El Grocer is building resilience for future


May 18, 2020 | By Rupkatha Bhowmick

UAE-based on-demand grocery delivery app, El Grocer has seen daily downloads increase 10 times in recent months, compared to January-February 2020. The brand has seen over three times increase in the number of orders and four-five times in terms of value. Currently, El Grocer is focused on building resilience for the future, widen partnerships and expanding into other markets.

“The COVID-19 crisis has brought the whole e-commerce industry into the spotlight. Even after the pandemic is over, online shopping will continue to be part of a consumer’s day-to-day life,” observes Nader Amiri, founder, El Grocer. “It took food delivery platforms almost a decade to reach where they are today. In our case, the growth rate has accelerated; food and grocery delivery platforms will see rapid growth in the two-three years.”

The market dynamics have indeed changed. “Perhaps, we are among the fortunate few for whom the macro environment has proved favourable,” Amiri states. “Many businesses have had a negative impact. It is time to look at pivoting the business to sustain and evolve, ensuring resilience for the future.”

Also read: How grocery retailers are coping with online orders

Responding to market demand

One of the biggest changes in consumption patterns is the shift towards online, which is probably here to stay.

“New habits have formed, owing to the COVID-19 pandemic. Online shopping has become a part of day-to-day life; it is a necessity now, not a luxury. However, it is difficult to predict how much of these online buying habits will stick,” Amiri observes. “From the early adopters to early majority, we are still talking about single-digit online penetration rates. In some cases, it might go up to low double-digit. Overall, in the UAE, the online penetration rate is around 5-6%. A lot of businesses are considering going online. Many new users are getting online daily. The number of people shopping online, and the penetration rate will increase. There might be some changes in cart size and frequency, and as such online shopping will accelerate.”

Owing to rise in online shopping, El Grocer has started signing up speciality partners – including the likes of Eataly with its grocery range, Marks & Spencer Food, home-grown bakery brand Bread & Co.

“We started collaborating with more and more home-grown speciality brands since last year. We have signed up with local butcheries, speciality grocery stores like 1004 Gourmet,” Amiri shares. “Many predominately home-grown B2B brands – like Bread & Co. – are also interested to partner with us given the current situation and their need to reach consumers.”

Ensuring timely fulfilment  

With the increase in demand comes the responsibility to ensure timely fulfilment of orders. In this context, El Grocer follows a slot-and-capacity system, also calculating items per order. There is a specific capacity per slot, store and hour. That did not get impacted, as El Grocer continued to receive orders based on slots, fulfilled by the brand or its store partners.

“We have always offered same-day delivery timelines within two-three hours. Amidst the current situation, depending on the store and our increased delivery strength by three times, we have been able to maintain same-day delivery in most cases, with some spilling over to the next day. And for some extremely busy stores, the delivery timeline has gone up ranging between two days and a week,” Amiri states.

Being agile to take decisions

“Like many other businesses, the COVID-19 pandemic caught us by surprise,” Amiri admits. “On noticing early trends, around online shopping behaviour, we had to quickly take some business-critical decisions around hiring more people to be able to meet the demand surge.”

“With every passing week, we had to add tweaks; basically, be on our feet for the entire month of March. From early-April, things started settling down as we pre-planned for the next two-three months. We made some crucial decisions around recruiting more people – in picking, delivery and customer service roles – and tweak some of our technology applications in the background,” he adds.

Being responsible towards people

Currently, along with recruitment also comes added responsibility towards employees. Amiri agrees.

“We abide by all types of health and safety measures for our team members as well as our customers. The measures range from providing hand sanitisers, face masks and gloves to arranging transport for our people. We follow a hyperlocal model; we have pickers in the stores and had to think of the safest ways of transportation for them. We have drivers, which was easier to handle, but we had to ensure the arrangements are comfortable for them. We ensure implementation of stringent sanitisation measures while making the deliveries.”

Besides, El Grocer has not reduced the salaries of people. “That question doesn’t arise, because we are still having to hire more people owing to increased demand,” Amiri stresses. “Our cost base has gone up, but that will not impact any of our team members. We are raising a small amount of funding internally, as we have seen interest from our current investors to accelerate growth by hiring more people.”

Becoming the go-to ally

In terms of user experience, El Grocer has launched online payments. “Given the need for contactless delivery, our online payment rollout plan came at the right time. Our primary payment method was a credit card on delivery; now payments can be made online. We are also offering our customers the widest breadth of choice as they can quickly switch between stores while shopping on our marketplace-oriented platform,” Amiri explains.

Going forward, El Grocer is aiming to cement its position further in the UAE, to be counted as the number one grocery delivery app within a year or two. “We will also look at expanding presence in other markets,” Amiri reveals. “We want to be the go-to technology ally for our retail partners and delivery ally for customers.”

 

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