Coronavirus: How Bigbasket, Swiggy, and Zomato are working to find a balance on uneven footing
The nationwide lockdown to stem the spread of coronavirus has led to a spurt in on-demand,doorstep delivery of essential goods. However, the broken supply chain and logistics network mean it isn’t business as usual. But it’s essential to fix these problems as India readies for extended confinement.
In his third address to the nation on April 14, Prime Minister Narendra Modi announced that the country-wide lockdown to stem the spread of coronavirus would be extended till May 3.
PM Modi said the government would monitor the situation state-wise, and could provide some relaxation, depending on the number of cases. The prime minister added that the central and state governments were working to address supply chain issues.
He didn’t elaborate on steps that would be taken, but this is a step forward – especially for delivery startups such as Amazon, Bigbasket, Swiggy, Zomato, and Dunzo.
India went into lockdown from March 25, and although government guidelines had allowed movement of essential goods and services, things came to a standstill due to a complete breakdown of the supply chain.
Kirana stores, online grocers, and supermarkets are open, but supply needs to reach the outlets and warehouses before it can reach the end consumer.
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Working around the logistics impact
The supply chain encompasses production to consumption. It includes different facets: from farmers and mandis to mills and wholesalers, and, finally, retailers. The lockdown has led to chinks in sections of this chain. Mandis have been shut because they are crowded, and if wholesale markets are shut, products cannot reach the stores.
“When consumer demand goes up by 50 to 60 percent, business has to step up, but we still face challenges in the procurement of raw materials and transportation of products to some regions. Hence, we decided to scale down production and provide only key products to limited stores in certain markets,” says PC Musthafa, Co-founder and CEO, iD Fresh Foods.
The impact of the logistics sector has also affected the overall supply chain. It has made inter-city and inter-state transport a challenge.
Sujeet Kumar, Co-founder of B2B ecommerce unicorn Udaan, explained in a video interaction with Shradha Sharma, Founder and CEO, YourStory, that while several mill owners can own permits and passes, the issue was identifying which truck was actually used for the transport of essential goods.
“After goods are delivered, it is an empty vehicle, and authorities will be unable to verify if it was used for essential goods delivery or not,” Sujeet says.
According to a LocalCircles survey, 35 percent consumers said they were not getting essential goods from retail stores and ecommerce companies at the time of the lockdown.
Companies like Bigbasket and Grofers, which largely focus on the supply of daily essentials, witnessed delays in fulfilling customer orders. However, different state governments soon got into action, issuing passes to ensure the safe movement of goods and services.
Narendra Pasuparthy, Founder and CEO, Nandu’s Chicken, says, “While things on ground have certainly eased a bit, inter-city and inter-state transportation is still a concern. A lot of our employees returned to their hometowns on the day of the lockdown. Many are keen to return to work, but may not be able to till specific arrangements are made for their movement.”
He adds that availability of packaging material is also currently a challenge. “But despite all the on-ground limitations, we have continued to deliver fresh chicken to our customers via ecommerce and other online services.”
According to a report by Unicommerce, there has been a massive 70-80 percent increase in the number of online orders, with order size increasing substantially by 15-20 percent. FMCG and staples are some of the most popular products ordered online.
“We are constantly reinventing ourselves to adhere to the new regulations. We understand what various state governments are trying to do is in the best interest of the society at large,” says Thirukumaran Nagarajan, Co-founder and CEO, Ninjacart.
Ninjacart had to bring in a shift for delivery to various outlets. Before the lockdown, the entire supply was undertaken by four-wheeler vehicles, but the startup has started engaging two-wheelers with the current restrictions in place.
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Catering to a surge of demand with limitations
Like iD fresh, Nandu’s too is looking at limited SKUs since March 28.
“Being a part of the essential goods sector, we were very clear that our teams needed to adapt to on-ground situations and ensure uninterrupted deliveries from the moment the lockdown was announced. We have set up a virtual command centre to manage order taking along with ecommerce, call centre, and marketplace operations,” Narendra says.
He adds that they have a team of close to 100 people working across 20-odd stores, and the processing centre and factory to be able to serve customers.
“We are also working towards figuring out ingenious ways to keep up with the demand and open more stores so we can serve customers across a wider geographic spread in the city. Our chicken processing and factory operations are gearing up to cater to the demand,” Narendra says.
Ninjacart, on the other hand, has started to operate through the night to ensure morning deliveries. The startup, which primarily caters to B2B outlets, has also opened its doors to supply for apartment complexes.
Players like Dunzo, Swiggy, Bigbasket, and Grofers have made direct connections with FMCG brands and players to ensure faster push of supply. Many have partnered with ride-hailing and rental platforms like Ola, Uber, Rapido, Yulu, and Drivezy.
The increase in demand necessitates more people on ground, and these tie-ups have helped ensure a semblance of normalcy for delivery startups. Most ecommerce and offline players are primarily focused on delivery of essentials, for now.
“We collectively decided to scale down operations and provide only essential products like idly-dosa batter, chapati, parotta etc till the situation is back to normal. We came to this decision not because of a revenue impact, but because of our responsibility to our employees and customers during these trying times,” Musthafa says.
Zomato has ventured into the grocery delivery segment with Zomato Market, which is present in Kochi, Delhi, Punjab, Bengaluru, and Mumbai.
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Finding the products
The overall supply chain issues mean that consumers are facing challenges in locating and purchasing products. But startups are working to solve these problems.
“We rolled out a new feature on our website called the iD Store Finder. With this feature, you can easily identify open stores near you and know the exact quantity of fresh iD products supplied on that day. The ‘Notify Me’ feature sends daily SMS alerts when the stores get fresh stocks,” Musthafa says.
Products like CovidMaps, which was started by techies, help these platforms find products. The user-generated crowdsourced data aggregation platform lets users find or update information about local stores that sell essentials.
“We have to hunt for a store at most times. The problem is that orders are in, but not all products are available everywhere. This means the amount of time we spend on the streets finding a store is longer,” says a Dunzo delivery partner.
This further delays timelines, but CovidMaps helps platforms like Dunzo and Swiggy find and go to nearby stores to collect their orders.
Mobilising the staff
It just isn’t the broken supply chain that is causing the problem; the issue of delivery executives is also affecting work on the ground. In the initial days of the lockdown, delivery executives, factory, and warehouse workers were stopped from going to work; many were even beaten up by the police.
Now, with state governments providing passes, movement has become a little easier. But fear lingers among staff.
“Also, not every kirana store is open. Most owners are scared of the pandemic. To top it, these are daily-wage earners, so they cannot be away from work. It is a tough situation,” Sujeet says.
Ninjacart had to constantly juggle the mapping of its supply chain network. For example, certain cities marked their zones red, yellow, and green, indicating the coronavirus risk.
“There are orders, and now the supply is slowly increasing but the number of people who can pick up orders is limited. People aren’t coming to deliver orders,” says a Bigbasket delivery executive.
Another issue is that migrant daily-wage earners, the main source of delivery partners, are no longer in cities; they have gone off to their hometowns.
The work-from-home requirement for operations-intensive businesses makes things more difficult. The solution is working with what is available, limiting the number of people to warehouses, and reducing production.
All ride-hailing and delivery players have started funds and are also providing delivery partners with medical insurance. Apart from this, the players aren’t just hiring staff; they are also giving bikes and vehicles.
Yulu has tied up with ecommerce players like Dunzo, Bigbasket, and Licious. They are providing their delivery boys with Yulu Miracles to deliver essentials; they will be paid on a 60 km range and number of hours used. There are also tie-ups with Drivezy.
Still a long way to go…
While the startups are working hard on the ground and with the state and central governments to smoothen the supply chain and logistics issues, the problem is far from solved.
As Sujeet says: “Nobody is currently working to full capacity and it isn’t business as usual."
Bigbasket, Grofers, Dunzo, Swiggy, and Zomato are all working in pockets, and not functioning in others. While many customers face the problem of finding the right delivery slots, the startups aren’t able to even deliver in many areas in Delhi and Mumbai.
“The supermarkets are currently working on less than or equal to 50 percent of their stock. Some stores are delivering in a few areas. Also, the apps are working in a few areas; they aren’t in others,” says a Mumbai resident.
Maharashtra is among the worst hit states in India, and the lockdown here more stringent.
However, while challenges persist, startups, corporates, and the government are working together to solve the problem of the supply chain.
(With inputs from Thimmaya Poojary, Vishal Krishna, Sohini Mitter, and Sampath Putrevu)
(Edited by Teja Lele Desai)
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