As India Readies For Covid Summer, Ecommerce Startups Brace For Spike In Demand

As the Covid-19 pandemic scales new heights in India with over 3 lakh new cases in a day and over 2,000 deaths, India’s food delivery and grocery startups are ramping up their supply chain infrastructure to meet the spike in demand. Foodtech unicorn Zomato, on Wednesday, launched a ‘priority delivery for Covid emergencies’ feature on its mobile application. The feature will allow customers to choose the “This order is related to a Covid-19 emergency” option during checkout. 

“At Zomato, we will prioritise these orders by providing the fastest rider assignment, and dedicated customer support in case of queries. Thousands of restaurants have pledged to prioritise these orders in their kitchens above all others,” Zomato CEO Deepinder Goyal wrote on Twitter. 

Goyal added that orders marked with the ‘Covid-19 emergency’ option will be contactless by default to ensure the safety of riders and customers. “Needless to say, all customers should opt for contactless deliveries,” he urged. 

On April 20, Grofers CEO Albinder Dhindsa took to Twitter to reveal that there were more than 6 lakh shopping carts created on the company’s ecommerce platform, waiting to check out if PM Modi had announced a lockdown during his address to the nation that night. 

In a recent blog post, Grofers acknowledged that during the Covid-19 induced countrywide lockdown last year, the company had witnessed customers indulge in panic buying and hoarding of essentials as they had feared a shortage of supply in the near future. To address the same, this year, the company has introduced a backend ‘Surge’ algorithm. So, when the demand for a particular product increases within a particular geographic area, the backend algorithm is triggered to limit the quantity of that product that each user can purchase (within that geographic location) to prevent hoarding and to ensure more users are able to buy that product. “Our goal is to ensure we are able to fulfil everybody’s daily needs as seamlessly as possible,” read the blog post.

The blog post added that during last year’s lockdown, a significant number of Grofers’ delivery partners had migrated back to their hometowns, leading to a shortfall in manpower. In its blog post, the company claimed that the urban-to-rural migration hasn’t impacted its delivery system thus far. It also claimed that each delivery person carries with him, a valid Covid-19 test report to ensure their safety as well as those of the customers. 

Food delivery giants Swiggy and Zomato also haven’t talked about the urban-to-rural migration hampering their delivery work. This may be because this year, the lockdowns or curfew restrictions have been localised in certain worst-affected states such as Maharashtra, Uttar Pradesh and Delhi, rather than the sweeping countrywide lockdown last year. As with last year, ecommerce deliveries of essentials have been allowed to continue irrespective of curbs. 

Although, companies such as TeamLease and BetterPlace, which are engaged in blue-collar workforce hiring for their clients told Inc42 that their clients Swiggy and Zomato are on a hiring spree for delivery workers, even offering better incentives to cover the rising fuel costs. 

“We see that companies are incentivising gig workers through better wages by 10-15% and fuel incentives for additional distance travelled. For gig roles, some companies are providing workers with electronic bikes which eliminate the need for petrol, thereby increasing their disposable incomes,” said Manish Pansari, chief business officer at BetterPlace. 

Kaushik Banerjee, VP and business head at TeamLease also made similar observations. Both Swiggy and Zomato reportedly have 1-2 delivery workers each attached to their platform.

Meanwhile, ecommerce giant Flipkart has launched the ‘Flipkart Quick’ service, where it ensures 90-minute deliveries of key essentials such as Covid-related medicines, fresh fruits and groceries, among other items, in six Indian cities, namely Delhi, Gurgaon, Ghaziabad, Noida, Hyderabad and Pune. The company had first launched the service in Bengaluru last year. 

Costumers will be able to place their orders through the ‘Flipkart Quick’ section on their app at any time of the day. The deliveries will be made between 6 am and midnight. 

The online sale of grocery had witnessed a surge in demand last year, as physical distancing protocols triggered a shift in preferences. The trend is expected to continue this year as infections spike once again. 

According to a recent RedSeer report titled, “Online Grocery: What Brands Need To Know“, the online grocery market in India, which had recorded $1.9 Bn GMV (gross merchandise value) in 2019, was expected to grow to $3 Bn GMV by the end of 2020. The growth was attributed to several factors but primarily the Covid-19 tailwinds for the segment. Online grocery stores witnessed a rise in demand while countrywide lockdown restrictions were in place.

The report said that the change in consumer behaviour amid the pandemic, resulting in an increased preference for online grocery, is likely to stick. This would help online grocery stores increase their share in the overall food and grocery market from 0.3% last year to 2.3% by 2024, as the segment grows at a CAGR of 57%.