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Indian online grocers prepare for surge in demand driven by panic over the new coronavirus

Written by Avanish Tiwary Published on 

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Grofers and other online grocery platforms are scrambling to meet demand.

As multiple cities in India have ordered shutting of shopping malls among other public places due to the global pandemic COVID-19, local online grocery services have begun the preparation to handle the increase in orders.

In one single case, online grocery delivery company Grofers last Saturday delivered goods worth INR 52,000 (USD 700) to a panic-buying customer in Chandigarh. And online grocery delivery companies like Grofers, Bigbasket and so on are all working hard to increase their capacity to meet demands from customers who are now on a panic-buying spree.

Grofers co-founder Albinder Dhindsa along with his tech team has been working late nights to ensure smooth buying experience even when the load on the system increases. Similarly, Bigbasket co-founder Hari Menon has been spending most of his time at warehouses for the last two days.

“We have been upping our system since last week as the situation is getting worse. We fine-tuned our tech systems so that when the scale-up happens we are prepared,” Dhindsa told KrASIA.

Grofers, backed by SoftBank and Tiger Global, saw a surge in demand on its platform since last weekend in the wake of the shuttering of local shopping complexes. Over the weekend, Dhindsa said, there was a 70-80% nationwide spike of people shopping on Grofers causing its average basket size to go up by 20%.

The sudden increase in demand for grocery products has inevitably affected delivery time. Grofers, that does next-day delivery and in a few cities, same-day delivery, said its delivery time has gone up to three days.

“Distribution is going to be the biggest pain point for us which can put our systems under pressure. We have informed our customers about the delay and they understand the uniqueness of the situation,” Dhindsa said.

Before taking any major steps, currently, Dhindsa is waiting to see if the demand surge is going to continue or if it will fizzle out in some time. “We will give it sometime before we increase the frequency of trucks to two to three times a day. It’s not like we need more people or trucks, but just increasing the frequency should do the trick,” he said.

Anti-hoarding policy

Panic buying of essential household items, specifically sanitizers and toilet papers, is one of the side-effects of the novel coronavirus that has taken 6,500 lives around the world.

One of the first few steps that Grofers took was to put in place a system that can detect buyers’ hoarding behavior and simply block such orders in real-time. “People are trying to fool the system by placing orders from multiple phone numbers or user IDs, but our anti-abuse algorithms are able to identify such cases,” Dhindsa said.

Products such as hand sanitizers, soaps, tissues, and staple products have been rationed for each user restricting them to order only two of each. According to Dhindsa, if people start hoarding that can cause stress on the system of every online grocery company.

“We are telling people not to panic buy. We might be out of hand sanitizers today, but we will have them by tomorrow. We are keeping a transparent system for users,” he said.

Dhindsa claimed sourcing of products is not an issue till now and all the manufacturers are well-stocked to handle the surge in demand. “Unless this goes on for three months, it’s going to be okay. We are already in touch with manufacturers to understand their situation and if we need to be prepared for any shortage,” he said.

However, Dhindsa said, there are a few categories that are facing a unique problem. Factories are capable to make products such as shampoos, hand sanitizers, and soaps to satiate the current demand, but there is a shortage of packaging boxes as they largely come from China.

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