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Online sale fails to salvage grocers

Only 10 to 15 supermarkets in the city registered with online delivery groups ,Though the sale was better during the first phase of lockdown, it came plunging after restrictions were relaxed 

Published: 21st May 2020 07:08 AM  |   Last Updated: 21st May 2020 07:08 AM   |  A+A-

Express News Service

KOCHI: When lockdown came into force following Covid-19 outbreak, many supermarkets and hotels took the online delivery route. While online delivery of food was a trend that the city had fully accepted, the doorstep delivery of groceries saw an initial surge in during the lockdown. This helped online delivery platforms such as Swiggy and Zomato increase their customer base. The applications had also asked their users to suggest grocery retailers in their area. However, the trend seems to have waned immediately.

According to Supermarkets Welfare Association Kerala (SWAK), only 10 to 15 per cent of the 350 members in the district have registered with online delivery groups. Most of them are retail outlets operating from the heart of the city. Though a few shops in rural areas and suburbs have tied up with online delivery systems, they are yet to see much sales.According to the manager of a supermarket chain that operates its own home delivery system, the demand rose during the first phase of lockdown, but has come down since the relaxation in public movement. 

Browsing the aisle
The retail margin of supermarkets which focus on groceries is about 15 per cent. “Existing online delivery platforms charge almost six to seven per cent commission, making long-term adoption of online delivery services non-viable,” said Siyawudeen K A, state secretary of SWAK. “Supermarkets have also seen a slump in sales, since customers who tend to spend around `3,000 to `4,000 while purchasing groceries from the store, order just essentials, for around `500 while shopping online. Browsing the aisles of the retailer plays a big role in how much the consumers buy,” Siyawudeen added.

That said, supermarkets see ‘pick-up’ option, an alternative option,  as a long-term viable solution. Many shops are circulating their WhatsApp numbers to customers, who can message their requirements. Once the order is assembled by staff, a message will be reverted to the customers who will have to come in to just pay the bill and take their kit.

Many players
With the digitisation of delivery services, many software developers are approaching the supermarkets with their home delivery apps. The lack of a robust and independent delivery system is a hindrance, however. There were also instances wherein the FMCG manufactures directly approached the online delivery services, much to the dismay of retailers. “This move which sidelined retail outlets was unethical. Many companies withdrew from such platforms after the association raised it,” says Siyawudeen.

Restaurants
The hotel industry too was allowed to function through the lockdown in collaboration with online delivery services. But small hotels that were unable to afford the commission charged had to face the losses. Taking this into consideration, Kerala Hotels and Restaurants Association is developing an aggregator app, which will include all restaurants in the state. “Our aim is to develop a delivery system that charges commission rates which are economically viable for eateries of all ranges. The app will roll out soon,” said Azeez Moosa, district president of KHRA.

Not a viable option 
●    Most of them are retail outlets operating from the heart of the city. 
●    Though a few shops in rural areas and suburbs that have tied up with online delivery systems, they are yet to see much sales.
●    The retail margin of supermarkets which focus on groceries is about 15 per cent.
●    Existing online delivery platforms charge almost six to seven per cent commission, making long term adoption of online delivery services non-viable.
●    Supermarkets find aisle shopping beneficial.

bid to snub retailers  
Many shopkeepers alleged that there were instances wherein the FMCG manufactures directly approached the online delivery services, much to the dismay of retailers. However, this stopped after retailers protested. 

new app 
Kerala Hotels and Restaurants Association is developing an aggregator app, which will include all restaurants in the state. The app will roll out within the next two months.

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