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Grocery Delivery booms amidst the pandemic

Updated: May 13, 2021

Welcome to the alternate world where the things are looking up as usual! What? You didn’t think that’s possible? Well, TBH we thought so too! Until we bumped into the grocery micro-delivery industry figures:

The co-bosses of the segment, BigBasket and Grofers have witnessed a 3-5x rise in the number of orders while the average order value has also gone up by 25%.

The setback: Both E-Grocers are currently operating at only 60-70% capacity because of lack of availability of workers and insufficient supplies. Grofers is seeing as much as 12-13 lakh active users per day, despite having no delivery slots.

Desperate times call for desperate measures: To deal with the situation, the grocers have started delivering in cabs. They’re actively hiring gig workers and also roping in idle staff from restaurants. While BigBasket has partnered with NRAI and Retail Association of India to offer jobs to those laid off due to the lockdown, Grofers has begun giving on ground staff their share of essential goods at the end of the day apart from regular pay, providing them enhanced incentive to stay back.

To deal with the supply-blues, the players have reversed the conventional supply chain by sending their own fleet of trucks to distributor warehouses.

For a fast response to fix capacity constraints, Big Basket has acquired Milk-delivery firm DailyNinja at ₹48 crores. It has also raised as much as $50 million from the Chinese giant Alibaba, as an emergency funding.

In a perfectly timed interview of Grofers’ CEO Albinder Dhindsa with ET, he took us through their internal strategies to deal with the crisis:

  • In the first 2 weeks of March, their main task was to prevent hoarders from cornering supplies to sell on the black market (like setting a ceiling limit on how much one can buy at once);

  • Post that, managing systems, implementing rigorous safety measures (like stopping warehouses after every 3 hours for cleaning) and devising strategies to help scale up to meet surging demands became the key objective;

It seems that the CEO only came out to appeal ‘Avengers, Assemble!’ Because now we’re seeing a surge of e-commerce startups cropping up from all segments, quickly diversifying into the grocery cum essentials delivery segment:

  • Paytm, Meesho, Shopclues and Zomato have launched delivery of grocery/essentials.

  • Flipkart, Amazon, Swiggy had already entered the segment and are now pursuing it more actively than ever.

  • Real estate platform NoBroker has now partnered with ecommerce delivery platform BigBasket through which, NoBroker’s customers can now place their grocery orders on the NoBrokerHood co-living app who gets it delivered through BigBasket.

  • Grocery delivery startup Milkbasket has launched a grocery helpline number for senior citizens in Noida, Gurugram, Bengaluru and Hyderabad, providing deliveries of groceries and other daily essentials for those who don’t have a smartphone.

We acknowledge the good business being done by these startups, providing the much-needed extra hands to the e-grofers. We’re sure that deep inside, even Grofers and BigBasket are thankful that the avengers are here because saying no to customers can do much more harm than good. However, when the clouds finally clear out, the customers will definitely be left with more options. While some e-coms will recoil from the venture due to unfeasibility, others will foresee economic rents by exploiting their existing superpowers (value chains). And that’s when we believe they’ll be headed for an ‘infinity war’.


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