Manpower and supply chain: Twin hurdles on e-com’s road to recovery

But it won’t be easy, said experts, pointing to the massive hit all the industries took both in production and supply chain.

According to branding expert Harish Bijoor, founder of Harish Bijoor Consults Inc, premium brands from the ‘desires and aspirations’ category are not doing well, while essentials are picking up rapidly due to panic purchase. In his estimate, rich urban homes are stocking 2.2 times the normal, while it is 1.8 in middle class homes. Even poor families are trying to keep a month’s stock.

K Vaitheeswaran, known as the father of e-commerce in India, says the panic phase has given way for calibrated purchase. “Now, the list will start including non-essential stuff also,” the co-founder of Again Drinks points out.

Conventional wisdom suggests significant gains for e-commerce players due to social distancing, as people will stay clear of crowded shops and malls. “But the biggest challenge before e-commerce is to handle physical delivery that has been the bedrock for traditional retail. Conventional retailers have outsourced delivery to customers for centuries, as it is customers who pick up the items,” Vaitheeswaran notes.

Bijoor feels the FMCG companies are facing the challenge of meeting the demand for stocks in the “needs and wants” segment. “With the lockdown, production is down and supply chains are working at a bare minimum. The problem is with manpower. There is not enough in the supply chain. Also, the movement of commodities is not as brisk and smooth as it used to be,” he says.

Now, sourcing manpower in thousands for making the deliveries will be a hurdle. This crunch in getting enough people to ensure smooth delivery will impact customer experience, which could work in favour of industry behemoths like Amazon that deliver a wide range of products. “They will have access to lot more systems and manpower, and ability to leverage manpower unlike the grocery e-tailers. So, the Amazon-like players will become more dominant, as others may not be able to scale back their operations once the COVID-19 phase goes away,” Vaitheeswaran opines.

In Bijoor’s view, companies are on a fire-fighting mode, getting the workforce back and ramping up production of categories that are selling robustly.

“Many companies have business continuity plan on paper. But for it to hit the ground up and running, it does take a couple of weeks,” Bijoor points out.

“Customers will do shopping offline in a careful and calibrated manner. But e-commerce will gain,” adds Vaitheeswaran, adding that small players are going to struggle. Observing that ecommerce players are also whittled down to the basics now, Bijoor adds, “While many of us have thought up these contingencies on paper, none of us really thought push would come to shove so soon!” Recessionary trends have forced ecommerce players to plan ‘coopetition’ (cooperation and collaboration) strategies in the short run. In the long term, however, it is going to be business as usual, he adds.