao, commissioner of police in Faridabad, told CNN Business that while they are not stopping e-commerce services, they are briefing factory workers about social distancing requirements. He said that meant some factories were "temporarily shut by the police in order to brief employees."

— Esha Mitra contributed to this report.