Covid-19 Effect: How e-comm platforms are coping with demand surge
With the Coronavirus pandemic spreading across the globe at an alarming rate, governments all over the world have urged their citizens to practice social distance and limit going out of home unless necessary. Countries are under lockdown, with borders sealed for international travel. Meanwhile, more and more companies are adopting a ‘work from home’ policy.
As Prasad Shejale, Founder & CEO, Logicserve Digital, observed, “These are truly extraordinary times, and the whole world is trying its best to deal with this uncertainty. It is completely a black swan event and, depending on the severity of its spread; humans will react with their innate survival instinct. There is definitely a huge dependency on how the situations unfold, but the world has changed for sure.”
“For the online players, it’s an opportunity to lap up. With people forced to stay home it is but obvious that they will resort to online for multitude of things to continue in their daily lives,” opined Shekhar Mhaskar, Chief Growth Officer, Isobar. According to him, Purchases of essentials, entertainment, food, medicines, etc., would form the majority of the pie. Not only that, but online payments, too, will be on the rise as a result.
“All such online services should, and will spend more to reach out to their customers to offer services in conformation to health advisories and assuring the users of uninterrupted daily life. It will also be beneficial in the long run since this would condition the consumer even stronger to continue the online behaviour. A delta investment now will go a long way,” Mhaskar added.
It comes as no surprise that the hoarding mentality is growing as people are emptying store shelves of essential commodities. Now, with various state governments in India ordering the closure of malls and most public places to prevent further spread of the virus, people are moving more and more to online shopping.
Media reports state how online grocery portals such as Big Basket and Grofers have seen exponential growth in orders. There are also reports that Amazon is planning to hire 1 lakh people across the US to meet up with the surge in orders.
Speaking about the surge, Albinder Dhindsa, Founder and CEO, Grofers, told Adgully, “Over the last couple of days, we have seen customers buying items on our platform in large quantities across cities as well as categories.”
Giving a city-wise break-up, Dhindsa said, “Mumbai, Bangalore, Pune and Ahmedabad have seen a higher surge, with nearly 80 per cent growth, followed by Delhi NCR and Hyderabad at a 60 per cent spike in business. We have seen a rise in both the number of orders (45%) as well as order value (18%). Personal hygiene products, followed by floor cleaners have seen a surge in demand along with immunity boosting products such as Chyawanprash and honey. Essential items such as flour, dal and rice are also being bought in large quantities by our customers.”
A Bigbasket spokesperson informed Adgully that the online grocery portal had seen 2x growth in both traffic and revenue. This has increased 15-20 per cent in Basket value.
Shenaz Bapooji, Chief Marketing Officer, Shopmatic Group, too, said that the online platform has seen digital adoption rise as businesses are getting impacted due to Covid-19.
Managing supply chain in times of crisis
The Bigbasket spokesperson admitted that the platform had faced some disruption in the last 3 days. However, corrective action has now been taken and the platform is geared up for supplies to meet the increased demand. Demand for staples such as flour, dal, fruits and vegetables have increased. “We are in control because the predominant share is from our private label products. We are not facing shortages in FMCG branded products except in the case of sanitizers. In effect, supply will not be an issue,” he affirmed.
The Bigbasket spokesperson further said that the platform would face some constraints for a few more days because it took time to build capacity in terms of storage, delivery fleet, and people. “Our teams are working hard to streamline this and we will be back on track very soon,” he added.
Dhindsa maintained that their supply chains have not faced issues so far, and added that Grofers is working closely with its manufacturers to make products on the platform available to customers, at the right prices. “We are taking adequate steps to ensure hygiene and packaging in delivery, for the safety of our personnel, as well as our customers. Our warehouses are disinfected and sanitized on a daily basis to keep the inventory virus free. Our priority will continue to remain ensuring the safety of everybody – our delivery personnel as well as our customers,” he informed.
Shopmatic Group’s Bapooji said, “We continue to provide support to our merchants through live chats online on goshopmatic.com and via our app, and are available to provide all help via emails, webinars and online training options.
Taking on the hoarding mentality
In times of crisis, the primal survival instinct kicks in and hence, it is seen in the current Covid-19 spread, where entire shop shelves have been emptied of essentials such as hand sanitizers, soaps, household bleach, toilet paper and certain grocery items as people have taken to hoarding.
To address this issue, Dhindsa said, “While we appreciate customers moving to safer mediums for purchase of these items, we request our shoppers to avoid hoarding of products. We are discouraging hoarding behaviour of essential items and promotions for the same are being discontinued as well.”
On the other hand, the Bigbasket spokesperson said, “We are not witnessing hoarding behaviour thus far. To our customers, our stance will be not to panic and buy more than what they need. We will gear up for the increased demand and the availability of products will not be an issue.”
To meet up with the increased demand, Shopmatic is encouraging as many entrepreneurs and small businesses to access the platform, to create their individual e-commerce stores and continue conversations with their existing customers and new ones who come through the digital medium.
Summing up the current situation, Logicserve’s Shejale observed, “Considering the current scenario, most of us will embrace digital and we will surely see more of it in the coming times (mid-term as well as long-term). This will eventually lead to a rise in digital spends too. Having said so, these are really tough times that the entire world is witnessing.”