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India’s online grocers will thrive post-Covid-19, says analyst

India’s online grocers face a bright future following the Covid-19 lockdown, according to analysis by industry research firm GlobalData.

Retailers in the territory enacted a rapid recovery after the lockdown was implemented, according to the data, enabling a quick turnaround and converting the situation into an immense growth opportunity.

The nationwide lockdown, beginning March 25, saw a boom in the online grocery business that saw retailers such as BigBasket, Grofers and Licious initially struggling to benefit from the massive spike in demand, as shortage of delivery staff and challenges with local administrations disrupted supply chains.

“Most of the migrant workers hired as delivery staff by online retailers chose to return to their hometowns in the initial panic caused by the lockdown, thus reducing the operational capacity of these firms,” said GlobalData technology analyst Saurabh Daga. 

“While the central government had allowed online delivery of essentials, the local administration were often not clear about permissions for movement of delivery vehicles or staff, which led to delays or missed order deliveries.”

A rapid rollout of new strategies and solutions by India’s online grocers – such as new apps and partnerships – soon saw retailers in the territory overcoming challenges and driving their businesses to meet the operational difficulties. Many third-party logistics companies also rose to the occasion to support online platforms with innovative technologies.

The data suggests better prospects await these companies in the post-lockdown era, as the nation stares at a prolonged period of self-isolation and social distancing practices and continued shift in consumer purchase, which will allow them to expand their business and increase customer base further.

“Online grocery retailer BigBasket’s success at raising an additional US$60 million funding in a venture round and US$51.8 million in debt financing from Alibaba, and Reliance JioMart’s debut on Facebook-owned messaging platform WhatsApp, only indicate that the market participants are anticipating and gearing up for a bigger and brighter future ahead,” said Daga.

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