How Indian retailers are responding to the COVID-19 second wave

Date : 04 May 2021

Francis Ramos

Senior Retail Analyst

India’s second wave of COVID-19 infections continue to worsen, with no signs of slowing down.  The country’s overwhelmed healthcare system faces a shortage of hospital beds, oxygen, medicines and vaccines.  This has prompted another round of movement restrictions, with shorter operating hours even for grocery operators and other essential services.  And as more frontline workers report unwell, retailers are also ramping up hiring of more staff and sponsor vaccination programmes.

Increased demand for deliveries; stores allowed to open for only four hours in a day

The state government of Maharashtra has notified the public that shops selling groceries, fruits and vegetables, dairy products, confectionaries and meats will be allowed to operate for only four hours in a day.  Delivery of groceries can be done for a longer period between 7am to 8pm, which has driven the increase in number of grocery purchases online:

  • BigBasket: 40% higher demand than last month and introduction of a token system.  Co-Founder and CEO of BigBasket, Hari Menon has mentioned that they are seeing a significant increase in orders since Maharashtra introduced restrictions earlier this month, with demand being almost 40% higher than the previous month.  Menon added, “Last year this time, things were just about starting to fall in place and orders were surging, but like-for-like we’re already doing 10-15% more orders now.  This year, we’re a lot more prepared to cater to the demand.”  BigBasket has implemented a token system where if consumers don’t get a delivery slot now, they will get a token which assures them of a slot at a later date
  • Grofers: More than 600,000 grocery carts during the speech of Prime Minister Modi.  While India’s Prime Minister Narendra Modi was delivering an address to the nation, 600,000 carts have been created on Grofers platform as people fear another lockdown in India.  Grofers CEO and Co-Founder Albinder Dhindsa has also tweeted that this significant spike in the number of carts happened around 8:45 pm IST, when the 19-minute speech of the Prime Minister started.  And during the announcement of the curfew in Maharashtra, Grofers has seen a 60% increase in demand and 20% growth in basket size, filled with ready-to-cook or ready-to-eat food, sanitisers and disinfectants.  To cater to this surge in demand, Grofers has opened up more delivery slots
  • Nature’s Basket: 4x growth in sales than pre-pandemic.  Nature’s Basket is likewise seeing the resurgence of online demand.  The retailer has reported that the demand curve for online groceries has kept rising between March and September 2020, and stabilised for a while.  But due to the second wave of the pandemic in India, it has grown sharply once again, with business growing 4x more than pre-pandemic levels

Hiring of more staff to meet workforce shortage

Ecommerce companies are stepping up hiring, especially in metropolitan cities that are hit the most by the second wave of COVID-19.  A shortage of workers has severely affected online grocers just when demand for grocery delivery is at its peak.  To address this, online retailers are now aggressively increasing recruitment efforts and ramping up testing of their frontline workforce.

  • BigBasket, the Bengaluru-based online platform leader, is hiring double the number of workers it needs to cope with the surge of online orders by 23% to 25%.  Founder and CEO of BigBasket, Hari Menon, commented, “This year, people are falling ill and that’s causing a bit of a problem for us. The moment someone shows any signs of illness, they’re not supposed to report to us, and now so many people are calling in sick.”
  • Walmart-owned Flipkart has also observed an increase in absenteeism due to the spike in coronavirus symptoms.  But because of the relatively younger age of its workers, the retailer has reported that most are exhibiting milder symptoms.  To ensure the safety of its staff and customers, Flipkart hopes that it can get its workers vaccinated starting next month

Sponsorship of vaccination programme for retailers’ staff and customers

The slow roll-out of the Indian government’s inoculation drive has also prompted retailers to launch their own initiatives to encourage their employees and customers to get vaccinated.

  • Grofers has pledged to cover the cost of an organisation-wide COVID-19 vaccination, which includes the company’s employees, their family members and contractual workforce. Additionally, Grofers is giving a month of free Smart Bachat Club membership to all existing and new customers who are getting themselves vaccinated. Grofers' Smart Bachat club membership offers lower price, priority delivery, and ensures maximum savings for its customers that will enable people to access their daily essentials, safely at the convenience of their home. To avail of this benefit, customers are required to upload proof of vaccination on the link available on the Grofers app
  • Reliance Retail, under Reliance Industries Limited (RIL) has also rolled out its own vaccination programme ‘R-Suraksha’ for all employees and their eligible family members above 18 years of age, since May 1
  • Amazon India has also reported that it will cover the COVID-19 vaccination cost for all its employees and associates, as well as those in its partner network ecosystem.  The retailer has also set up other support mechanisms for employees and associates working with Amazon and hired through staffing agencies.  These include cost coverage for COVID-19 treatment, hospital search and coverage of prescribed COVID-19 tests

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