The Indian e-commerce industry, which has seen massive disruptions due to the nationwide lockdown in the country following the Covid-19 outbreak, is gearing up to gradually resume business as usual after April 20. Moreover, they also expect a substantial fillip to business in the long-term as the current Covid-19 crisis has compelled a shift in consumer behaviour, with many now willing to try online shopping for the smallest of daily household items.

The new set of guidelines, which will govern the second phase of the lockdown till May 3, issued by the Union home ministry on Wednesday, says that e-commerce companies can function after April 20 and vehicles used by such companies will be allowed to ply with permission. The guidelines also allow for courier services to function. In his address to the nation on April 14, prime minister Narendra Modi had said that while the general lockdown will continue till May 3, some economic activities will be permitted after April 20 in districts and areas that aren’t hotspots for the virulent disease that infected thousands in the country.

While e-commerce companies have been partially operational till now, mostly focussing on the delivery of essential products to homebound citizens – including medicine, grocery, and food – online retailers are reading Wednesday’s guidelines as an indication that they will be allowed to deliver even those products now, which may not necessarily be categorised as essential.

“That is how we are interpreting the notification and gearing up for operations, along with our logistics partners, since we see pent-up demand even for non-essential items like stationary and small gadgets like headphones and chargers,” says Rudra Dalmia, executive director and chief financial officer of Paytm Mall. However, there continues to be some disruption in the intercity movement of goods and it remains to be seen as to when the supply of such products will stabilise, he added.

Wednesday’s guidelines have also allowed industrial activity to recommence in special economic zones (SEZs) and industrial parks with strict implementation of social distancing measures.

“Flipkart group is continuously working to ensure customers have access to products [on its platform]. In line with the guidelines announced by the government of India and also in collaboration with state governments and local authorities, we will continue to serve consumers to promote social distancing through our sanitised supply chain, contactless deliveries, and healthy and safe last-mile delivery process,” a spokesperson for Walmart-owned Flipkart said in a statement.

Dalmia says that Paytm Mall, Vijay Shekhar Sharma-led Paytm’s e-commerce arm that counts marquee names such as Alibaba, SoftBank, and eBay as investors, had around 100,000 pending orders when the country went into lockdown on March 25. Around 10%-20% of these orders, which could be for big-ticket items like smartphones and consumer durables may get cancelled, Dalmia says. But the constant inflow of demand for products like sanitisers and masks is making up for this.

“With so much of economic uncertainty around, I don’t see much discretionary spending on products like mobile phones. I expect us to do slightly higher volumes on apparels, especially essential apparels,” Dalmia says.

But the real shift in consumer behaviour will come about in the way even the smallest daily essential products are bought online. “India is a market of large volumes and there will be a change in consumer behaviour after the lockdown wherein even the older generation, which used to prefer going to kirana stores themselves, will start ordering products online, as they are more prone to viral infections,” says Dalmia. This has the potential of doubling e-commerce’s contribution to the total commerce in India from the present level of 3%-4% and that would be a significant boost for the e-commerce sector, he added.

The size of the Indian e-commerce industry is estimated to touch $107 billion by the end of 2020, with 120 million monthly e-commerce users.

Players like Paytm Mall are trying to ensure that they work with small and medium merchants during the period and ensure that they don’t lose out to larger e-commerce players that hold their own inventory-led e-retailers. Flipkart is also trying to do the same thing. It is collaborating with kirana stores to bring products to consumers’ doorsteps,” Flipkart’s spokesperson said.

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