Covid19 Tech Impact
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With the nationwide lockdown completing a month this week, consumers have become more and more accustomed to the challenges in food and grocery delivery. With access to most brick and mortar stores blocked, the focus largely has been on app-based deliveries of groceries and vegetables with the space seeing many new entrants and models. But what about the massive fish and meat delivery market?
According to the sample registration system (SRS) survey (2014) conducted by the registrar general of India, 71% of Indians over the age of 15 are non-vegetarian – a consumer segment that online fish and meat delivery startups have been trying to tap into over the last few years. Startups like FreshToHome, Licious and Zappfresh have been trying to get more consumers to order their fish and meat online instead of visiting the unorganised wet markets (which account for nearly 90% of Indian meat industry valued at around $30 billion).
While the situation looks like an opportunity for online ordering startups from a distance, these platforms also have to address challenges with manpower and infrastructure for smooth end-to-end service delivery.
Unlike groceries, the challenges for fish and meat are unique to the category. Fish and meat are highly perishable in nature. Meaning, to deliver them fresh, there is a limited time-frame between the source to the end consumer. This is coupled with the need for robust treatment facilities and a steady cold supply chain. Also, just as the Covid-19 pandemic came in around February, rumours connecting non-vegetarian food with coronavirus were spread on social media and messaging apps. To add to this, the confusion between what’s essential and what’s not is only just clearing up, impacting the smooth functioning of last-mile delivery services.
Meat Supply Chain Breaks Down
Speaking to Inc42, FreshToHome cofounder Shan Kadavil said that the first wave of challenges was ensuring last-mile delivery with personnel being frequently stopped by the police in the initial days of the lockdown., which just aggravated the problem. The startup claims to process close to a million orders a month at the moment (mainly in Bengaluru).
“The personnel required a lot of motivation and we ensured that by addressing the importance of their role in our communications. This was backed with safety and sanitisation measures, cashless and contactless delivery, regular temperature checks and following standard Covid-19 criteria,” Kadavil said.
Sourcing and supply of both marine fish and meat have been affected due to closed harbours and meat mandis (large organised markets). “The large harbours were closed leaving only smaller harbours in areas like Trivandrum and Alleppey. But our large stocks in contract farming ensured the supply of fish like rohu, catla, basa and tilapia,” Kadavil said.
The worst affected segment was the supply of mutton, buffalo meat, beef and pork as mandis and abattoirs were shut. Licious founder Abhay Hanjura said that the supply of chicken was also affected as farmers are not allowed to step out of villages by locals. This meant it had to devise new ways to collect the products.
Kadavil added that supplies to the large Delhi NCR market from other parts of India were impacted due to flights and cargo being blocked from March 24. India’s fishing industry is said to provide gainful employment to around 14 Mn individuals (2017-18), according to the National Fisheries Development Board. “We are trying to get their produce delivered as efficiently as possible,” he added.
Meat Supply Chain Breaks Down
Apart from interstate and intrastate shipping, last-mile delivery, labour and manpower challenges, for Zappfresh the lockdown also resulted in the shortage of packaging material and parts to repair machinery. The Gurugram-based startup also resorted to incentives, pick and drops for the on-ground staff, lodging and boarding for workers to remain operational. Some of its operations remain closed due to red zones. It has also been ensuring early payments to partners.
To keep its factories and treatment facilities running, FreshToHome had to provide on-site accommodation for the workforce to maintain social distancing and to avoid people from venturing out. This included new, non-operational buildings on factory premises. While it involved additional expenses, ensured quarantining of the workforce on the ground. FreshToHome has also adjusted the frequency of shifts to add more shifts with fewer people.
To deal with the exodus of its workforce, many of whom chose to return to their villages and towns outside cities, Licious housed employees in hotels in the vicinity of its three processing centres, taking care of food, transportation and lodging requirements. “This instilled a sense of security among the people and many of them who were on the verge of leaving returned. Apart from regular monitoring, we have also ensured one onsite doctor in each location for active health checks,” Hanjura said.
Licious disallowed express deliveries and moved to scheduled and slotted deliveries so that delivery personnel were able to deliver more orders without being overburdened.
Startups also told us that the rumours connecting Covid-19 to the poultry and meat industry caused an immediate dip in demand and prices forcing farmers to cull poultry stock causing immense losses to farmers. The fact that avian flu and swine flu cases also emerged in Uttar Pradesh and Karnataka did not help matters.
Keeping Up With The Surge
While demand and the number of orders have more than doubled, startups have only been able to cater to a fraction of these orders. “We have only been able to cater to 1.5X of our regular demand and deliveries were ensured wherever reasonably possible,” Kadavil said.
Licious said it could only meet 10% of the demand in the initial days, but is able to accommodate 60% of the orders now after weeks of streamlining. It reduced its product catalogue from around 150 SKUs to around 30 essential items to focus better on faster service. Recently, it launched a brand campaign highlighting the ‘cook at home’ trend and its own ‘contactless delivery’ proposition.
Similarly, Zappfresh is witnessing an increase in the average order size along with improvements in the uptake of new categories like ready-to-cook and ready-to-eat products.
“Adoption has become easier. We are constantly working on increasing bandwidth to meet the demand in every area. Our loyal customers are all the more confident and trusting us more due to servicing in tough times. We see this resulting in better customer retention and acquisition,” said Deepanshu Manchanda, cofounder Zappfresh.
FreshToHome suspended all marketing activities and is redirecting resources to ensure the safety of the workforce. The startup also has its operations in Dubai in the UAE. Kadavil said that although the lockdown in the city-state is not as severe as in India, there have been significant jumps in orders and new users.
Tech Infrastructure Stressed
A sudden and unprecedented spike in traffic and customer interactions also leads to significant stress on the tech infrastructure leading to breakdowns and further delays. “Our system was choked with a 700% jump in traffic on our website, so we had to halt our operations to refine and scale the technologies. We were able to stabilise it over the last few weeks. Work is going on to smoothen the tech infrastructure,” Manchanda said.
There wasn’t much of a resource impact on FreshToHome as Kadavil said the company’s tech team has also been growing with more infrastructure such as servers and higher redundancy in data centres.
Licious engineers are working double time, the founder said, adding that this is something the team was ready for. “Just as the crisis was setting in we had crystal-gazed and felt that we could be in for a big opportunity. It has held us in good stead,” Hanjura said.