Small Vendors Hit By Demonetization, E-Grocers Step Up To The Plate

The demonetization scheme announced by Prime Minister Narendra Modi has put people from different walks of life in a tight spot. Vegetable vendors across the country have found themselves staring at a liquidity crunch. As a result, online grocery stores have had to up their game. 

However, many of the big players in the e-grocery industry were caught unaware by the surge in orders. They usually forecast demand in advance and plan their stocks accordingly. But as panic over the demonetization scheme set in, a majority of the population turned to online vendors to stock up on daily essentials.

Big Basket and Grofers, the largest e-grocers in the country, saw the number of online orders for staples soar over the weekend. Orders to Grofer’s doubled overnight and Big Basket, which operates in 25 cities, witnessed a jump of 35%. Hari Menon, co- founder and CEO of Big Basket, said card payments have overtaken the cash-on-delivery option on its portal. Previously, about half the customers paid by card and the other half by cash-on-delivery, but now digital payments account for as much as 80% of their orders.  

Agitation Over Demonetization

Long lines at the banks and ATMs led panic-stricken consumers to e-grocers, many of whom were signing up for the first time, to shop for vegetables and grains. Albinder Dhindsa, co-founder at Grofers said that the demand for vegetables increased drastically overnight, while the demand for fruits fell.

Challenges Faced By The Vendors

For the small merchants and vendors, the decline in the availability of cash has rendered it difficult for them to replenish their supplies. Further, for vendors and consumers alike, finding change for the Rs 2000 note has proved difficult therefore making everyone resort to making online transactions.

From items like potatoes and rice, to toothpaste and washing powder, the availability of stocks at local kirana stores and neighbourhood vegetable vendors directly affects the sales at hyperlocal e-grocers. This is because many of these local stores sell their stocks online through these websites. Therefore at present, the biggest challenge for e-grocers is to bolster their supply chain so that they are able to meet the spike in demand.

How E-Grocers Are Easing The Process

To ensure smooth functioning, and to meet the increase in demand, Big Basket has started to expand their fleet of delivery vans and manpower. Though they’re trying to move as fast as they can, CEO Hari Menon has said that they will need at least two weeks to get ready for the rush, as new people need to be trained and the vans need to be rigged with chillers and other equipment.

On the other hand, Grofers, which mainly depends on the smaller merchants who sell their goods on the website, has extended a credit line of up to Rs 2 lakh to them. With the main goal focussed at helping these merchants regain their online presence, they have partnered with many brands to help these small businesses by providing them with goods on credit.