 Hello and welcome everyone to the virtual conference on hyperlocal 2.0, COVID-19 effect, how delivery of food and grocery is making a comeback by Entrepreneur India. I am Pritima Bharadwaj, Project Head, Webinars at Entrepreneur India. Today's discussion will revolve around the power of hyperlocal in the wake of COVID-19, the power of going deep with hyperlocal audiences to build richer and stronger insights. Let me start by laying out the ground rules for attendees. The discussion will go on for approximately 1 hour 45 minutes. This will be followed by Q&A session for next 15 to 20 minutes. If you have any questions during the course of the discussion, you can post them through the Q&A option at the bottom of your screen. Mention in your question if it is directed at any specific panelist. We will take questions, post the panel discussion. Please participate in poll during the webinar. We would also like to request the attendees to keep the questions within the scope of discussion here today and not pitch their businesses. We also encourage all the attendees to network through the chat and Q&A option and to introduce yourselves. Our first session is on how hyperlocal e-commerce is giving a revolutionized retail experience. This session will be for approximately 45 minutes followed by question and answer sessions for 15 minutes. Let me now introduce my panelists for this session. We have with us Mr Sunil Jain, Founder and Managing Partner, Sprout Capital Advisors LLP, Mr Vasudevan Chinathambi, Co-Founder Ninja Card, Mr Gautam Kapoor COO and Co-Foundership Rocket, Mr Srinivas Murti, Senior Vice President PTM Mall, Mr Mukund Ke, Senior Vice President Urban Company. Our moderator for this session is Ms Ritu Maria, the Editor-in-Chief of Entrepreneur India and Asia Pacific who would give the welcome note and moderate the session. Over to you Ritu. Thank you very much Prithima and a very, very warm welcome to all the participants and to all the speakers who joined us here today for this hyperlocal 2.0 conference, virtual conference I must say that we've organized today. Now India is really, I would say no, you know, it's not a stranger to hyperlocal. Our Kiranas and mom-and-pops have always been hyperlocal as offline retailers at any point of time. So it's something that we have, we have been used to. Now the thing was that how do you give customers a better experience in what was already being offered to them as a hyperlocal kind of arrangement. So hyperlocal e-commerce today is going to come in now in its second avatar post and I would say amidst the lockdown that we are seeing today. And I'm interested in the IC that hyperlocal e-commerce has sort of gone very broad range. It is today applicable within food, within medicine, consumer goods services. And we've got a great panel here today who's going to talk about all these aspects and look at all these very closely. Now, you know, the biggest aspect of hyperlocal e-commerce and this is for all my fellow participants over here is that supply chain is very closely located to both the buyer and the seller. That is what makes hyperlocal e-commerce a very profitable and sort of a good business model to look at. But you know what I see emerging in India because as I said earlier that it was not as if we were not used to hyperlocal earlier also. So what I would like to probably see is a super hyperlocal coming in maybe in the coming days post the lockdown where we'll probably not just look at two hour deliveries but maybe 15 minutes deliveries or 20 minutes deliveries happening to the customer. And that is where I think hyperlocal will be able to truly find its mojo in one sense where they'll be able to serve big volumes and large customers. Now, you know, obviously the question today is that if Kiranas were already able to do this then why hyperlocal e-commerce? I think Kiranas were able to do it but what they were not able to sort of meet was the consumer experience, the transparency, the sophistication into the whole system. And of course to bring technology and predictability in the entire system which today's hyperlocal e-commerce is asking for or a consumer is asking for when he's even buying regular things like groceries or taking some services. So today with our panel we're going to look at some great ideas as to what is the future of hyperlocal e-commerce, what are the new trends that are happening over in hyperlocal e-commerce. And going forward, I mean, you know, as I said, we're coming to hyperlocal e-commerce 2.0, it started essentially back in 2014-15 with some players. But do we see it becoming from more regional or do we see it becoming more larger, more pan India, probably even international kind of a business model. And what all spans is it going to sort of extend and encompass into. So, you know, we've got a great panel and I'm going to start with you Sahil, you know, sorry, with Sunil Jain from Stroud Capital. What I would want to first see is given investors' lens to hyperlocal e-commerce and give us an idea about what are the trends as an investor you see emerging in hyperlocal e-commerce both right now in COVID as well as once we are out of COVID. Sure. So, the investment in hyperlocal, you know, started about six, eight months ago. It's just that, you know, this COVID incidence has propelled a lot of activity around the hyperlocal plays along. If you look at some of the few transactions or, you know, collaborations which have happened, Amazon, you know, partnered with more retail has engineered to, you know, spiral their hyperlocal play into the market. You had companies like, you know, Zomato working with, in a collaboration with grofers to, you know, do a pilot around delivery of grocery. Similarly, Swiggy on the food side, you know, had collaborated with a few grocery retailers, you know, to do that grocery under Swiggy, which is now rebranded as Swiggy Jean. So investors have been, I mean, companies have been, you know, collaborating and looking at hyperlocal because, you know, it's really a large market. What has changed in this COVID, during the COVID is that people have realized that one with the lockdown consumers did not want to step out to the grocers themselves or the retailers themselves and at some level, you know, experienced lack of fulfillment from their wholesalers, you know, most of these Kirana stores were actually procuring it from local wholesaler slash wholesale network, which at some level also had been hit. But the brands had production and they didn't have visibility in terms of where to route their inventories into a true hyperlocal, you know, definitely allows for a brand to collaborate with the consumer and collaborate with the neighborhood grocery stores in terms of enabling a true hyperlocal, which allows you to, you know, fulfill and probably take a larger share of the wallet of the consumer. In the process, it also gives a visibility for brands in terms of where the products are selling. So, you know, you've got a bunch of things which have happened in the last few weeks. We've seen Danzo collaborating with Britannia. ITC has collaborated with Domino's Pizza, you know, to sell some of their products through the Domino's Pizza delivery app. We've seen ID Fresh launching something like Find My Store, which essentially gives you a list of stores in your neighborhood, which are supplying the ID products. So I think this has been a great opportunity for companies who had hyperlocal plans always, but they have accelerated their hyperlocal plans in terms of, you know, building that connect with the consumer with the local retailer. And at the same time, you know, these guys already have a bunch of consumers. So they're taking these consumers to these retailers and enabling this entire hyperlocal mix, which gives them a lot of credibility and visibility in terms of where to channel the partners. In terms of investment, I think we had a last wave around 2016-17 from a bunch of investors. We have almost 100 companies were funded across stages during that phase. What went wrong, you know, in hindsight, what probably is, you know, in our view was that a lot of these hyperlocal companies around that 2016-18, you know, viewed this as more as a staffing opportunity without actually analyzing how they would make money out of the entire process. I think two things have happened since then, one digitization in India has further, you know, deeply engaged with the consumers to Lingua has played a big role, which has enabled a lot of deeper penetration into tier two to tier three, tier four tasks. These two coupled with, you know, a lot of companies now understanding that unit economics and supply chain is a critical part for us to make a meaningful collaboration and hyperlocal. So this realization has come through to companies and that is what investors are liking and betting around this time in terms of investing into companies. There have been a flurry of investments in the last six or seven months. I think we continue to see a lot of investor interest in this domain. In fact, you know, a lot of conversation with investors was hit during the code, but one sector where we continue to see a lot of investor interest includes grocery, you know, meat delivery, agri-supply chain, which are all linked to, you know, this entire supply of grocery and I think grocery is a holy grail of retail. And this opportunity provides everyone to figure out a very win-win hyperlocal model to enable grocery fulfillment. So we see a lot of investor interest flipping back into this space in the next one or year. And, you know, I think what companies are doing is also, you know, trying to build channels, trying to build optimization, trying to build digitalization layers within at the back end to enable them to have economics which are conducive to give them a longer run. So we see continued interest in that space. Sure. Thanks for that. Now, before we sort of get into more deep dive into hyperlocal e-commerce, the first question and I think a lot of my audience would also be very interested to know is, how does the economics, you know, economics make sense in micro delivery market? I mean, what are the kind of volume or the orders that one has to sort of fulfill in order to be able to make it a viable model, viable business model or what I say, hyperlocal 2.0. And what is probably the right delivery fees to be touched? I know with Swiggy and Zomato it has been the longest point of debate between restaurants and, you know, the technology players as to what should be the, you know, what could be the right margins, which could be a win-win. So I would love for the panel to sort of take up, maybe Vasudevan, you want to take this up and sort of suggest what could be the right, you know, the business model. I mean, where does it come right at what level? Yeah, yeah. So I think from a Swiggy and Zomato or the hyperlocal player standpoint, I think this category is going to be very different from the restaurant category. Purely from a standpoint, the margins are not going to be the way, you know, we would sort of enjoy in a restaurant vertical, given that the retailer already operates at a lower margin for the fast-moving products. So he would not be really able to shell out the kind of margins the restaurants would be able to share here. And since the margin also is not very, there is no, you know, the scale advantage for a retailer. I mean, the margin fairly remains the same even at the higher volumes for a smaller retailer. So I think that way there's going to be a challenge, but I think the way the delivery companies, the last-minute companies want to offset this to sort of bring in the last-minute optimization where they have a delivery fleet, which is also delivering food, also delivering groceries, and the food business has its own, there are windows during the day where they don't have to get as much as demand as the peak hours. So they're going to leverage, I think, these time windows to deliver some of the groceries, et cetera, and sort of find optimization from a cost standpoint. I think that's where, I think it's going to look more complimenting their food delivery fleet and sort of try and make and improve the cost structures. I think that's where it's going to, I mean, the way I see it, it will evolve. Maybe the company is going to try out multiple models like either a 50-minute delivery or they would sort of go to a slaughter delivery saying that, you know what, hey, you have available deliveries in these particular slots, which slot you want to pick up, which could be the next hour or in two hours from now, et cetera. So I think that optimization would come in, I think before we get there, I think the company should sort of try out multiple models to see which works for them, both from a cost standpoint, the consumer, what works for the consumer, cost for them and also for what works for the retailer. So I think we're going to see that evolve over the next, I think a few weeks and a few months and sort of finally we'll have a model where it works of, like you said, it has to be win-win for the retailer and the delivery partner and the consumer. But what is a sweet spot, let's say, I mean, you know, so as a hyper-local e-commerce player, what typically is a sweet spot? Where do you say that, okay, this is where at least, you know, we are cash break even? So frankly, I mean, I don't know, view on the cost structures of the delivery company. I mean volumes, I just want to get a sense of like what could be good volumes and I mean, you know, so basically the unit cycle of the business. Okay, not really, I mean frankly, I don't know, visibility on their business, but I think a good order, I mean, from a rider's standpoint, I think if you're able to deliver about, I'm just taking a guess, right, like I mean, there are 5 to 10 orders a day, grocery orders. I think that would be a good optimization from a driver utilization standpoint, the rider utilization standpoint. I think that would be a good number to start with, but I think some of these companies would be in a better position to sort of save from a customer mix, how it really turns out with them. Sure. So Srinni, let me come to you. And I know PDM has announced about, you know, partnership with about 10,000 stores that you're going to sort of partner with for hyperlocal deliveries and you're sort of working very closely with the Kirana stores on this. So, you know, going forward and you're looking to also touch about 100 sort of more cities in the country in the next few weeks. Now, given all of this, and particularly now that you're working with Kirana now, how are you making sure that the Kirana was also sort of equally invested in the same model as you are, you know, they also have the same sort of goals and service experience to the customer which the customer is looking at. And, you know, you have similar goals. I mean, eventually, you know, obviously we know that small business owners can sometimes become very stingy about things. So how are you sort of managed to going to sort of bring this entire gap together or bridge the gap together? So I think we've touched upon the first aspect for any retailer is consumer demand. They are looking at because when you look at a hyperlocal setup, you're looking at the radius of five kilometers. It makes sense even for a retailer to even be interested is to start giving that much consumer demand. So I'm just giving you a requirement of a retailer, what does he look at, you know, to bridge that gap. So first is the consumer demand. The next thing is definitely I think a lot of our panelists have touched upon is the fulfillment aspect because today consumers are already coming to the retailer. There is no pain, you know, that retail is experiencing. It is just that now because of this current situation and let's say even after COVID also fulfillment will become a challenge because if I was delivering, let's say in a particular sector, which is half a kilometer or kilometer, my efficiency can improve if I'm able to deliver within five kilometers or three kilometers. So fulfillment becomes another important aspect to it. So fulfillment, consumer demand are very, very critical to start with. Then comes the angle of, you know, we were talking about profitability and the SKU types. So many retailers also have a challenge to understand how to even keep what kind of SKUs in my store. I think that that's also we kind of started seeing in a very small pilot. So let's say to deliver a Maggie packet will always be expensive even if you charge a delivery charge or even just delivering a 2 kg Arta packet will also be, you know, expensive. What if we can bundle and say that can I deliver Arta, travel and oil together? Now, can we recommend these combinations to the retailer? Is the another aspiration for a retailer that to increase his margin also? And by the way, we also will not incur loss as a basket size. So idea is to kind of increase the basket size for a retailer is the third element that we kind of bring in. The next thing is cataloging inventory management and payments. These are the other aspects for a retailer that we have seen, which I think we are, you know, as a platform are equipped to kind of solve. These would at least bridge the aspirations of the retailer to what as companies that we are kind of looking at to improve profitability across all the value chain, across the value chain on all these aspects is what I would say is an important point. Sure. So at your level, I mean, at a Paytm's level, do you feel that it's this space is also going to become intensely competitive with Geo also coming up with Geo Mart and the recent tie up with Facebook? And, you know, a lot of players also are trying to help digitization of Kiranas in the market. Do you think that the place is going to become very, very competitive and sort of the market share is going to get distributed amongst a lot of players? I think the market is very, very large. If you look at even grocery, right, and I might be plus and minus here and there, it's hardly 0.5% to even less than 1% penetration even in the grocery site. The market is very huge. Right. Let it be players like Geo or anybody, right. We, you know, you need to understand that we need more and more players to invest lots of money to digitize is a very important requirement for anybody to survive. Right. I think that's very, very important for everybody to kind of do. So more players will help digitize the retailer much more faster is a very positive step that we see so that, you know, we can build a lot of newer models that kind of coming in. Because earlier like grocery 1.0, a lot of startups have come in between 2013 and 16. I was just discussing with you. The problem was unit economics were not sorted out. Logistics was not sorted out. People thought, you know, it would be easy and a lot of startups went bust. I'm even talking about like $3 million, $10 million startups because space is so huge. It's not so simple that we think of, right. Now that has changed now because swiggies, tomatoes, food deliveries, companies, service companies like urban, urban company, e-commerce companies like us are solving a lot of problems across different value chains, including logistics companies, right. For example, it could be a Ninja cart as a company to solve problems for a grocery, Shadow Facts, Dunzo, all of those. So a lot of newer things have solved a lot of those problems right now. So I would say for us, it's a very exciting time that a lot of digitization is happening. And it's more about execution and also becoming intelligent in terms of specific focus areas becoming sharp in what it is, rather than looking at it as a very large kind of thing. So to give you examples today, when PTM started off right now in the grocery thing to answer your question, we tied up with Rapido and Dunzo. Rapido is a bike company. Now who would imagine that bike company would tie up with us or Ola or Zomato. So I think a lot of these interesting integrations are happening right now to kind of do. So it's a very, very, I would say, collaborative space at this time rather than looking at purely competition and taking away market share. You're not even there, Ritu, to even talk about that. Okay, too early right now. Okay, I'll come to you again, Srini on another aspect. But before that, I am going to go to Sahil. So Sahil, you know, as a logistics aggregation platform, how do you think, and I mean, Srini has touched upon it. How do you think more such collaborations are going to happen? You know, what we talked about Dunzo and Rapido, and probably, you know, you've done something with Shadowfax also and Dunzo also. How do you feel that these, I mean, the logistics and the e-commerce side are going to get more or better integration in the coming times? Yeah. Hi, this is Gautam. I am representing Sahil is not there today. Sorry about that. So I totally agree with Srini. We touched upon it earlier in our preliminary discussion also. I think the value is really when different formats of hyper local businesses or businesses which are not hyper local also earlier coming together onto one platform, one ecosystem and building this large ecosystem altogether. I believe that offline retail will also offline retail of goods, which are, you know, even goods, which are, if I want to buy baby products, which are fashion baby products or electronics that I need to buy from a store near my house, or other things. Those will also my regular needs can be fulfilled by the same ecosystem, which is supporting the grocery and the restaurant business. So that's what I think that's really valuable. And I think that's where the value is going to really come together. Having different players. I think there are different players in the market today where you have the courier or the logistics companies are functioning in larger different models. Some are working on slotted models. Some are working on dedicated models where they have a fixed location to pick from and they are only delivering onto a particular location. And these people only work for them at a particular time. And they are not utilized for other times when the, when says I will go see deliveries happen in the morning and the evening and during the day they're free. And they're not going and working with Zomato when afternoon and in the evening the other businesses are, or national business orders are really high. So very different right now the, even though the ecosystem is coming together, I think they are at a stage where it's still broken. So everybody wants dedicated workforce because they want to deliver a promise. And at the same time they are the people who are now pressed with cost and where it will help is having two different players coming together and saying that okay fine. Can I be milk basket in the morning and be restaurant deliveries in the afternoon and be grocery deliveries in the evening and then delivery at night so that my margins are really well spread out. And my utilization of resources is the highest because that's the real cost really. And this cost is only going to go higher. A gig economy is going to come under state level minimum salary brackets etc. These people will be given commissions to give better services. All that will keep changing right and something also which is very happening is the distance that these hyper local companies are okay running towards. Hyper local for a grocery thing it's not more than one kilometer. They don't deliver more than one kilometer. A medicine shop does not deliver more than one kilometer. This gives them the opportunity to now get into a customer base which is five kilometers, 10 kilometers also. And some partners are doing 10 to 15 kilometers. So example Danzo is okay doing 10 kilometers. There are people like Lala move and we fast. These are smaller still but they're okay doing 15 to 20 kilometers also. So you gave a very good point about a very small medicine shop. Let's say serving the radius of five kilometers and beyond which it cannot but as a player as a logistics player do you see serving his market which is of one kilometer. You see an opportunity there. Absolutely absolutely I think I think there is I think that it's really the question of demand and supply of people. So as long as I know a medicine shop will deliver if they have people right they try and give a fantastic service to their consumers the way they wanted. Though you keep calling them and they said they'll reach in 15 minutes and they will come in 45 minutes. But again you know the guy you will call him and the friction is far lower. But what is going to happen is that the demand will become more important that all these platforms all these market places will bring demand for them. Today they bring demand for larger companies like there's a Lamash which is in Delhi and Gurgaon. Those are larger grocery stores and those are organized guys maybe 4% of the world total grocery market or 3% of the grocery market. But really the value is in the small shop which are not digitized as Srinivas was telling there. How do you how do you bring them on the same platform? Sigi does not support those guys to sell those goods right. It's only when those people will come on those platforms they will see the e-commerce demand. The demand of Sigi bringing them in order. They have not experienced that and that will not happen until the digitization happens. We have tried for a lot of actually installed POSs, PNG installed POSs, GEO did something around installing inventory. All that is a lot of friction for them. I think there is something which is new which has come out of this is conversation commerce. I don't know I can just and this is probably hypothesis like GEO partners with WhatsApp. They create an API where they can do a conversation and you don't need inventory. You just post what do you want and the Kirana store basically responds that he has 10 products out of the 12 products that you were trying to order. And he said, okay, yes please ship it. Now he pays the money through GEO pay and without inventory without cataloging you have the Kirana store shipping the order and grab is something which is partnered with GEO and grab delivers the words. So there's a lot of like six or seven people integrating in the entire ecosystem. I'm just saying that maybe it's just leaf frogs beyond cataloging inventory because that's primary very important. I don't know. I'm just thinking about. Okay, I'll come back to you once again. Let me go to Mukund. Mukund, are you there? So, you know, my question to you is why, you know, right now what we've talked about is mostly related to food and it's mostly related to grocery. But you know, you manage another side which is very interesting that is of services. And I mean, you know, I know before urban company when it's a time when you were urban clap you had far more range of services. But today you sort of become more concentrated on services and I'm sure post COVID you will also find that there are certain services which are high in demand like sanitation. Or probably, you know, some such services which did not exist earlier. Now, how are you getting ready for that? And I mean, you know, how was your business model going to be enabled to service that those services to the customer? Sure, I think. Firstly, I think we've always tried to be hyper local. So I think the model was not very different before as well, which is we always used to onboard people locally. The only thing we used to add on top of it was pretty pretty stringent training as well as help with product procurement because many of them may not have access to products. So those are the two things we were doing on top. And I think that will become more important right now just as a simple example. In the last four days we have shipped 12,000 personal protective equipment to all our partners. And I think just buying any of this offline is going to become fairly challenging for many people at this point of time. So just to get our plumber's electricians and all our sanitization people back up and running. We've been able to kind of do a lot of changes and very, very quickly react to some of these things. In fact, we've been working with startups like Mogulix and Bizongo to help us do this. So I think many of them are also coming up and seeing how to make supply chains work in this context. So to answer your question, I think we'll stick to the same strategy. And as you rightly said, for things like sanitation, which we have recently launched, we are very aggressively bringing on board people with already these capabilities. I don't think in this new world we can do classroom trainings and onboarding. So one, we have significantly moved our training online. People are actually their virtual classrooms now where all our professionals are getting trained and we are onboarding digitally. That's I think the key change we have done. So we have not changed our strategy of standardization or keeping tight control on quality. Just that we have moved, I think we were forced and now I think we feel digital might even be better than offline. We realized in training. So in the last one week, we've managed to quickly launch an app for all our partners to get trained online. And so those are the things we're doing. And as you rightly said, we're bringing on board a lot of people to fill up these new niches. So we are onboarding at full rapid pace as we speak. So this was a practice in offline retail that we had noticed and I also run a retailer magazine. So I've been sort of following the entire retail industry very closely for so many years. Was that when they were opening food and grocery stores, eventually they started going into private labels, wherein they had their own products because there were obviously better margins on those products. Do you see an opportunity at the urban company for your own sanitation products or probably at some point of time your own brand, right now you're an aggregator, but in your own brand which could then be selling its services at let's say the platform? I mean it's obvious opportunity here. I mean many salons in fact 30% of their revenue sometimes comes from products. So we are not oblivious to that and I think at the right time we will do it. I mean I don't think many people know this. We almost ship fairly reasonable number of quantity of products every month to our partners on the B2B side already for all our 30,000 partners and some of the products already are developed just for us. So these might be things we've worked with man company to develop something or torture for us. So I think we also want to be smart about saying we don't know how to do everything. So let's also be smart to work with the right folks to learn and use their capability. So I think we have been partnering and building specific products for us because for instance when you're at home you need mono doses. You can't have a big bottle of a conditioner when you go to someone's house. The user would prefer that it's use and throw especially in the new COVID scenario nobody wants to use the same product in multiple instances. So everything needs to be mono dose so that it's very safe and also the user knows that the product is the correct product and the quantity is correct. So we've worked with a lot of brands to make some of these things for us and I think the right time some of these things like disposables are already made only for us and I think at the right time we may try a few but we are also cautious that there are expertise needed to make any of these things. So we would rather partner with a lot of brands rather than do things on our own at this point in time. Sure. Srinni, Vasudevan, would you have some views on this as to how private labels might emerge at your own stables going forward? Let me start with Srinni. Yeah, I think traditionally also if you look at it while we now call it private labels traditionally in typical stores also, we are used to just people walking into a store and buying sugar, dal, atta chawal without any brand name actually. If you actually look at the staples and I think that's what is happening now if you look at players like big bazaar or grovers or a big basket like everybody are coming up with their own label now and I think that's what does also happen in a typical retail store and I think it will emerge a lot. Certain categories I think there is element of trust for it's to do with skin, personal care. There you don't want to experiment a lot but when it comes to food like ghee, oil or let's say atta dal, chawal and all of these I think you don't really remember brand except for Ashirvath and some of these which do come in the urban phenomena but still private labels is where the margin is. I think that will keep emerging a lot and already we are seeing that that's what is happening today when we order also. Sure. Vasudevan? Yeah, I think a lot of the retailers, I mean the small term retailers I mean like I think she must say they already run the private label in a sense where they just buy bulk and then like you know in a sack and then they just pack it and give it. I think that will happen but I think with iPhone coming in people would want to know what brand they are ordering and then what sort of because just to ensure that there's a quality. So I think a lot of these would move to a lot more branded play at least the familiar brands that people can trust because when you go to the shop I could see the product and buy but vis-a-vis when I order online I would rather prefer to stick to a familiar brand that I know. So it's going to be, I think it's going to be consumers going to move towards a lot more brands than buy something at a very loose one. And I'm sure a lot of new players would come and probably operate on the hyperlocal supply having a dark stores just catering to the hyperlocal play and we will see players coming into that space as well. So that's how I see things from a consumer standpoint. Sunil, you know we've already seen a play in food delivery we've already seen a play in food and grocery medicines which were always sort of prior to pre-COVID they were always off and on with the government regulations also have sort of jumped into it. Services of course as urban companies are already doing it. Now what other categories do you feel hyperlocal we might see in the coming times? So Ritu these are some of the obvious categories in terms of where we've already seen some hyperlocal. I think a few like services, if you look at services I mean urban company has a lot of beauty services but you could probably see a lot of healthcare which can get into home. What has happened in the COVID and which is not largely being highlighted largely is that a lot of patients while they've been able to access the hospitals the hospitals are turning them away because they're saying please go get a COVID negative test which has led to a realization that can we insource this at our homes? So I've seen a lot of diagnostic lab companies who are sending personnel to their home to pick the blood samples to get the tests done companies like Portia who are actually providing care at home. So this is healthcare services is another area which I think we'll see a lot of propelled demand post this episode. Given largely what has happened to companies the other area where potentially we could see people moving towards home is in the category of which is also alternative medicine when it's the entire Aayush segment which is alternative to the core medicine where we are actually looking at companies where enquiries, orders, deliveries have gone up like 2x over the last 30-40 days. Again related to healthcare but these are areas where we see a lot of demand. And just to, on your previous question there's just one view which I would like to share which is regarding whether private label would be is something which companies. So if you look at Dominos, they do 1.6 deliveries per hour in the U.S. and they ace the 30-minute model they cracked that. It will be very difficult for someone to beat that in India and maybe companies will get there and if you do the entire back rounded whatever you do you will end up at a 40-50 rupees delivery cost and which like Gautam mentioned will always go up given that there will be minimum wages and stuff like that. So far in a true hyper local it will become imperative for these companies to have private label products at the back end which they will power these stores with and that will give them the margins to then optimize their delivery costs. I mean they can only optimize their delivery costs to a certain extent but the margins from having private labels is the one which will bring out overall unit economics for these companies. So I think it is going to become imperative for companies to think of full stack, think of having a few categories which will become private labels for them given services. Sure. Sorry I took you back a little bit but yeah. No that's fine. In fact please jump in wherever you want to make a point. So we are quite open to that. So I also see you know we've got about 107 participants right now and we've got about 30 questions coming so I think let's also involve some of our audience over here. So I think there's a question from Amit Gupta. Can we pass on the questions to Amit Gupta please? Chirag can you give him the audio? Okay till Amit comes on the line I have another question which is about contactless delivery. Now you know while we're talking about social distancing and we're talking about what could be the future of delivery now contactless delivery while you know it sounds just the right thing to do in times like this but it has its own cost. Now how do you sort of as an operators how do you see you know how do you how is it a pain for you? I mean you know what is it and particularly for you everything you do everything you do is contact based. So in contact delivery times what are the extra costs that you have to bear and who's going to bear the burden of those costs? Yeah let me start on that. I think I mean first the sum of it is crystal balling there. I think the truth is this is not a one month, two month pandemic. This is I think going to last for a while unfortunately or fortunately. So we are looking at it as how do you solve for a longer period of time and not just something short term. I think it's kind of and put a lot more elaborate kind of systems around it. So one is CPE of course it is an obvious like gloves masks all of this will become standard for all our partners. Second we are also doing temperature checks. That's where tech tech becomes a big like so today right before every job in fact we're doing a temperature check and all of these checks on partners to make sure they are comfortable. We are also then having telemedicine support for all our partners. If you are saying you have certain symptoms we immediately connecting our partners with doctors with this through our insurance cover to make sure that we quickly check if there is something wrong because the only thing we can do is be very very proactive under the day testing capability is still limited and so we can't test at exhaustive levels at this point in time and hopefully that will come through at some point in time. So we are taking all preventive actions which we know can be done and we are also taking disclosures from the user saying at their home they are safe because also it's a safe not just that the partner is safe so all of those protocols I think we put in place we will learn a lot I think these are just first one person of things we may need to do I think there will be a lot of learning in the next month or two on cost we are I think some of it will be borne by the user that's the truth I think there is no way to subsidize many of it so we are thinking of adding a small fee at the right point in time saying the safety kit fee or one of that it will be a very small number a few tens so that some of these can be supported because the PPE is in all we want to make sure it's a single use we don't want to create more trouble so we are putting in a lot of checks to make some of these things happen and some of these costs will be shared between all the three players which is the user urban company and the partner. Sure Gautam what is your views on this so as a logistics provider how are you going to sort of see the cost of contact less doesn't sort of mar your economics The cost does not I understand the cost is a big factor when it comes to PPE products because I think sanitization of hubs and PPE for delivery boys etc is a big cost this is largely on the KORE company or our partner side right now what we have seen in the market is that all of them have in their agreement companies like Luda and FedEx have kind of brought a new charge they are not specifically for PPE but because of their margin slipping away and overall the market I think is in a larger turmoil because the demand is not much in the market today the demand is not so high though they have problems so they have term in their contract they are all increasing their cost by 20% so they have done that at least the traditional listed players or companies like Luda and FedEx have done it the new companies have not done it yet but I am sure they will come under a lot of cost pressure these are things which will obviously bring some cost maybe not very very high but it will be a cost on every individual if they want to wear gloves mask is easy mask is cheaper and I am sure there are masks which are washable and can be used and they are single use masks and it will eventually come to that and everybody will have a mask as an individual will carry a mask and it is my own safety than a company providing me a safety but other things like in the hub or in the rotation centers there will be some cost of sanitization I think testing is not a big cost but I think PPE is the only cost which is primarily will be important and I will see individuals take it up or the company take it up I think our behavior will change for the next one year atleast for sure and if not more okay I see Amit Gupta is already there can we give the audio to Amit please hello yes ma'am actually my question was that the feedback and reviews nowadays people who go on purchasing watch a lot of reviews how to manage these reviews because what happens is when a person gives reviews when he is angry when he is unsatisfied when he is unsatisfied then he gives reviews so how to manage reviews so I can jump in there Amit I think there are companies which have figured out how to get customer reviews I mean if you look at in the mobility category Uber, Ola probably almost force you to put that screen up to give you a rating for the trip before you pick the next trip similarly in Swiggy and Zomato you have similar options Eat Fit sorry Cult which is running these online classes before you do the next session you typically get these screens so I think people have figured that out with the onset of smartphones in terms of how to get reviews even from customers who are satisfied I'll just add something to that what Sunil said what do you have to look at to see where the customer is satisfied so right after purchases or when you know the customer is happy it's the right time to capture positive feedback your right customer will give you negative feedback but it's very important to capture positive feedback when you know it's a positive customer so make sure that you send out communications and you take reviews from the customer and maybe you can motivate them by giving them a small cash bag or something which they will bring back and they will order more from you etc sure thanks Amit, Rohan Varma is next can we pass on the audio to Rohan please hello, am I audible? yes so my question is regarding the food delivery so before the pandemic we saw they said they are doing really well and I actually run a hyper local shared cloud kitchen like a co-working kitchen based out of Gurgaon so we learnt that the partners are not making any net profit because of high commission and forced discounts and now because of the pandemic BC orders are also declining so what happens to so much investment in this space and food delivery in general who would like to take this? Sunil? so I am doing some work with the company in that space right now so I think the FNB find time is going to take some time to hit back it's going to be the most effective sector people are going to resist going out once lockdown opens home deliveries or food delivery from restaurants is something which will continue may not be to the same extent as it was earlier but that's one of the sectors which will pick up very quickly for players like you who offer infrastructure services I think there are companies who are now looking at options of having multiple brands under the same kitchen and like someone had mentioned earlier you need to figure out how you can utilize that infrastructure across the day you will probably have to tie up with brands who can do breakfast lunch, delivery and probably fit and snacking so that's the only way you can utilize your resources and try to optimize your costs by having multiple brands in the same kitchen our next question comes from Vijay Agarwal can we pass on the audio to Vijay please hello we can hear you Vijay so I have two questions one for I think Vasudevan would be able to answer so when do we see things restoring back to normal as in at least not for the entire day maybe every day if you ask the shops being open on a realistic picture when do we really see maybe next three months because even today groceries are not allowed to open every day where I stay they are opening every alternate days maybe for few hours and that too they are out of stock as it is they don't get any business if somebody is paying rentals it will be very costly for them to operate on a day to day basis yeah so I think one can only speculate there I mean I don't think so even I am looking at the answer for the same normal I think the only thing we could do is prepare for the worst and hope the best happens from all standpoint but I think as we speak state governments have started relaxing in a very selective way they are opening up stores for few hours just to ensure the commerce kicks in and the consumers are able to purchase what they want to purchase so I think it is going to take at least to really get a clarity of what sort of models would work for us I think like Mukud was saying before I think it is not going to the entire pandemic is not going to be another couple of weeks I mean it is going to take some more time before we really get the pandemic out it could be months or it could be more than that so I think we will have to figure it out I don't think anyone has answers in terms of when this is going to get over it is all about how well we can prepare ourselves and then come with new processes and models that could sort of work in this new world so that is what we are looking at I think from Ninjaka's standpoint how we are approaching it No so I mean you know just to add to what Vijay asked I mean I understand that you know obviously grocery stores even while they are supplying essentials they still have rentals to meet and they obviously within the frame of 4 to 5 hours they are not able to sort of fulfil enough to meet their own costs to meet the right level so do you think they can up it I mean for example if it is a window of just 11 to 5 that they are doing it what part of the business can come from on-store sales and what part of the business can come from hyperlocal deliveries so I mean just thinking loud yeah so I think from a category standpoint I don't think so there is going to be a difference between you know the physical purchase, delivery, online sales delivery is going to take off especially I think categories like fresh vegetables and fruits, dairy, breakfast items home care, personal care we will see a lot more you know movement in the hyperlocal play because that is going to be a lot more impulse and then top of purchase so I think retailers are figuring it out I mean I am sure like retailers are renegotiating rents with their landlords for these months to sort of see you know whether they could reduce a issue to the future and things like that so I am sure like retailers are figuring it out how to operate and having said that I think a lot of retailers are operational I think except for the cities where there have been time based restrictions let's say for example in Bangalore I mean we have seen retailers operating from morning till evening and then they have customers coming in plus also online deliveries happening I mean retailers delivering on their own because their customers have their numbers and ordering it and then the people are figuring it out I mean I don't know there is one answer for this but I am sure there is going to be retailers who are facing challenges but I mean like it is going to be they want to figure it out at their own levels sure Deepak Varma is next, is he online yes I am here okay we can hear you thanks to you and thanks for all the panelists for the wonderful selections and recommendations I have two questions first question is like the grossest play on low margins by low margins ranging from 10 to 15% on most of the products that they sell so how do we manage the delivery cost, the die ups and other logistic costs you know when reaching out to the Kirana stores and importantly the traditional Kirana stores are may not be very much willing to work on apps or text for their order management because you know they would want a very fast rotation of the orders they don't have that much of time to look at the app and text not everyone at the store level also so how do you suggest that we should be solving this problem second question is how what do you suggest that how can we improve the customer experience and how to ensure faster deliveries to be ahead of the competition during these times because it is very much important like most of you are mentioned that 15 minute delivery or 30 minute delivery dominoes are correct 30 minute idea so for the Kirana deliveries or essential deliveries what do you suggest would be the best way to be ahead of the competition Shrini would you like to take that up sure so I think let me take the first question and within the first question the first part I think the question was how do we kind of recover the logistics cost and you know how do we kind of cover that there are two ways to look at it obviously one is also the SKU type higher margin products bundling combinations of those will definitely improve margins there on that front on a supply front two is obviously customer has to pay a convenience fee when you are delivering something which is faster and closer closer to it so it does not hit on the retailer as well as the company I think those are the two aspects that I would say kind of coming and there are different models that that can you know emerge on this on the on the second part I think I just want to kind of redo what was the question I think on the second part was I think to do with how to be more competitive in terms of time so about 10 minutes 15 minutes so how do you so obviously the guy who's able to deliver the fastest and the best way is it going to so I think in that way the way to look at is not every product is also needed very immediately certain products are needed faster than every other product let's say to do with milk or certain what do you call it regularized products need much more faster and you know they have a shelf life and everything like meat and all of those certain products people can wait and that is how you can slot it between delivery time so let's say I could wait for a delivery for an oil or an other let's say by evening that's okay for me but let's say milk or something meat or other things are needed much more early for me like 15 20 minutes that again is where you know you could kind of evolve models and you know stay competitive that way because not everything is promised or delivered in 15 to 30 minutes is not possible at all so I would say that's how you kind of need to look at sure so we have another question from Sivang Gupta can we pass on the microphone please we can hear you Sivang my question too was a given sir sir like can you please tell me like how Ninja Kart is doing in this stuff and how we are onboarding retailers like very retailers are like they are not working entire day so how we are onboarding them so I think that's a challenge I think onboarding new retailers is a challenge now what you've done is at city levels we have you know rolled out you know helpline numbers for retailers if someone wants to you know get onboarded and then behave one and also there is a lot of word of mouth between the retailers I mean if I'm a retailer I know this other retailer was buying from Ninja Kart I sort of checked with them the details of our managers and the sales associates and they sort of reach out to our sales associates and then we get onboarded them and onboarding can be done virtually we send them the app and then they install and then we guide them how to get onboarded so that was currently happening the movement is restricted I mean our sales folks are not you know as much as they've traveled before in the lockdown so mostly we are planning that way and since when pre-COVID we are predominantly at least onboarded most of the retailers in the city so we are using those data to sort of you know reactivate them and we have inbound numbers where retailers calling us to get onboard activated so that's how we are managing at this point from a demand standpoint sure Anish is next, Anish Kumar yeah hi we can hear you okay so hi this is Anish I'm a we are actually a team of researchers from Plymouth University UK and IIT Roorkee so we're working on a project for resiliency in food supply chain I wanted to ask how does hyperlocal model affect the resiliency and survivability of food supply chains during this COVID pandemic who are you asking it to any of the panelists may answer this ninja card would be better if yeah so the way I understand is I mean see there is I mean the current times there are challenges from our operations standpoint right I mean there is a restriction on the vehicle movement there is a restriction on the employees movement I mean to the veros etc and there is a challenge on the farmers side not from harvesting but from availability of labour for harvesting etc and most importantly I mean what you've seen as a trend at least few weeks I mean like in the initial few weeks is the farmers have stopped showing new crops because they have a lot of uncertainty around the marketability and then who's going to buy etc then then we have to sort of work closely with the farmer partners to sort of assure them to sort of start I mean like showing new crops so that there is availability at least two months from now so those are I mean those things had a disruption in the first few weeks I mean like first week especially and then post that I think each stakeholders have figured out how to operate in this concern environment I mean government played a big role in terms of policies you know regulating some of these things so I think I think each folks will figure it out I think farmers will figure it out how to you know get back to farming and start putting in new crops and harvesting and then like no supply chain partners will figure it out I don't think so there is going to be a big disruption in terms of on the supply chain front for the first produce of the food supply chain I think things are already back in places at a very structural level so I think it's going to get improved I think what's going to change is you know how we operate with these constraints and then people would look at some of the uncertain elements in the supply chains I mean would sort of go down and we will try and invest or you know prefer more and more of certain elements in the supply chains that's how we see the trend emerging. Sure so we will not take more questions just of time but you know before we wrap up I would like to ask this one final question that you know as I said in the beginning there are a lot of local players who are emerging in this you know local hyper-local startups and you know trying to address very small regions do we see more consolidation happening in the industry post-COVID where in you know somebody who's let's say built a capability in Chandigarh or somebody who's built it in Coimbatore and bigger players like let's say PDM mall or even Ninja cart who want to collaborate with them and look at an inorganic growth in that particular city or region do we see that forthcoming let me ask start with Shrinni on this Yes Riddhu I think that's already started off I think even pre-COVID as well but I think now COVID time has accelerated to really identify complementing strengths between two companies what they can do specific areas again it might not be a takeover or it might not be investment in a larger could be leading to investment but complementing strengths and actually tying up with those it could be let's say utilizing the inventory of bikes or inventory of cars could be an example right to kind from a logistics point of view or it could be somebody would have solved a supply problem where the cataloging has been done for a retailer and everything or third somebody would have solved a payment problem let's say in a case of Paytm I can talk that QR codes are already in the Kirana store so I don't need to solve a payments problem so I think each of them have solved certain areas because it's a very very large gamut we will see acceleration happening a lot for sure and I think more proactive collaborations will happen Sure what about you Vasudevan what do you think about this So I think some of these players I think would start replacing some of the elements in the supply chain I think any supply chain that involves too many people to sort of come together to deliver a service I mean it sort of creates more uncertainty or it takes away the margin in a larger sense at a very fundamental level So I am sure I mean as we said as we are collaborating coming together to sort of put this service together but I think in the long term I am sure you know the last the last many companies like let's say Sugi and Zomato and so we would look at building some of these capabilities themselves because they own the customer on the front end level So we will see people building complementary capabilities in house because that improves a margin structure also brings a lot more strong customer experience and certainty in the entire process but I think for now I think the chance of building that is limited so I mean we have a partner but I think in the months to come each companies will figure out what they could build and what they could partner with so that's how I see but the number of players offering at a consumer level would surely consolidate maybe it could come down to about 3-4 players though the market is huge I think the people with the cost efficiency will win in the long term on the last mail front that's going to be the expensive piece from a short time point So we will see consolidation in the last mail piece Sure, Sunil what is your Mr. Lenz's say? So I mean what we are seeing is that there will be consolidation there will be large regional slash national players emerging where we see a lot of consolidation happening is integration backwards into the supply chain by a lot of these players who own the customers on the front end driven largely by creating positive unit economics for the business So that's an area where we see a lot of consolidation happening Sure I think there is somebody who is pinging me about this one question he has which is how do you engage retailers gross especially in the traditional Kirana stores for order management when they may not be interested in looking at the app text for orders so I mean you know it's essentially about breaking the mindset of a traditional small business player So Srinni maybe you want to talk about this it's from Deepak Varma I think there is no straight answer to that like I said somebody might be comfortable with apps I think everybody has a feature phone which has some kind of internet connectivity today I think that that's been solved right now so I might not call it an app but kind of a messaging functionality or you've seen things like you know Kata book kind of things kind of coming in right now what we've seen also is an example of Paytm has this Paytm for business apps where people can even type those I think people are comfortable to an extent because connectivity internet issues have been solved not everybody are like that but again it's an upgradation staggered kind of learning that will happen which should solve this for me Sure So go on Vasu please go ahead Just to add to that I think this was a major challenge when we did also did a B2C hyperlocal in 2015-16 times I think getting the retailer interested and invested in this whole model because he's always going to treat it secondary in terms of getting the inventory updated giving priority service to online orders etc but I think with the current situation I think that's going to change because the retailer is going to look at this as a significant channel of demand so that mindset shift alone would sort of propel him to prioritize the online channel in terms of getting the inventory updated ensuring catalog is right, pricing is right the experience is right but having said that I think that's going to be super important for the same type model to succeed I think if the retailers don't come in proactively and participate embrace technology I think that's going to frustrate the front end companies because that's going to take a hit on the customer experience right so I think the retailers will catch up to this because they will sort of know that this is the only way to sort of move forward I think adding to what Vasu said the survivability of the retailers they have to learn and adapt also right that's how it will happen retailers also will have to adapt to survive on this digital age I think that will also start happening Mukund I think we left when it came to merger and acquisitions and consolidations so I would love to hear what you have to say in the services area I mean cash is king right now I mean I'll be honest to say we will not look at anything in organic at this point in time we will preserve, try doing as many partnerships as possible too much uncertainty honestly speaking we will let it play out for some time because you never say never but there's too much uncertainty for the next two quarters to take a longer term view on anything right now so I think it will start with formal contracts and partnerships and I think they may evolve over a period of time in our case but not anything active at this point in time sure so thank you very much for this discussion I think some great points that came out of it of course Kiranas would be digitized going forward and a lot of hyper local players so the opportunity for Kiranas is to go a little big in terms of the radius that they are trying to address while for of course the hyper local e-commerce players it would be a great opportunity to not just meet the smaller radius of delivery but also to meet the larger radius of delivery and service it through the local buyer and seller of course there is more consolidation on board the bigger opportunities for bigger players would also lie in creating private labels and their own products and own brands which might be more margin heavy in the future we also see some great new sectors coming up as Sunil pointed out particularly in the health services space which may see more hyper local intentions coming into it and therefore more startups and ideas cropping up over there and finally I think there might be a lot of tie-ups and collaborations that will happen in order to create a bigger force Sunil a parting point do you see the market getting divided into smaller startups or one larger you know apete and more or a geomart which would be probably be taking the lion's share of the market in the short term I think there will be multiple players who will try to enter the space and try to optimize but in a longer range I think there will be conservation and and you know we will probably have it to then players pan India sure so I mean to that thank you very much once again for joining us here today thank you very much to all the panelists for sharing some great inputs over here over to you Pratima thank you sure thank you all the panelists thank you to it has been a very good discussion moving on to our next panel for the day this panel will be for about 50 minutes followed by Q&A for about 10 minutes I would request all the attendees to keep having the questions coming while we may not be able to take all the questions but we try getting them answered later on as well our next session is on demand delivery the logistics of hyper local best practices for building partnership with merchants and delivery agencies we have with us on this panel Mr. Prashant Mehta, partner Lightbox, Abhishek Bansal co-founder and CEO Shadow Fox Chakradhar Gade, co-founder Country Delight and Kapal Makhija CEO Unicom Unicom Solutions our moderator for this session is Punita Sabarwal Kapoor Deputy Editor Entrepreneur Media over to you Punita thank you Pratima for the kind introduction so it was an interesting session prior to this and now we are getting into the second part of the discussion which is about the logistics of hyper local best practices for building partnership with merchants and delivery agencies so hyper local delivery has unlocked a new dimension of convenience and safety for consumers as well as earnings for delivery partners during these extraordinary times as this category continues to scale up with the goal of providing a better solution we will start with the investor in the panel Prashant with you Prashant we saw a bunch of startups which had launched ventures previously to ride the boom and subsequently raised venture capital those models however failed due to poor unit economics so this time around do you think it's going to look better as an investor what's your take on this yeah I think maybe we dive into this just take a minute to to get a sense of the lay of the land you know we've invested in several companies that cross the chasm between hyper local delivery supply chain and food and groceries from rebel foods we cool and Denzo and so we've gained a very unique perspective of what's happening during this time and on one hand well this is a crisis of a lifetime we're also seeing an opportunity of a lifetime I think this is an opportunity for us to rewrite our businesses Prashant your voice is not clear what we're seeing is that we're shut down now let me just turn off video maybe that'll help is this any better yeah okay we'll go with this then so we noticed that during the force to six week period we experienced everything from warehouses being shut down to employees not being able to get there and six weeks forward we're actually seeing most of our operations get online between 40 and 100% so I think one of the things that we're learning about this is that while there was a crisis and there will continue to be a crisis for some time to come there's a big opportunity for us to rethink how we operate our businesses to rethink business models that can allow us to deliver our services at better your economics and we can go through that as we go through the discussion we're seeing improvement on business economics across the board you know four to six weeks later and we can go into that we're also seeing that it's an opportunity to recognize some both short term and permanent changes in consumer behavior which we had never predicted before and we're taking advantage of some of the changes in this behavior to improve our products improve the experience for our customers and you know just catching some piece of the last panel to also look at different ways and unique models in which to partner with both merchants as well as hyper-local delivery folks and ultimately one of the things that you know we're spending a lot of time on which we think holds a key is continuing to hold the team together and it's something I didn't really I'm not sure if it came up in the last panel or not but we think it's incredibly important to hold the team and the morale together during this period so I'll stop here I'll let everyone else introduce themselves we're seeing an opportunity to rewrite business models to improve your economics and we're seeing it every day across the board our economics are improving So before we get into this discussion I would ask Abhishek please introduce and talk about the impact COVID had on the business right now Well it has been probably the most disturbing that has happened over the last two decades for some of the online delivery companies as we have seen India definitely has taken a much bigger role in the company companies taking in the China and the US and hopefully this is all for the best and we will be able to recover pretty much soon the way it is happening right now but overall I think it has had a significant impact both in terms of from a regulatory perspective as well as from a customer sentiment perspective I think every market we have seen like there's a massive fallout demand as well because the customer sentiment is like to stay indoors and not to order from outside anyways am I audible better now? Yes Abhishek you are So I think the sentiment has definitely taken a big dip and it is going to take some time to recover in terms of getting some of those volumes back obviously the entire non-essential category is not working and that already contributes to about 60% of the overall e-commerce volumes in India or retail volumes in India which is like zero right now so the only place where you see a lot of action is the grocery and the food which essentially come in the essential category so what we are seeing right now is like the impact is very different in different markets a lot of markets there has been obviously a significant impact because the shops are not open I would say the bottlenecks in even the back end supply as well which is not enabling the platforms to fulfill the customer demand and also we are seeing there are a lot of major markets actually where the customer demand has dropped down because of the overall sentiment to stay indoors and to stay safe so I think that's probably what we are seeing in the market today I think the only hope that we have is that at least what we have seen in China is that some of these online markets recover pretty fast for the COVID type the volume actually stabilizes to pre-COVID volumes pretty soon and in some of the categories we actually start seeing growth as well because from a long term perspective ordering online and getting things at home will be considered to be slightly more safer as compared to going outside and shopping out where there is a high probability that you will get in touch with someone else or individuals out there let me move to you and ask you about as a tech provider how has been the impact at your business and has there been any best practices which you would like to share so just to give context e-commerce is a e-commerce supply chain SaaS platform we are at the center of the ecosystem which connects with marketplaces with logistics providers like Shad of Pags Delivery and ERP systems and Point of Sale systems we are the platform which enables that these partners are able to communicate effectively obviously COVID has impacted the overall economy macroeconomics and it has impacted us as a company as well because non-essentials e-commerce is not happening but at least in the essentials category what we've seen is we've seen a week on week jump of 70 to 80 percent for our customers who are in the essentials category so that's a heartening trend I think it is also forcing brands to think about setup and take notice at least the FMCG and pharma brands that we need to now take a direct to consumer strategy very seriously so consider this as a two fold change for them these brands have to move from a traditional B2B mindset who are more direct to consumer and within the direct to consumer they have to think about now hyper-local and we are having very interesting conversations and we believe that with these brands about how to enable hyper-local for them so because hyper-local will require a lot of these partners coming together we are seeing very interesting partnerships happening very recently Flipka, Times Up, Uber, Spencer's Retail or a Geomart Facebook deal that has happened I think a lot of these interesting partnerships will come forth and these partnerships have to happen at least in the short term for a seamless experience that we can offer to the end of the year in technology I believe personally technology will play a very important role in that because without a central ecosystem these partners will not be able to communicate effectively with each other and the supply chain will then continue to be broken Chakrata is coming to you a quick introduction from your eyes yeah thanks Puneetra for having me here Country Delight is basically a direct to home consumer brand we are probably the largest direct to home consumer brand currently serving directly to the customers we serve nearly 2 lakh families with milk and other fresh produce direct to their doorstep we are basically a full stack model and that has enabled us very very strong control over our supply chain even on the worst day we could serve 90 to 93% of our consumers which has been a good strength to what we have done we learnt a lot and when we attacked this problem we attacked it at three levels one at the front line level where we work with our delivery partners and the production employees doing a number of things varying with insurances for them enabling them with supporters in case of the production facility building good sanitization measures second at the business level went quite deep on tech to build monitoring systems and security and safety systems across the business to ensure safety of our delivery partners and third at the consumer level innovating a bit on the business model whether it's on the payments front or whether it's on communication with customers for changing their delivery schedules or constant communication about the measures that we are building to build more transparency and trust the consumer level so it's been a great experience and would love to keep sharing more as we go forward in the discussion so Prashant coming back to you would you like to share some more insights into what we can see as the more evolved business model and cost structures in the coming times from start ups in the hyper local delivery space yeah maybe a good place to start is to look at what behaviors are changing and at the consumer level and I think it's already you know we've talked a little bit about this on this panel one of the things is for at least essential services we are seeing a lot more openness and adoption to order more of their essential services delivered to their homes and in some cases essential products which we didn't think were essential in Denso we are seeing a lot of people ordering pet foods didn't probably look at that as being essential at any age but people need it they have pets and they need to make sure they take care of their pets medicines of course that's always been there but we've seen a huge increase in that category and of course groceries and the daily essentials clearly we saw that so one is the willingness of consumers to be much more open to order food online and get it delivered we think some of this will continue for sure you know and for us we've seen that in the first few days of course there was hoarding but today beyond the first week or so we're seeing consistent behavior of people wanting to receive this directed to their homes they're seeing that the ability of transparency they're getting in terms of both the quality of products the fact that these are no contact deliveries they're getting information on temperatures of people that are delivering something that if they just walked into a store they may not be able to get if you walk into a store for example at either a local merchant or a large merchant you don't know who else has touched that product but here at these people whether it's perceived or real they're getting a better sense of security we're seeing something very similar also in the case of say Rebel where people are open to getting more of their prepared food delivered at home because we provide a lot of transparency and information about who's preparing a food so I think consumer behavior is definitely changing at least in this category and we think that it will continue to change over time which means that merchants will also need to change they'll need to change what they stock they'll need to change the kind of information they get they'll need to change how they deliver ultimately their experience not everybody may be open to walking into their stores tomorrow so how do they leverage the the host of delivery networks that are out there the hyperlocal delivery networks are out there and where we're seeing there is if you can provide a lot more insights to that merchant you know today or yesterday before covid a merchant was stocking whatever a distributor generally was pushing on them the distributor would give them a lot of incentives merchant would feel good about it and I'll stock it of course the merchant would have some sense of what are fast moving items beyond you know a handful of things a lot of it was also pushed by distributors today with say for example dunzo we're giving merchants so much more insight into what they should stock when they should stock it that kind of insight is helping them not only get the right SKUs but having the right SKUs means they can fill their fill rates are improving their fill rates are improving means that their inventory churns are higher which ultimately means that their cost of working capital is going down I mean this is it's amazing within literally six weeks merchants are seeing the value of these insights and this information and the ones that are willing to adapt the ones that are willing to look at technology and information as a way to run their businesses better we think are going to survive we think that some of the merchants that don't adapt probably you know won't survive so we're seeing massive changes within a business model both from a change of behavior from a consumer point of view and willingness to order more improved frequency and from a merchant adapting newer technologies to gain more insights to then change what they're actually stocking and how quickly they stock those things so those are kind of the key changes we're seeing between consumers and merchants within our businesses we're also adapting newer mechanisms to enable our ability to serve customers better for example in the case of Waycool an agri tech platform that we have what we found is that when a particular market was shut during the crisis and apartment buildings for example won't get any food we were able to convert our warehouses which never really were built to serve as direct customers we were able to convert our warehouses which are fully automated to service large apartment buildings overnight it's an opportunity we never thought in fact we were trying to stay away from what we saw that this is something that users need customers want and can we service that and a lot of this has helped us retool a significant part of our business so these are just some examples of how we have seen seeing an opportunity to service our customer better and then changing a business model to adapt and I guess in all of these things what we've seen as I started the conversation because at least these businesses tend to be focused on essential services we are seeing a huge improvement in our unit economics across these companies so I think that it's a really important time to sit back and see things you never tried before you know it's a great time to try a few things not everything is going to work but have to have that openness to go out and push new ideas and see if they can work you'd be amazed of how resilient you know the ecosystem can be if you can really get out there and try different things interesting so obviously coming back to you I'm sure you would also have developed some new practices in these challenging times and would you like to share some insight into how delivery in these times has shaped up differently I think ever since the lockdown has been happening people like us have been obviously at the forefront in terms of doing some very interesting innovative things as well as like we believe that obviously the amount of innovation and the things that we change is going to be very very critical for either our client which is essentially the platform that we work with to generate back the customer confidence and I mean obviously like the biggest thing in mind and the biggest thing that we have done about is in terms of how do you make your entire delivery more safe more safe for the merchant as well as the delivery partner and obviously the biggest of them in consumer and because the moment like you start seeing some of those negative effects or you basically see there is a tip in customer sentiment it really really impacts hard on the entire ecosystem I'll give you an example a couple of weeks back I think there were a few cases or at least one case that I can discuss about which like which got exposed where basically a delivery partner had a symptom of covid and it eventually tested out positive with covid now that entire thing had a significant impact on the entire customer segment on a pan India level and there there is like a significant volume drop that happened throughout every possible platform that we could know of so I think safety is the big big key for us and I think that's where we have spent most of our time in our way of thinking and figuring out how we can do it I think I'll talk about some of the interesting things that we have done and either learning that we have had from some of the global system that we track very very closely today I think one of the biggest thing is how do you like delivery boys are safe and basically the entire concept on contactless delivery how do your delivery boy operate in a way that he does not get in touch physically with anything out there in this entire ecosystem so that requires a lot of change in basic flow the way delivery happens the way you behave at a merchant the way you behave at an end customer how do you track some of those moments at a pan India level I think that is something where we have worked a lot actually the second thing that I think which comes to my mind where we did a bunch of different situations was around how do you capture whether your delivery boys are using masks they are having hand sanitizer they are basically they know about the right precautions that they need to take in order to ensure some of these things and how do you do it at a pan India level where like for example today we have around 25,000 daily active people okay and we need to monitor any process that we need to create we need to ensure that this basically gets replicated everywhere actually we built a very interesting selfie system now it works on a basis of image recognition software which essentially captures the photograph it basically tells us whether this guy is wearing a mask or not now every activity that happens after that is the fact whether the delivery person is wearing a mask or not and orders get allocated only if that particular person is basically wearing a mask or following a certain protocol now this is again something very very important and interesting that we ended up doing the third thing which I can talk about right now from an innovation standpoint is also on the fact that basically in every city like the world has actually become so much more hyper local that in every area where you have to operate in you have to take a permission from a local police system out there in order to operate and basically deliver a censure in some of the most critical urban areas you actually have to create passes for each and every delivery person to actually go out there and operate in that system now this is like one thing we actually came up within just the next three to four days when the lockdown started and what we had was we had a system on the app itself where basically a delivery person can apply for a pass he gets a pass on the app itself and whatever necessary permissions are required you actually show it on the app rather than basically having any sort of a physical intervention in doing this and this was actually a big big thing for us to actually get the people back on the platform and get them working because we were able to instill the confidence in them that whatever they are doing is first of all legal it's completely safe and they have all the necessary documents in place to actually operate in this particular zone and like initially we had like I would say underestimated the kind of response that we'll end up getting by bringing something like this but today about 90% of our daily active user actually visit this particular page on our app more than once a day so I think those kind of fundamental things in terms of how do you ensure the safety of the entire ecosystem have become very very critical in times like this. Thanks, thank you for such insights. So Chakra sir coming to you have you seen the spike in terms of delivery orders coming at the Country Delight app and how have been your response towards answering those? So Punita the first two three days there was a 2x3x surge in volume from both existing customers due to hoarding and new customers who were not able to find the reliable services across but we sort of prioritized our situation to first serve our existing consumers who we've been serving historically and because we operate on the subscription model and for us what we care more about is people who are regularly with us and we sort of ensured that even on the worst day of the lockdown 90 to 93% of our customers bought their milk deliveries. Now this has been a little bit of a rare achievement across the ecosystem and this has built a lot of credibility and word of mouth in our business and this has led to a lot of positive effect from the customer point of view because one we give products which customers love and two there was a lot of reliability that they could bank on with the country delight even in places like Tune where things were extremely extremely difficult our delivery partners risked a lot and sort of got the product out there to the customers that has seen a further improvement in the business so I would say that between let's say March 15th and today the business has jumped nearly like 40% in overall value and in terms of regular customers they account for 30% of the increased value and 70% of the increased value was by new customers the second learning which we had which really helped us a lot is communicating a lot with all stakeholders and basically your customers as well sending updates that tomorrow's delivery will come at 2am instead of 4am driving your entire system to make that happen gave customers a lot of confidence because it showed the efforts that the company was putting to make sure that we don't even lose on one day of milk to you and that in turn God has a lot of positive brand love and loyalty in terms of business as some of the panellists Abhishek and Prashant have also been sharing we have gone a little deep on tech as well apart from showing whether people are wearing masks or not we are trying to capture their temperature data real time start building analytics on this we are working on this whole ROGC2 app which is again a very brilliant initiative by the government and my only hope is that they open up the APIs for people in the morning delivery ecosystem because the information that they have at a country level or at a community level is far deeper than what as individual businesses we can do but at least for now we are trying to work our way manually to build the images and then have our systems read those images and understand how many of our delivery partners are at risk and hence categorizing them accordingly and the third thing which we have done is provide a lot of assurance of safety to our delivery partners if anyone calls they get paid for two months there is no questions asked about this for our delivery partners so people who are worried about their monthly income do not have to worry about that so much and focus on their health as well as their ability to function in the future the second thing we have done is taken a 1 lakh rupee insurance for all our delivery partners again these were done in the first 2-3 days which really helped build a lot of trust and confidence with our delivery partners as a company we have also built a culture where we really hurt if we are not able to deliver even one day and that has sort of allowed us to come through this crisis in a much stronger way and even going forward we plan to keep this going in the sense that Covid is a part of our life a part of your business expense has to go into safety and security and communication with all stakeholders in the business and we should not shy about it anymore is what we are feeling I have another question here coming back to operations delivering in these times I am sure must have added to multiple increase in the cost of serving each order so I mean how are you looking at that is it going to imply long term losses on you as a company or are you passing those costs to the customer how do you see that playing out in the long term in the long term whatever so one as a business cash is king today and it is just not possible for us at least even though we are a profitable business at least or a break even business we are it's not just possible for us to take on a lot of fixed costs so wherever there was a cost increase we kept it as much variable as possible for example there was the surge in orders and we are doing more business than we were before but what we did was pay our delivery partners for double shifts rather than this has you know given them more income during these times and also helped us to keep our cost structure very nimble second thing is for example in a production facility some of them are working on full capacity we quickly move to take on lease you know some of some other production facilities for a very short term period even if it is costing us a little bit higher rather than take up long term contracts and keep things incur more fixed costs so at least on cost basis our approach has been highly nimble agile and flexible even if it is costing us a little more temporary so that we can observe the permanent trends that are coming out of this and then take permanent costs but if at any point of time we feel that you know there is a permanent cost structure evolving into this like for example you know masks and sanitization equipment is a permanent cost structure and if it starts hurting our survival only then we will pass to our customer otherwise we will try our best to absorb it as a business because this is not a time where we really want to take too much advantage of on any side at all coming to you how technology do you think has shaped hyper local and specifically helped during these times I have been talking about how they have built technology to help their company function within the hyper local space I will talk from Unicommerce's perspective because we interact with these E3 key stakeholders which is one brand on one side the merchant who is actually going to deliver on second and third delivery partner I think what we are enabling is this entire stack through which all of these systems because each of these stakeholders have their own systems and they need to communicate effectively with each other the brand needs to get the customer order they have to be enabled to become a direct-to-consumer country design has done that but there are many FMCG players large FMCG players who have not even thought about direct-to-consumer before this so I think as a technology player we are helping them enable become target to consumer then tying them up with the logistics providers multiple logistics providers so that they are able to serve different pin codes and finally enabling the merchants because the merchant needs a lot of hand holding for them it's a new thing while they may be getting insights from Dunzo and others but it's a very new trend and they need some basic systems for them to be able to make some good out of these insights so we are helping provide that system or integrating with the system for retailer or a piranha store is already using that all of this has to work seamlessly for an end-consumer to be able to get full visibility on the order from the time they have placed the order to the time that they have delivered for example we talked about that the delivery is happening at 2 AM instead of 4 AM this kind of communication also needs to happen through a central system that's why this ecosystem needs to be built and Unicommerce is kind of powering this ecosystem and we can leverage this from the scale that we have got serving almost 20% of India's e-commerce today so we understand how things operate at scale and we have worked with 10,000 plus SMEs already so we understand the psyche of an SME also how the hand holding needs to be done for them to be able to adapt the technology ultimately it's the piranha store who's going to play a pivotal role for the deliveries or the customer demand to be met and those need to be enabled and that is I think where we are playing a very crucial role by onboarding them on our platform or tying up with providers who are already working with them Prashant coming back to you like you had given the example of Waycool and others for these hyper-local brands do you see this spike in the orders is going to be a lasting trend or is it just during the lockdown I think if you step back our overall food habits are not going to change at the end I think we're going to consume pretty much what we consumed yesterday and a month ago is probably what we'll end up consuming tomorrow and six months from now you know it'll have its sort of natural growth that the country has gone through over time having said that where the differences will come is one the kinds of food that people will consume we're seeing that people are going to want to consume more healthier food categories somewhere there's a perception that that also means that that food is better for you and it's not touched any virus etc. not sure that's always true but that is again a perception that I think we're going to see happen we're going to also see that how people receive that food will change the types of food they'll consume how they'll receive the food and what that expectation is going to be so for example in Waycool when we deliver anything to a Kirana store or a retailer or a large restaurant we're because we're a fully integrated platform our customers are now asking us where did this product come from or if this product wasn't well can you take it back because it's good we're able to trace that product back to the actual farm so that level of transparency is something that you never expected both individual consumers to seek nor did you expect retailers and other customers to seek we are able to now because of the technology platform that we have in a fully integrated platform are able to actually deliver on that which means that people are going to want to see more of that type of information going forward and we make decisions based on who can provide that kind of information versus just walking into any random place and picking up what they want of course you'll see some of that too but we're slowly starting to see this new expectation creep in and I think it goes back to both what Chandra and also Abhishek said is trust these are just different forms of trust we talked about trust with partners, delivery partners one of the things that we're looking at is in the case of Denzo if there was a retailer that was a very popular retailer at some point you might find that there might be 50 partners waiting there to pick up groceries what we realize that A in this environment that's not a good thing so we use a lot of our technology to enable throttling meaning making sure that we only limit how many orders a particular retailer might get per hour to ensure that we are improving the essential safety of our partners by doing things like this so I think we're seeing changes in behavior of what consumers are expecting and what customers are going to expect and we're also seeing changes in behaviors of what we should deliver to our partners which we think will kind of drive trust one example is in the case of rebel foods we're the first in the world globally to print temperatures of every single person in a kitchen on your receipt every single time you get an order now you've seen a bunch of other companies globally trying to do that but it was amazing how many times we received responses from customers saying oh wow I never thought this was possible so I think consumers are going to expect more transparency because I think they'll also see that to be equating to more hygienic food higher quality food and I think that we're going to have to invest in these things and to your question are these investments going to increase cost? absolutely this is not a cost free venture having said that we do think that at a very philosophical level these are the right things to do so now as a business we've got to find ways in which to improve our economics improve our margin structures to make sure that we can keep doing this post the crisis and what we are finding is that you know where there's a will there's a way to give an example in Waco today with half the staff that we have mainly because we're just not able to get as many people back in due to some of the restrictions the government has placed we're able to deliver the same amount of output now somehow we managed to do this I don't know what that means going forward but you know kind of the nature of this crisis has forced us to rethink how do we do more with less and that's helped us actually improve our economics we were nervous how are we going to absorb this cost initially but now we see this as a more permanent way to live and to provide this kind of transparency to customers and that's going to improve trust ultimately Abhishek how are you dealing with these issues like labour shortage which plays an important role in the supply chain logistics part of it so I think see different legs of the logistics ecosystem are having different kind of labour problems okay if I look at the overall last mile gambit of things actually the labour problem is not that intense because what happens is that in the last mile activities the labour that basically the people who do a lot of deliveries are staying nearby only they are basically urban guys who end up doing a lot of delivery because there are a lot of restrictions like they need to have a bike they can only get a bike if they have a residential address or a lot of activities get involved when they are basically staying in that particular city so what has happened is actually in the last mile side of space because the demand has drastically fallen down the e-commerce delivery has completely shut down from what volumes that were happening pre-covid almost like 70-80% on the volume don't happen right now so interestingly on the last mile bit only there is an excess of number of delivery boys who are there on the ground who are available with companies like us as well as like a lot of similar companies I am sure Dando for example might be having an excess number of delivery boys to what they were probably having before and it's not that big a challenge to find more people as well because the number of sources through which some of these guys can make money is also very less delivery is one of those sources where people can actually make money in today's tough times and that is why I would say on the last mile there is actually not a lot of labour shortage where you see significant amount of labour shortage is towards the back end supply chain where I would say mostly in warehouses and distribution centres where let's say hundreds of people used to come together and work now one of the good strategies that companies have been able to work on over the last decade so has been that you basically bring hundreds of people from a rural area you mobilize them into an urban zone you give them housing and you make them stay over there and they'll come day in day out and work over there and they won't even run away okay and this is a very tried and tested model which works in manufacturing which works in housekeeping which works in even logistics warehousing everywhere now this is where the maximum problem has been coming because people are running like people want to go back to their home people want to because of opportunities and they like want to be closer to the families so the way we are hearing and the way we are understanding is that wherever there was a labour aggregation and wherever there were people who were mobilized from rural areas into urban that is where you find the maximum amount of challenge today the third piece where we are seeing a mixed sort of a reaction is basically the trucking community okay which there are two kinds of trucking communities out there one is the intercity trucking community which is like which moves big trucks the second one is basically the small truck community which runs for intercity sort of a distribution again in the intercity sort of a distribution network I think the disruption is not that high because most of the local people only move around in trucks and that's like one of the places where we are not finding too much labour issues where we are seeing a lot of labour issues is the entire intercity where movement from the factories to the distributors is restricted movement from factories to warehouses is restricted moving from a particular warehouse in any part of the country to every other part of the country is completely restricted and that because if people are not there in the warehouse there is not inventory getting packed at the right time it is not getting dispatched at the right time people don't have enough earnings to make and hence people just don't even turn up for work so it is having I would say a ripple effect right now and the major place where we are seeing people struggle in the intercity bit when it comes to logistics another interesting fact is when lockdown happened and this is something I think it came in some of the leading media houses as well when lockdown happened suddenly there were like millions of trucks which was stranded at state borders you can't move those trucks for us we had more than hundreds of trucks which was standing at state borders and until about two weeks from that time when the lockdowns happened in the last week of March two weeks those trucks could not have been moved okay now imagine a life of a truck driver or a life of a single truck operator if I own a truck or I run a truck a fleet of four or five trucks if my half of my fleet is stuck on the road and my drivers are stuck over there there is nothing I can do about it it took government like a couple of weeks to realize that these guys need to be allowed to move otherwise first of all the inventory is getting wasted in those secondly this is going to create a major labour issue now what that has done is it has actually created a very negative sentiment into the trucker and there is so much uncertainty that a journey for example a Delhi to Bombay journey which anybody can cross in like about 36 to 40 hours on road today it is taking close to 60 hours because there are obviously various checks in between now this is creating so much apprehension between the trucking community that they don't even want to go for such long roads and they just go back to their villages stay at home stay safe until there is complete clarity on the regulatory front of it but then that is where we are seeing a lot of disruption if I talk about it it's the intercity as well as the warehousing bit and if there is disruption right at the origin we call it the origin logistics then it has a ripple effect for the entire supply chain and it flows obviously to the last mile so we hope these situations will improve even after the lockdown basically vanishes away but our idea that it might take actually a couple of quarters to come back to where we were just about a few months back Punita I am just going to add a comment on this I think Abhishek you are absolutely right I think the next phase of the issues that I think we are seeing is one if the trucks are not able to move intercity and it is taking long and they don't want to move actually go on those routes it is also going to impact the core fruits and vegetables that are travelling across the country we are already seeing and I know this has been reasonably well covered in press but it is important to know that well today I think in some of our businesses we have been all fine I think that we are going to see a next wave of issues prop up when farmers are producing crops but not able to move it to their field because no one is willing to pick it up and then take it across state lines so if it is within the state within city limits those kind of fruits and vegetables and produce will get consumed but if goods need to move longer distances I think you are going to see the next level of issues crop up where it is just going to sit there it is going to rot and in many cases farmers don't even want to you know the crop because they are seeing this issue come up and so you could see a situation where in some cases particular fruits and vegetables may not be available in the market so you would see higher prices for those or just complete lack of availability so I think this is going to be a real issue in the midterm that we are definitely monitoring very closely and trying to lock down as many suppliers and farmers as we can to entice them to actually crop the plants and we are making commitments to them that we would actually pick up a minimum of this much so that they know that their effort won't go in vain but this is going to be a much more fragmented macro issue across the country and I am not sure that there is a large scale solution to this I think each of us are trying to solve it at a local level where appropriate but I think this is going to be a big issue So I think just to add on to what you just said and also to earlier one of the answers that you had done that this growth that we have seen especially in some of the essential categories will it sustain or not I think my answer to that is that a lot of things that were happening earlier probably in a more fragmented manner probably in a more distributed phase wise manner I think it will start getting consolidated a lot so even like companies like Waycool they are probably doing a fantastic work in consolidating the backend work I think demand and probably the adoption for some of these things might radically increase and 6 months, 12 months down the line we might see a lot more proportion of goods getting moved through some of the organized players The second thing around what we believe are the macro trend that is happening right now is that a lot of things will start having a more hyper-local effect hyper-local not just from a last mile perspective but even from the sourcing perspective states would want to become self-sufficient in terms of what they are eating and what they are consuming because like the interstate movement is not going to be that easy in times to come so people will try to probably narrow down the supply chain maybe have local sourcing methods for everything that they want to the consumer to consume out there what this will also lead is that there is going to be an integration between the offline and the online supply chains today most of the companies who are working in an online who are providing an online supply chain they actually don't very well integrate with the offline supply chain that has been traditional out there they end up building parallel supply chains our belief is that these supply chains will start getting more integrated the online platform and the online players might actually rather than building a parallel supply chain getting it from the farmers or getting it from the factories might actually start sourcing the omni-channel platforms where the offline supply chain might have an access within the same city just to simplify that and explain and this is where maybe a lot of people even in this panel might get used to and might find a great opportunities out there is for example let's say there is just take an example let's say there is Adidas who is running multiple shops within the same city today if you are selling an Adidas shoe on any particular website you actually have to source it directly from Adidas from their individual factories or from the warehouse now what will start happening and what we call this as a classic omni-channel opportunity is a lot of this inventory which is there lying in those particular stores right now where consumers are not even feeling safe to come and basically get some of the transactions done they will start getting those inventory points online and you will see a lot of these omni-channel things getting faster like for example Unicom is doing some fantastic work and maybe Kapil can add on to this particular thought but we have seen a lot of action when it comes to the way the traditional supply chain will become more and more hyper-local moving forward Kapil would you like to add to it Thanks Abhishek I also agree that with the changing consumer psyche now like we just referred to a survey done in the US where more than 70% people feel that in the near term they are not going to visit a mall and more than 50% will not visit a store and all these brands have invested in real estate wherein they put up these fancy showrooms in short to medium term a lot of these brands are now gearing up towards converting these outlets into mini warehouses and serving customer demand rather than because like we rightly said intercity movement is now getting stuck delivering it from their warehouse which was traditionally happening in the e-commerce supply chain it will now transition to an omni-channel supply chain where the store starts becoming a warehouse for them and they will start serving consumer demand and that is where technology also plays a part because now the store inventory needs to be visible to the end consumer and this is not going to happen not just in apparel even in grocery etc we are talking to a lot of large brands and we are in fact collaborating in Unicom for a large FMCG brand where they want to enable hyper-local fulfillment through the Kirana store for a fashion brand they may control the store inventory but for a FMCG brand they don't control the end Kirana owner so that is why the Kirana store guy needs to be onboarded needs to share his inventory so that the orders can be done so I think a lot of not only from our demand shifts that may happen in the short term and we believe that this will impact in the long term as well but even from a supply side we will see hyper-local trends coming in before we move to audience Q&A like talking a bit more about on the demand side like you know I was speaking the other day and we were speaking to an FMCG company large one they were telling me that around 9% of their sales is through online channels before the lockdown I think and they see that it should become 30% very soon and that is the kind of demand jump that is going to happen through online modes and consumers who even like country like consumers most of them are people like housewives or you know people who are like 60 year olds who have not had the traditional comfort with technology and are having to get used to the new normal and as businesses we are also being more friendly and trying to use tools like WhatsApp which they have used more commonly to become more approachable and non what do you say something that they should not fear but you know at a broader trend it looks like online behavior is going to jump multi-fold even in our economy as it is with the global trends and online businesses are going to benefit very significantly from it FMCG companies are also shifting more of their focus and energies towards working with online players or themselves having online methods of reaching out to customers and adding to what Prashant was saying earlier there is this whole aspect of consumer trust and transparency that is going to constantly evolve consumers are appreciating more transparency and demanding more transparency like once there was this incident where one delivery guy affected 72 families in Delhi all our consumers started asking us what are you doing about it and then the more you talk that food is not something where you can transmit COVID especially when the packing is completely automated and we are following 100% contactless delivery and you keep sending this message and every day we are thinking of sending the ROGC2 screenshots to our customers for sending these screenshots of temperature we are anyway doing so adding more transparency and visibility to the consumer into how we are doing things builds a lot of confidence at the consumer level and this is something I mean it's not going anywhere there will be people in the future in every business where people will test positive for COVID and as a business we need to invest in the necessary confidence building systems both at the employee level as well as the consumer level and in the infrastructure to work ourselves around these things so on that note we will now move to audience Q&A there are some interesting questions lined up can we give the audio to Suresh Babu Hello Hi nice to meet you all in this way maybe I think it is a good way to communicate in your time in the right time this time so actually as Mr Abhishek was pointing out like we are working we are working on vending missions automated vending missions and there was a conversation happening like warehouses can be converted directly to a mini mini store so that is where we are currently working on the missions we are finding places to keep going this challenging time so shop in shop is what the concept we are going with like we are finding places we are trying to locate places inside the shop as you told Kiranas get converted into online panel system where we can keep our panels there ready made panels under the product getting displayed so this is one one of the thing we use the existing space and I have a question like if I am creating my own brand we are in the creating our own brand in a franchise mode right now so to get the spaces in a bit commercial spots like is getting a bit challenged and another two things we have heard this we are facing is going to the franchise model is getting a space that is the first constraint and next I am hearing about national vendors vending association they are the local they load the machines with the Kiranas so I need to have some insight about all these things yeah I think again would be tough for me to comment on the national vending machine association and their constructs of working today but I think from a real estate perspective yes it is definitely a challenge getting a trust that you are basically following the right norms everywhere but again I think following safety norms bringing confidence into your real estate customers that how safe your entire end-to-end processes and probably proving that over a period of time should be something that can be a good start to do but I think it is generally going to be a very tough time bringing in new models because the vending machine sort of works really well in commercial constructs or residential complexes and these are the two places where we are seeing the maximum resistance in terms of getting an entry because this is where a lot of customers stay in and even for delivery perspective at least 70% of the complexes where we deliver to we are not even allowed to go inside the main gate I stay personally in a commercial high-rise building in Bangalore and nothing is allowed to move inside our gate like there is not you can't even get your friends inside or you can't even get your anybody inside right from household help to anyone so this is generally a bit of a challenge right now getting confidence of these real estate guys and I believe doing it safely in a few areas and then probably thinking about selling it up might help I think I was on mute we have the next question from Mr. Vijay Agarwal can we give the audio to Vijay hello let me ask you a question yeah during this covid time a beautiful thing would have been drones picking over for deliveries I don't see anything on that side happening even the government would have actually allowed or be more cooperative on that side in terms of regulatory front Vijay is there a question I don't see anything happening so why is that maybe I can just speak about it yeah so I think that you know it's taken the government some time on the regulations around drones I think it's still not fully complete but they have given preliminary permissions to a couple of folks to start to test unfortunately all of this happened right at the same time so I think that those tests will probably move out a little bit further then I think what we would have wanted Dunzo is one of the companies that has been given one of the two companies that has been given the clearance to at least test it would have been great I think it's a great question you know all sorted out six months ago and this would have been a phenomenal time to have tested that in live but I think we'll have to wait a little bit longer but it is something that the government is keen to look at there are some clear logistical issues here but nonetheless they are definitely looking at opening this up further so that's what I can share right now we can have the next question from Karthik Sagarwal can we give the audio to Karthik? yeah please go ahead sorry for that I had a couple of questions first one for Prashant specifically so considering the last mile logistics the unit economics so what is your take on charging convenience fee from the users for the hyper local grocery deliveries in the longer run and if I have to look at the percentage recovery cost of recovery wise how much of the LM cost should one look to recover from the convenience fee second question was to country delight to Chakradhar considering your D2 direct to consumer brand is your supply chain structure to deliver straight from the warehouses or dark stores also considering the limited shelf life of the products that you offer do you see a future where you partner with Kirana stores say with cold storage facilities to function as hyper local partners and do you also plan of entering into more essentials in the near or longer future? sure I'll take Karthik the first question quickly so I think what we're seeing as I mentioned on the call is that we're seeing consumer behavior change which is increasing both frequency of their orders as well as the amount of purchases they're making per order we've seen the average order value increase 2x and this is post the whole hoarding period now if this continues you know we will continue to improve our unit economics having said that we're doing two things one is you know we are seeing a marginal increase in delivery fees and consumers have been open to that we will see how that goes post COVID whatever that phase ends up being but we do believe that consumers are certainly being open to a small increase in the delivery fee the second is that we've also opened up tipping this is a very interesting other behavior we never expected anybody in India to tip and it could be that it's a COVID but consumers are really happy and appreciative of the work the delivery partners are doing and have been you know providing tips to them and that's also helping us make sure that our partners are making sufficient amount of earnings that they should be making so between these things what we're finding is that we've not increased any commissions to merchants and so maintaining that at the same level our unit economics are actually going up Kartik on your question regarding Country Delight and its plan to work with retailers see Country Delight even before the COVID was primarily born with the intention of giving pure and fresh products to customers and you know milk is a perishable product which has changed our shelf life and you know out of the like 7-8 years of Country Delight's existence 6 years were spent in mastering the idea of giving a high quality product with the adequate cold chain with the right processing directly to the doorstep of the customer so we tried in the past to work with retail chains but we found that you know there were very few people who had the kind of focus we needed on the cold chain and it was never really economically viable but you know if things change and we see people focusing more on cold chain as businesses we would love to partner with them but that is one of the core things why we started direct to home and why we why we ensure that there is cold chain all the way and we invest quite a bit even at the dark stores in cold chain of the product so I find it less likely that we will partner with retailers and to the second question on the basket of produce or the way ahead for Country Delight we have been a customer obsessive brand when it comes to the brand promise which is pure and fresh products that can be tangibly differentiated with taste we absolutely live this philosophy and we will continue launching products in this direction some of the products that we are going to launch with are in the fruits and vegetables phase we are looking at leafy vegetables as the next target segment for us because it's highly perishable it's fresh in nature and customers can easily figure the perceptible difference between a fresh product and a non-fresh product so the broader direction for us is FNV unadulterated oils batters this is the broader set of fresh product items as a brand we plan to get into considering the paucity of time we will just take one last question from Anirudh Singal can you please give audio to Anirudh everybody hear me yes okay the question is I'm actually a e-bike provider in a small tier 3 city doing some partnership with tomato in between like 40 bikes with them as of now planning to go statewide with 200 bikes in a in a matter of month so what really gives confidence in this bad time is that Yulu made news on 11th April wherein they had done partnership with tomato and netmeds for deliveries and what are your views I mean at this time does it really make sense for the e-bikes to partner with e-bike providers and the second part of the question is does it make sense for you to directly partner with the e-bike provider or does it make sense to motivate your delivery partners to do the partnership or take the bikes from such e-bike providers thank you I can take one part of the question I think just answering the latter part always makes sense to actually get more delivery boys to take e-bikes directly from you rather than engaging with a platform because it is essentially the delivery boy who is paying for the e-bike okay like a tomato kind of a platform will have to then again hire a delivery partner which is going to be a challenging task and for tomato it does not really matter whether they take it from you or they bring their own so from like even some of the thing that we see and like the way we work with some of the e-bike providers today is that we basically expose them to the delivery fleet that we have and it's better that basically you guys go out there and actually push to the delivery boys to use it in a certain way yeah just Prashant I'll just echo some of that I think the other thing that we would do is you know or you should do is there are some various financing models because at the end this comes to to financing and the cost of running an e-bike you know to pay up front for an e-bike would be too expensive right now they already have the bikes what do they do their existing bikes but for any new partner that you want to have on the bike you can get investors to essentially finance the bikes and lease it out to a partner a delivery partner at a rate that would be very sustainable and some of the models we've seen it sure feels like we're getting pretty close to making the economics work and in that case you know as Zomato or Swiggy or Denzo would just help organize this help negotiate the right kind of pricing you know at an aggregate level but I think it was Abishik as he said the specific transaction then would be done through the delivery partner yeah thank you panelists I think this will be all and we'll have to conclude the webinar here I'm sure the industry will surely relook at the distribution infrastructure and the new normal post the lockdown thank you so much for taking out time and I'm sure in future we'll all meet not in the confines of our houses but in some more physical spaces thank you for joining us today over to you Pratima sure thank you all the panelists for joining us I think it has been a fantastic session we've been getting a lot of messages on the good quality content we've been able to achieve over here and like Puneeta said hopefully we'll meet again outside this virtual space there were a lot of questions which went unanswered we'll try sending it to our panelists and see if we can get answers to those later I would also request all the delegates to please help us fill the short survey form after this it'll help us improve our future webinars thank you everybody for joining in have a great day thank you Puneeta thank you Chauya Pratima, thanks Rishan thanks Abhishek