Coronavirus Outbreak: Demand Spikes For Online Grocers And Pharmacies Amid Panic Buying

The online players—which depend on deep discounting and cashbacks to lure users—are witnessing a sudden windfall of customers

(Photographer: Nishant Sharma/BloombergQuint)
(Photographer: Nishant Sharma/BloombergQuint)

Online pharmacy Medlife has to replenish the stock of hand sanitisers every eight hours as the disinfectant gets sold out because of panic buying amid the novel coronavirus outbreak.

“People are buying a bunch of things they think that could help to prevent coronavirus,” Ananth Narayanan, co-founder, and chief executive officer of the online pharmacy, told BloombergQuint over the phone. “We’re witnessing a 50-percent organic increase in traffic on our platform.”

The startup is adding more vendors to its list of 600 suppliers as it prepares for rising demand. “We’re hiring people at our fulfillment centres and delivery centres.”

The world’s second-most populous nation started closing public centres like malls and multiplexes across major cities, including Delhi-NCR, Mumbai, Pune, Chennai, and Bengaluru, as Covid-19 cases mount. That’s driven traffic for online pharmacies to grocers.

“I already work from home, and wouldn’t want to go into a crowded place and risk it for my family,” Ajit Abraham, 29, a hiring executive at a Delhi-based multinational firm, told BloombergQuint over the phone. He now buys all his essentials from app-based platforms. “There are delivery delays at times, but that’s okay for now.”

An explosion in the number of such buyers has caused a reversal of fortunes of online players like Medlife and online grocers which usually depend on deep discounting and cashback to lure users. “Monthly buyers who would buy for 30 days are now buying for 45 days or so, majorly in metros,” Dharmil Sheth, co-founder of the online drugstore PharmEasy, told BloombergQuint.

Demand, various players told BloombergQuint, has also increased for medicines like paracetamol and immunity-boosters such as Vitamin-C, leading to shortages. PharmEasy, which sources from around 7,000 vendors, said it’s monitoring the situation to ensure supplies. “The manufacturing lines are quite limited, and that’s leading to shortages due to sudden spike,” Sheth said. “If someone was manufacturing 50,000 masks a day, you cannot suddenly take it to two lakh a day.”

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Online pharmacies, however, said that they’re monitoring their platforms to ensure users don’t game the system. PharmEasy said it has introduced a fair usage policy where people cannot buy more than one pack of an item like sanitiser. Medlife, too, is discouraging people from panic buying, capping the number of hand sanitisers and masks people can buy.

The diagnostic services offered by online pharmacies, including doctor consultation and collection of samples at homes, have also witnessed a spurt in demand. Consumers are checking online if they need to test for Covid-19, Sheth said. “These services are up by nearly 100 percent.”

Medlife said the demand for its voice, video and call consultations and at-home diagnostics has jumped more than 120 percent.

Rush To Buy Staples

Online grocers too have seen demand spiral. Grofers, for instance, said that orders for groceries more than quadrupled over the past weekend, with sales rising 80 percent. “We sold 4 million items, including rice and other staples, just over the weekend,” Albinder Dhindsa, co-founder of the SoftBank and Tiger Global-backed startup, told BloombergQuint. The platform is witnessing a lot of advance buying.

Alibaba-backed BigBasket said it saw traffic and revenue jump twofold as demand for essentials such as staples, fruits and vegetables surged., a Bengaluru-based startup that delivers from nearby stores, said its monthly sales jumped nearly by half to more than Rs 6 crore. “Our average order size has gone up to Rs 1,600 from Rs 700,” Abey Zachariah, co-founder and chief executive officer at Goodbox, said. “We even saw purchases of Rs 4,000 and above.”

Not all companies are equipped to handle the sudden increase in demand due to shortage of delivery staff and inventory management, among others.

BigBasket said in an emailed statement that it faced some disruption in the past three days and has taken corrective action. “We’ve geared up for supplies to meet increased demand,” it said. “We’re not facing shortages in FMCG-branded products except in the case of (hand) sanitiser.”

The company, however, said it’s facing delivery constraints, which will persist for a few days as it strengthens capacity. “It takes time to build capacity in terms of storage, delivery fleet and people,” the statement said. “Our teams are working hard to streamline this and we’ll be back on track very soon.”

Grofers said it isn’t facing supply shortage issues as they ramped up stocks nearly three weeks ago anticipating an upsurge in demand.

That may change if shutdowns increase to counter the virus.

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