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Amazon, Walmart Struggle to Cope as India Enters Lockdown

Saritha Rai
·4 mins read

(Bloomberg) -- India’s largest online retailers including Amazon.com Inc., Walmart Inc.-owned Flipkart and Alibaba-backed fresh grocery delivery service BigBasket are facing severe disruptions and shutdowns, after authorities announced some of the strictest coronavirus-related restrictions in the world.

The country’s 1.3 billion people are in a three-week lockdown, sending many to scour the web for food and daily essentials. But unlike in China, where online fresh grocery services offered a lifeline during its Covid-19 outbreak, Indian authorities are stopping food trucks on highways, and shutting down warehouses and rice mills. They’re also preventing delivery and supply-chain workers from doing their jobs, sometimes through use of force.

To avoid the rush at supermarkets, Hyderabad-based IT executive Kumar Narasimha attempted to buy groceries, fruit and vegetables for his family online but had to give up because supplies or delivery slots were unavailable. “We were asked not to hoard and many of us didn’t,” he said. “Now, those who followed government advice are at a disadvantage while those who flouted social-distancing rules and hoarded stuff are sitting smug.”

Online retail is growing at a searing pace in India, helped by the ubiquity of smartphones and the country’s over half-a-billion internet users. Online retail is expected to reach $170 billion by 2030 -- or over a third of total organized retail -- from the current $18 billion, according to a report from Jefferies. Internet sales of groceries and household essentials were gaining traction among users, the report said.

What could have been an online retail windfall of sorts for startups is not quite turning out that way because of the disruptions. “Policies have to be tweaked to allow deliveries to happen during such lockdowns,” said Devangshu Dutta, the Delhi-based chief executive of retail consultancy Third Eyesight. “Fulfillment capabilities of both online retailers and their suppliers are taking a hit right now,” he said.

Read more: Coronavirus Outbreak Drives Demand for China’s Online Grocers

Amazon said it’s working with authorities to make sure it could deliver “priority” goods safely to customers, including household staples, baby formula and medical supplies. On its Prime Now app -- which usually offers a rich selection of fruit and vegetables -- popular items such as bhendi (okra) and bottle gourd, were frequently out of stock.

On Wednesday evening, Flipkart announced it would resume deliveries after temporarily halting operations. “We have been assured of the safe and smooth passage of our supply chain and delivery executives by local law enforcement authorities and are resuming our grocery & essentials services later today,” Kalyan Krishnamurthy, chief executive officer of the group, said in a note.

Startups like Bangalore-based Growfit, which makes and delivers healthy meals in its 20 cloud kitchens across four Indian cities, say workers are being harassed. Harish Poojary, 26, who manages facilities and logistics at one of the company’s cloud kitchens in Bangalore, said he was stopped on his way to work by the police and beaten. “We are providing a service to our countrymen in these difficult times and this is how we get treated,” Poojary said.

The company’s shut down two of its kitchens after receiving threats from local officials. “It’s an anxious time for us, our workers and our customers,” founder Jyotsna Pattabhiraman said.

BigBasket, the website of the country’s largest online retailer of fresh produce and groceries, was down for several hours earlier this week because of heavy traffic. On resumption, the company posted a notice: “Delivery guarantee is not available.” Co-founder V.S. Sudhakar said a sizable number of delivery staff was shunning work because they were either scared of catching the virus, or had returned to their home towns out of fear, forcing the startup to recruit and train delivery and warehouse staff “on a war footing.”

The company is among startups lobbying officials to ensure that food and supply trucks get a smoother passage on highways. “Our supply of rice has been stuck at a border checkpost, our suppliers such as rice mills are not allowed to operate,” Sudhakar said in a telephone interview. “If this goes on, stocks will run out and India will have a bigger problem in the next couple of weeks.”

(Updates with Flipkart statement on resumption of deliveries in seventh paragraph)

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