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E-commerce takes a hit as people pick only essentials

09 Jan 2022

By Marianne David E-commerce cart values are recording a steady drop as people largely focus on buying only essential items, in the backdrop of belt tightening as economic woes worsen and given the unavailability of goods due to import restrictions. “Cart values have dropped from an average of $ 50-60 to around $ 39 now, with people choosing to buy only the essentials,” WishQue CEO Chinthaka Jayasekara told The Sunday Morning Business. While e-commerce saw a business boom with the onset of the pandemic, with companies rushing to set up online given the lack of access to brick and mortar stores in the face of extended lockdowns, Jayasekara said the sector was now seeing a sudden fluctuation. “Post-pandemic, there is a sudden fluctuation, as economic instability and inflation factors come into play,” he noted. The country’s foreign reserves position and complications relating to the issuance of foreign currency are further impacting the situation, with Jayasekara pointing out that the Government needed to recognise e-commerce businesses like WishQue as those that bring in foreign revenue. “There is a lot that the Government can do. At WishQue, for example, 60% of total revenue is in dollars. Even though we are bringing dollars, banks don’t issue dollars to us because they don’t have dollars. There’s $ 100,000-200,000 coming in every couple of weeks, but they don’t give us dollars and we have to be on a waiting list,” he revealed. Increasing restrictions being placed on businesses further limit foreign reserves, he said, asserting that the Government had to identify which companies bring dollars into the country. “It doesn’t need to be only exports. They think you need to export to get dollars.” While WishQue’s primary focus is on luxury goods and celebratory items such as flowers and cakes, it expanded operations to include groceries during the pandemic as it had the capacity to cater to the demand. “We diversified during the pandemic because we have the capability and systems and we were able to handle more orders from the first wave onwards. We diversified to cater more to groceries, grocery hampers, etc., which picked up fast,” said Jayasekara. With the company sourcing from wholesalers, maintaining steady stocks, and selling only at Maximum Retail Prices (MRPs) despite MRP fluctuation-related complications, people are now turning to WishQue for daily essentials that are often not available in the market. “People pay upfront and we deliver the same day or the next day. If we wait to get orders and then source items, prices go up overnight and we make losses. Due to our ability to stock items, for example if rice is unavailable in the market, there is a high chance that we have stocks,” he noted, adding however that groceries was not WishQue’s main business. “We are offering this as a service, given the current situation. MRP fluctuations and selling at MRP, finding grocery items and so on is really not worth the effort.” Over 60% of WishQue’s clients are based overseas and as a result the company has not been too heavily impacted by the drop in cart values. “WishQue has resonated with upper middle class society and we offer more branded items, so we see a lot of people ordering from overseas. But people are dropping items – if they used to buy a birthday cake, flowers and décor, now they mainly go with the essential only, which is the cake.” Flower sales have been among the fastest to wither given the massive rise in prices. “Flower prices have gone up 300% due to fertiliser issues and weather patterns. For example, we normally buy roses at Rs. 60 from a farm, but now you can’t buy them even for Rs. 250, so we have to import. Bulk buying is also at Rs. 180 or so,” stated Jayasekara. The unavailability of certain items due to import restrictions has also heavily impacted the company’s bakery operation, given its commitment to using only premium ingredients. “In our bakery, we only use premium ingredients. Our profit margin has dropped because we have to source items directly from overseas. Although ingredients are not available, we are not willing to compromise on quality. We don’t use margarine, we use butter, but butter sourcing has been a struggle; now we have found a supplier of more expensive butter from overseas. “Almond flour was available in Sri Lanka earlier, but now it is nowhere to be seen. Everyone was using it for macarons previously, but now only we do it after directly importing the flour from Australia. This is far more expensive than buying from a wholesaler.” Despite these operational constraints, Jayasekara is committed to maintaining the standards of the WishQue operation: “We try to provide the kind of service that is available in developed countries. When we launched WishQue, the focus was on creating a brand that people loved, over making profits. Customer care to delivery – everything is done to that standard.”  


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