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Flipkart and Amazon focus on grocery delivery amid 21-day lockdown in India

Only essential services like food, grocery, and medicines among a few others are allowed to operate.

For e-commerce giants Amazon India and Flipkart, their e-grocery service has turned out to be a savior as the country went into a 21-day national lockdown on March 24, forcing all other non-essential businesses to stop operations temporarily.

The lockdown is aimed at containing the spread of novel coronavirus in the country which has infected over 600 people and claimed 13 lives so far. Except for a few essential services including food, grocery, milk, and medicine all other businesses are asked to be on a three-week hiatus.

On Tuesday, in a blog post, even before the lockdown was announced, Amazon said its India unit would temporarily stop taking orders and disable delivery for non-essential products and would prioritize the sale and delivery of household staples, packaged foods, healthcare, hygiene, and personal safety products.

Subsequently, Flipkart also shut down its larger e-commerce operations to focus on its e-grocery service Supermart. The Walmart-owned company reportedly kicked off deliveries of food and other essentials in Bengaluru, followed by Mumbai, Chennai, Hyderabad, and Delhi-NCR (National Capital Region).

Over the last couple of years, Amazon and Flipkart have made significant investments to grab a pie of India’s soon-to-be USD 10.5 billion online grocery market. Flipkart re-entered grocery space in the first half of 2018 with Supermart–two years after shutting down its grocery delivery service Nearby. Amazon, on the other hand, first entered the grocery delivery segment in 2016 with Prime Now. By mid-2018, it geared up to expand the service and launched Amazon Pantry on its main shopping app with the delivery time of one to two days. In August last year, Amazon brought its 12-year-old global e-grocery offering Amazon Fresh to India with a promise to deliver groceries in two hours.

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“In India, 60% of household spending is on food. And that’s not being catered by e-commerce companies as of now fully. To increase volumes and frequency, they have to solve the grocery problem,” Satish Meena, an analyst at Forrester, told KrASIA in a previous interaction. “So a lot of investment is going to be there.”

Now, as all non-essential businesses have been temporarily shut to limit COVID-19 spread, e-grocery has emerged as the silver lining for e-commerce firms to continue operations and remain relevant.

In a situation where the number of orders is piling up, all the online companies that fall in the essential business category such as food delivery, grocery, and medicine, are working together to ensure smooth operations.

On-ground reality

Although Indian Prime Minister Narendra Modi said grocery, food, and medicine will be available for people to buy from shops as well as order online, things are quite different on the ground.

Over the past few days, e-tailers like Flipkart, Amazon, Bigbasket, and Grofers, along with e-pharmacy firms such as 1Mg, saw their delivery agents getting arrested and warehouses being shut by the local authorities for not adhering to the lockdown. Many of these companies stopped accepting orders earlier this week as they could not deliver. Consequently, they reached out to the government and local authorities demanding clarity on what is allowed during the shutdown period.

Last night, Bengaluru Commissioner of Police, called a meeting of online retailers offering food, grocery, vegetables, fruits, and medicines to assess the situation and streamline the operations. Later, it was decided that all delivery persons shall wear a duty pass issued by the police to be easily identified. Employees of cold storage and warehousing services are also supposed to wear these badges.

“We are grateful for the clarification provided by the government and local state authorities on the functioning of e-commerce during the lockdown. We are resuming our grocery services today,” Kalyan Krishnamurthy, CEO, Flipkart said in a tweet yesterday after the meeting.

Grofers CEO Albinder Dhindsa told the wire service ANI that the company has adequate supplies so prices will remain the same as before.

Gurugram police have reportedly allowed online delivery services Zomato, Flipkart, Amazon, Blue Dart, Wow Express, Swiggy, Grofers, BigBasket, MilkBasket, Dunzo, Big Bazaar, and IFFCO Tokyo Goods to operate.

Many other states have also come forward to help e-grocers and offline retailers in delivering the essentials. For instance, the state government in the North Indian state of Uttar Pradesh has approved 12,000 vendors to start delivering, milk, fruits and vegetables, and other essential commodities during the lockdown to reduce panic among consumers.

Even though, these companies are allowed to deliver, the huge number of orders have paralyzed their service. Amazon grocery app, Prime Now app, said it is not accepting any more orders due to ongoing events that are outside its control. It said the current orders may also be delayed or canceled. Amazon fresh, available on its main e-commerce app, said there are no delivery slots available till this week.