Surges in demand, disruptions in supply chains, customer behavior changes, store closures, and more, amid the coronavirus crisis, have undoubtedly impacted various businesses. As the pandemic lockdown confines us to our homes, only a few industries are expected to thrive or grow, and Indian online grocery retail is one of them. While the lockdown in India in response to the Covid-19 crisis first sent the online retailers into disarray, they were able to return quickly to turn things around and convert the situation into an immense opportunity.
According to the pre-Coronavirus estimates reported by Researchandmarkets, India’s online grocery market was expected to grow from its 2018 value of Rs 6,201 crore (approximately US$ 0.8 billion) to Rs 1,03,413 crore (about US$ 13.5 billion) by 2023. The number in Indian online grocery retail may, however, considering the current scenario, witness a significant spike from the pre-Covid forecast.
The nationwide lockdown and social distancing have prompted many Indian customers to embrace online grocery and food delivery platforms such as BigBasket, MilkBasket, and Grofers. These eCommerce platforms witnessed a spike in orders as consumers started ordering online to stock up on food and household items. For example, BigBasket recently revealed that its daily deliveries have now doubled to 3,00,000 from 1,50,000 before the pandemic.
However, most online retailers, like many other businesses, struggled to meet the massive demand. In the beginning, the shortage of workforce and local administration challenges disrupted their supply chain. These businesses quickly started re-designed their strategies and adopted innovative solutions to overcome challenges and drive their businesses. For example, online meat, chicken, and seafood seller, Licious, known for its express deliveries, opted for slotted deliveries rather than express deliveries due to logistics and workforce shortages. Later, the company tied up with third-party logistics companies to continue its order fulfillment.
Similarly, Bengaluru-based ID Fresh Food, manufacturers of dosa batters, parathas, and other fresh foods realized that the model they are using is inefficient for the lockdown since their customers were finding difficulty locating their products on stores. They quickly rolled out an app known as ‘Storefinder’ to help consumers with a list of 4 to 5 stores in their vicinity that stocked their products. Gurugram-based start-up Delhivery has been using advanced analytics and data science to chart optimal delivery routes and track containment zones so that its delivery staff could fulfill their orders in a timely and safe manner.
On the other hand, the rise in demand has encouraged players such as Snapdeal, Zomato, Uber, Dominos, Paytm Mall, Shopclues, and others to enter online grocery delivery platforms. The latest is Amazon that has started up in Bengaluru with helping restaurants and cloud kitchens. Even the third-party logistics companies sought permission from the authorities under the essential services category. Many, like Snowman Logistics, rose to the occasion to support these online platforms for the home delivery of food, medicine, and other essential items.
While these online food and grocery start-ups have learned to manage the new normal and brave the odds, better prospects may await these companies in the post lockdown era. The pandemic has brought a shift in consumer’s purchasing behavior, which will allow these companies to expand their businesses and increase customer base further. Or will Amazon take away a large part of their buzz?
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Naresh Khanna – 10 February 2025
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