Coronavirus: Ninjacart initiative is connecting farmers and consumers through Zomato, Dunzo, and Swiggy
At 4 am, Kumar N loaded his truck with 40 tonnes of onions and drove to Bengaluru’s KR Market from his farms at Hoskote to ensure that he could sell his produce and make some money.
But the lockdown and restricted movement meant there were no takers for the truckload of onions. He finally sold the lot for Rs 1,000, just enough to pay for fuel for his truck.
Kumar’s situation isn’t unique. The nation-wide lockdown, which began in March and continues, has left many farmers in the lurch.
Shriram Gadhave, President of the Vegetable Growers Association of India, attested to this fact in Pune-based publication Sakal Times, saying farmers were not able to sell and tonnes of produce was getting wasted due to the lockdown. Several farmers have, in fact, left produce unharvested, as vehicles and movement are restricted.
The pre-coronavirus supply chain worked like this: Farmers would harvest their produce, take it to local mandis, after which wholesalers distributed it to the retailers. But the lockdown hit logistics and restricted movement.
This problem led farm-to-fork B2B grocery startup Ninjacart to start the Harvest the Farms initiative and connect farmers keen to sell their produce directly to consumers.
Harvest the Farms will be launched in partnership with local grocery stores and will be available via Zomato, Swiggy, and Dunzo in Bengaluru, Mumbai, Delhi-NCR, Ahmedabad, Chennai, and Pune. Customers can log onto Zomato Market, Swiggy Grocery, or Dunzo Fruits and Vegetable section, search for the nearest Ninjacart-powered stores, select fresh vegetables and fruits, and place orders.
Working with a broken supply chain
While essential ecommerce has been seeing a growth to the tune of 20X, many delivery startups are facing constraints in the supply chain. The extended confinement has truly tested the elasticity of the hyperlocal delivery supply chain.
The first week was the worst, with delivery boys not being allowed to ply, and factory and warehouse workers not reaching their workplaces. There has also been another severe challenge in terms of unavailability of labour. Most of the migrant workforce is returning home.
The movement of goods may have eased now, but problems persist. These include supply, as most items come from different parts of the state; movement across state borders; and lack of proper distribution due to intra and inter-state logistics issues.
“At Ninjacart, we were swamped with calls from our farmers, who were worried about the effect of this situation on their basic function. These farmers are the main sources of supply to local agents, retails shops, and kiranas. With large-scale restrictions on movement, we were staring at disrupted supply chains. Farmers not part of our community also reached out to us. The pressing question they had was if we would be willing to increase our buying capacity, to ensure there was no wastage of crop,” says Vasudevan Chinnathambi, Co-founder, Ninjacart.
This took the team back to the drawing board to check demand and supply mapping. The problem was that the current demand Ninjacart catered to could not absorb the quantum of supply the farmers offered.
The demand-supply economics
The founders realised that by using existing supply chain networks and partnering with hyper-local delivery companies like Swiggy, Zomato, and Dunzo, Ninjacart could start selling directly to the end consumers at a marginal cost.
“We saw this as an opportunity to help famers as they were left in the lurch, and launched the Harvest the Farms initiative. From day one, we have seen a good demand and an increasing number of orders being placed through various aggregators. As demand continues to rise, we are looking at partnering with more farmers to create a supply chain that benefits everyone involved,” Vasudevan says.
Within the Ninjacart farmer network and even outside, the team has identified produce available in large quantities that cannot reach customers. The team works with the farmer to understand market value, and mutually agree on a price at which Ninjacart supplies these directly to the customers.
“This way, we are able to deliver the produce to end consumers. The supply chain costs are currently borne by us, as it is in our vested interest to help farmers and ensure consumers are able to purchase fresh vegetables at cost-effective rates,” Vasudevan says.
As crops were sown prior to the lockdown, there is plenty of supply. The Ninjacart team is looking at increasing the demand through Harvest The Farm.
“We are hoping that we will make fresh produce more accessible to consumers and increase demand by partnering with platforms like Swiggy, Zomato, and Dunzo. Once that’s inline, we can see more and more farms getting harvested. However, it is critical to ensure that farmers don’t lose confidence and continue to sow their farms, thereby maintaining a steady supply to meet the demand,” Vasudevan adds.
Oiling the supply chain
In the initial days of the lockdown, the disruption in the production, demand, and supply chains led to a 50 percent drop for Ninjacart. Several factors like movement of labour, travel, transportation, and restrictions in specific areas, cities, and states made the supply chain vulnerable. Sourcing fresh produce from farmers was a major challenge.
“In addition, operating costs rose at every stage, which meant we had to pay more to keep the supply chain running. We were only able to operate for a few hours a day, so we started working with local governments to figure out how to ease the process going forward. We have now found our rhythm,” Vasudevan says.
Apart from working overtime to restore supply chains to their original form, the team is also ramping up capacities at various stages of operations. It is engaging with stakeholders to maintain trust and confidence in the entire ecosystem, hiring staff, boosting demands from multiple channels, directly selling to consumers and residents, supplying to orphanages, and focusing on multiple initiatives to drive the supply chain.
“As restrictions on movement are eased, supply chain operations will definitely become smoother. From farmers being able to sow and harvest their crops easily to retailers opening their shops, the supply chain will slowly but steadily come back on track. But we need to operate in a way that we are able to rebuild the economy while ensuring we are not putting our stakeholders’ lives in danger,” Vasudevan says.
Most consumer startups are looking at innovative ways to solve supply chain problems. Dunzo, Swiggy, and Zomato have gone in for direct tie-ups with FMCG brands. They have also collaborated with ride-hailing platforms like Vogo, Bounce, Drivezy, and Rapido to ensure ease in delivery.
“The lockdown has affected fragmented supply chains with multi-party participation. Going forward, we will see more holistic and organised supply chain partners, powered by digital technologies, entering the market.”
“There is also an increased awareness about hygiene, which will become a part of daily operations, at processing units and vehicles. We have seen that customers are willing to pay a small premium if it guarantees hygiene, and this will be a big part of how we operate in the near future,” Vasudevan says.
(Edited by Teja Lele Desai)