E-commerce firms ramp up operations to meet growing demand amid Covid spike

Besides growing tech and digital enhancements, these firms are ramping up hiring of more delivery partners and reinforcing existing covid protocols

With the cases of the new Omicron variant rising sharply and India could face an intense third wave of coronavirus infections, top e-commerce companies including Amazon, Meesho, Udaan, Dunzo, Zepto and DealShare are scaling up their operations to reach customers as the demand for their services increase. The pandemic has accelerated the shift to e-commerce, and more consumers are expected to shop online at a higher frequency this year than last year, according to analysts. Besides growing tech and digital enhancements, these firms are ramping up the hiring of more delivery partners and reinforcing existing covid protocols.

Covid-19 cases in the country show an exponential surge in the country. On Friday, India recorded 1,17,100 fresh coronavirus cases, significantly higher than the 90,928 cases on Thursday.

“What we have learned from the Covid-19 pandemic is how e-commerce and all forms of safe and reliable home delivery of all products are the best ways to maintain social distancing norms. Customers trust Amazon.in to safely deliver all products according to their respective needs,” said an Amazon spokesperson. “In these unprecedented times, together with lakhs of sellers, small and medium businesses and associates across our network, we continue to work hard to serve our customers, while following stringent safety measures and government guidelines,” said the Amazon spokesperson.

SoftBank-backed fast-growing internet commerce platform Meesho is seeing an increase in demand for health and wellness products over the last one week. For instance, the orders for sanitisers have doubled and there has been a 34 per cent increase in demand for masks.

“At Meesho, we have built a strong playbook to manage the local nuances of covid-led restrictions that might be put in place,” said Utkrishta Kumar (UK), vice president and general manager, business at Meesho. “We have the tech capabilities to implement local guidelines into our order taking flow to comply with restrictions if any.”

Meesho’s third-party supply chain ecosystem has been at the core of its fulfilment operations, enabling last-mile delivery of orders even during previous lockdowns.

In the last one week, udaan, India’s largest business-to-business e-commerce platform has streamlined its business strategy and has augmented its supply chain and logistics infrastructure to cater to any foreseeable demand. Towards this udaan has restructured its inventory planning process on a daily basis to ensure there is sufficient and continuous supply.

“We are experiencing high demand for diapers, laundry and personal care products. With a robust and extensive network, supply chain capabilities we continue to offer next day delivery to all our retailers,” said Vivek Gupta, head, food and FMCG business, udaan. “To ensure continuous supply and to meet the ongoing demand, we have added additional manpower and vehicles to ensure there are no disruptions in supply of essential commodities. We have also strengthened our procurement and added quality staples like rice, flour and pulses to ensure continuous and regular supply,” said Gupta.

Quick commerce platform Zepto, which was launched almost 6 months back by two teenage Stanford dropouts, has seen significant sales growth in the last one week. It grew by 36 per cent week over week. Consumers have been doing some pantry loading of categories like cooking essentials and packaged food. Cooking essentials like atta, rice, oil, dry fruits etc have grown by 49 per cent. Within cooking essentials, it has seen pulses growing by some 76 per cent and cereals and rice products have grown by 54 per cent. Categories like atta and oil have grown by over 35 per cent.

“Packaged food categories like biscuits, noodles, breakfast cereals and ketchup have also posted similar growth. Biscuits have grown by around 59 per cent and noodles have seen a sharp rise in sales by 70 per cent,” said Aadit Palicha, CEO and co-founder of Zepto, which recently raised $100 million in its Series C round at a valuation of $570 million.

With many consumers deciding to stay indoors, Zepto said there is also a marked increase in sales of frozen snacks which has grown by over 35 per cent. Fresh categories like fruits and vegetables, milk, eggs and bread have also seen a steady growth of over 25 per cent. Tea, coffee and juices have grown by over 55 per cent on Zepto platform.

Even in the grocery non-food space, Zepto has seen a lot of action. Handwashes and sanitisers have grown by around 75 per cent. Tissue paper and rolls and disposables have seen a jump of over 70 per cent.

“We are taking the measures to ramp up our delivery fleets aggressively due to the surge and demand we're seeing anywhere between,” said Palicha of Zepto. “We're forecasting anywhere between a 50 to a hundred per cent surge in demand over the next month or two, depending on the severity of the situation.”

Due to the Covid surge, Google and Reliance-backed quick commerce player Dunzo, has witnessed a surge in demand for products across categories fuelled by movement restrictions and pre-emptive caution among people.

“Medical devices and sanitisation products like masks, sanitisers, thermometers, oximeters and other hygiene items have been moving at a much higher velocity in the past one week and we expect this surge to only multiply further,” said Kabeer Biswas, CEO and co-founder of Dunzo, which on Thursday raised $240 million in its latest round of funding led by Reliance Retail Ventures Limited,

Within its instant delivery model Dunzo Daily, there is also a 50-60 per cent increase in demand for snacks, biscuits, beverages and other ready to eat products. Fresh items like fruits, vegetables, milk and meat too have seen an uptick but since these are perishable items, Dunzo expects a consumer to continue ordering these at a higher frequency.

Social commerce firm DealShare which is mainly focusing on rural India or Bharat said given its differentiated model of developing micro-entrepreneurs Dealshare dost (DSD) in each locality, those DSDs are themselves hiring delivery boys to scale their business. In the last one week DealShare has seen significant growth for products such as flour (40 per cent); edible oil (15 per cent), sugar  (61 per cent), cleaners (120 per cent); pulses (13 per cent); laundry (22 per cent), noodles 39 per cent. “Products that we are anticipating that will have more demand in the near future are- dry fruits, biscuits, processed foods, health drink and home care,” said Sankar Bora, founder and chief operating officer, DealShare, which last year attracted $144 million in funding at a valuation of $455 million, “Our fleets are getting scaled up continuously month over month,” said Bora.

These e-commerce firms are prioritising employee well-being ranging from support for Covid treatment including hospitalisation to providing facilities for physical and mental health. Walmart-owned Flipkart said that for more than 1 lakh of its supply chain employees, including delivery executives, who form the backbone of e-commerce, the firm has been organising vaccination camps at its facilities across the country in addition to driving awareness sessions on the benefits of vaccinations. “We have rolled out initiatives such as Safekart and Suraksha to reiterate our Covid safety protocols among employees and offer benefits such as free doctor teleconsultations, instant credit,” said a Flipkart spokesperson. “We also have an audit process that continues to evaluate existing safety protocols and enhance them.”