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E-Grocers, Bigbasket And Pharma Industry Experience Downfall Amid Covid-19

By LawStreet News Network      24 March, 2020 11:03 AM      0 Comments
EGrocers Bigbasket Pharma Industry Covid19

E-commerce websites providing everyday groceries such as Grofers, Bigbasket and Pharmacies such as firm like 1mg complained of experiencing a tough time to fulfill the demands of the customers as many of the local authorities have implemented a complete lockdown in states including their warehouses and have also restricted the movement of trucks carrying supplies amid the nationwide curfew measures undertaken on March 22, 2020 to regulate the spread of COVID-19.

The complaints were made regarding the cancellation of lakhs of orders despite e-commerce of essential good, and food items being exempted from restriction orders by the government to stop panic buying and also ensure delivery of essential goods.

The exemption will be applicable for e-commerce operations, warehousing, logistics, wholesalers’ vendors and delivery partners, the Department of Consumer Affairs informed states on Saturday.

Grofers CEO Albinder Dhindsa, who took to Twitter to express the concern over the development, requested govt authorities to convey clear communication in this regard.

“Unfortunately, the message isn’t getting to local authorities. @Grofers facilities and partner stores being shut and trucks carrying essentials not allowed in”, he said.

Trucks bringing supplies to the warehouses were stopped in states like Uttar Pradesh, Maharashtra, Karnataka and Telangana.

Bigbasket, Milkbasket and 1mg also complained of facing similar problems such as delayed deliveries and an inability to accept any new orders in several locations.

“We are facing the same issues. Unfortunate that delivery of medicines are getting delayed since the police is not informed what is essential. Hoping the message of essential services is conveyed to the forces on the ground”,said Prashant Tandon, CEO of 1mg in a tweet.

“We are coordinating and communicating all instances of trouble these companies are facing with secretaries at the state level to take action and ensure there is minimal disruption,” said a senior govt official.

These stats come amid e-grocers witnessing a significant number of orders, over 80% in last week, due to panic buying resulting from the coronavirus outbreak, which has now been declared as a pandemic by the WHO.

Online grocery retailers have started to see a massive spike in business as people have started avoiding crowded places as a precautionary measure, For instance, BigBasket’s traffic and revenue doubled in less than two weeks. The average “basket values” on the platform are around 20% higher than regular days, and many new users are also flocking to the brand.

Rival Grofers has seen a nearly 80% growth in orders across Mumbai, Bengaluru, Pune, and Ahmedabad in recent weeks, and a 60% spike in Delhi National Capital Region (NCR) and Hyderabad. The number of orders on Grofers is 45% higher than regular days, while the average order value has increased by 18%, the company said.

“Data from China show that the (online shopping) numbers will stay elevated even after the crisis, as more people are exposed to the ease and fun of online shopping,” Anindya Ghose, professor of technology, operations, and statistics at New York University’s Stern school of business.

“But keeping up with rising demand is going to be a challenge, experts warn. As supply chains come under strain, their technology capabilities, with regards to booking and processing orders seamlessly, will be tested,” according to Yugal Joshi, vice-president at Texas-based consultancy Everest Group.

At brick-and-mortar stores, inventories have started getting empty. “If I had not got fresh supply today, I would have had to shut shop,” said a shopkeeper at grocery chain Honey Money Top in Gurugram on March 16, adding that customers were buying most items in bulk.

Restocking is becoming difficult and is costing more. “We’ve run out of wheat because our suppliers have increased prices given the high demand,” the owner of Basics, a farm-to-table grocer in Gurugram, said on March 16. “I’m personally going to my supplier in Madhya Pradesh to sort the situation. If nothing works, I will have to buy at the rate he is quoting and then increase prices for my customers. Demand is so high right now that I think my customers will buy at whatever rate I sell at.”

They have already run out of sanitisers and masks. Grofers has seen a surge in demand for floor cleaners and immunity-boosting products such as Chyawanprash and honey. Even essentials are running out.

BigBasket has run out of several basic necessities such as wheat, milk, spices and more.

“Although we faced some disruption in the last three days, we have taken corrective action and have geared up for supplies to meet the increased demand,” BigBasket said in a statement on March 17. “We are not facing shortages…In effect, supply will not be an issue.”

The companies have also started facing the problem of maintaining the standard and quality of the product over the coming weeks.

“Online shopping gives them (customers) options of social distancing and a way to make sure that they have all the essential goods they require in case of any upcoming lockdowns,” Satish Meena, senior forecast analyst at Forrester, told Quartz. But if items frequently show “out of stock,” they could “face an issue of bad customer experience and unreliability,” he added.

BigBasket is already feeling the pressure on delivery timelines. While it usually provides same or next-day delivery, the exceeding number of orders has caused delays of three to five days in some areas. “We will face some constraints for a few more days because it takes time to build capacity in terms of storage, delivery fleet, and people,” BigBasket said, adding, “we will be back on track very soon.”

Grofers, for whom delivery timelines are currently three days in Delhi and two days in most other cities, also said, “all essential supply chains are functioning normally.”

And while they ramp up supply capabilities and hire more personnel, they also need to focus on ensuring safety and hygiene.

Considering the virus can last on surfaces up to nine days, packaging and delivery standards needed to be rigid. Grofers has implemented stringent screening at its facilities to make sure all employees are healthy and are taking necessary precautions. “Our warehouses are disinfected and sanitised on a daily basis to keep the inventory virus-free,” co-founder and CEO Albinder Dhindsa stated.



Author – Devansh Dev

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