A sharp rise in demand and the reduced number of delivery staff have held up BigBasket’s operations, despite having enough stock to last for the next three months, chief executive officer (CEO) Hari Menon said.
After the first phase of lockdown was announced, consumer staples, such as flour, tea and milk, were out of stock on the BigBasket app, while closest rival Grofers reported a supply crunch. Mint had reported last month that BigBasket was finding it difficult to fulfil the sudden surge in orders, with people resorting to panic buying.
In a series of tweets, Menon said that demand had gone up 3-6 times across its grocery delivery platform. However, in the week after the initial lockdown was announced, BigBasket had taken steps to procure supply and keep with growing demand.
“We plan for demand three months ahead on a rolling basis. This means setting up warehouses, procuring racks, picking devices, crates, hiring people, delivery vans, etc… We also have close relationships with our suppliers, FMCG (fast-moving consumer goods) companies, more than 15,000 registered farmers and mills, which meant we would be able to service the additional post-lockdown demand comfortably," Menon said.
In the last year alone, the e-grocer has stepped up its supply chain and warehousing operations. In early 2019, the firm began expanding its network of last-mile delivery hubs or dark stores—several warehouses within city limit—which, according to Menon, helped the company increase the capacity of its supply base rapidly. “(With dark stores) we were covered in terms of warehouse capacity for two years. We are, therefore, even better prepared on infrastructure than usual," he added.
“However, a very large portion of our workforce left for their villages just prior to the lockdown. That was something we didn’t anticipate, and which meant we couldn’t pick orders and deliver them in sufficient numbers to satisfy the 3-6x increase in demand."
The startup has started hiring new workers to service the demand, especially warehouse staff and delivery executives in all cities. BigBasket also entered into partnerships with cab aggregators and 57 other establishments, including restaurant associations, non-essential retailers and garment factories, to source ground staff.
“However, recruitment and training do tend to take time. Also, a lot of the people who applied for jobs were only willing to join after the lockdown. Fortunately, things have improved now, and should get better in the next few weeks."
