Illustration: Rahul Awasthi
Illustration: Rahul Awasthi

Hyperlocal model gets a new lease of life

Hyperlocal delivery of food and groceries is making a comeback. As India went into lockdown, e-commerce firms started forging partnerships with brick-and-mortar stores to cater to the spike in demand of essential goods.

The model

Hyperlocal delivery, which involved picking up goods from neighbourhood mom-and-pop stores and supermarkets, had gained widespread investor interest a few years ago. A bunch of startups had launched ventures to ride the boom. The model, however, failed due to poor unit economics. This time around, though, the tie-ups between online firms and brick-and-mortar retailers, especially the larger, organised ones, are favouring the offline retailers.

But here’s the catch

Hyperlocal delivery may be a short-lived trend. This, according to industry experts, is a stopgap arrangement at a time of crisis as e-commerce business is down to a trickle.

Grofers, one of the first few companies that followed this model, went on to set up its own warehouses instead of partnering offline retailers. “The reason we moved away from our previous model was because of bad economics, fill rates and customer experience,” Albinder Dhindsa, co-founder and CEO of the online grocer, told ET. “Everyone is jumping onto it right now, but the underlying supply hasn’t changed. We’re staying away from it.” Read more.

Illustration: Rahul Awasthi
Illustration: Rahul Awasthi

Deal street

Rebel Foods raised $50 million in a fresh funding round from a US-based hedge fund, valuing the cloud kitchen operator at over $700 million.

Graphic: Rahul Awasthi
Graphic: Rahul Awasthi

Big bucks

The latest equity financing round from its existing investor Coatue Management follows the $125 million raised by the Mumbai-based company in August last year, which was also led by the same technology-focused fund and saw participation from the investment arms of ride-hailing major Go-Jek and Goldman Sachs.

In February, it had closed a $4.91 million venture debt round from Alteria Capital.

The takeaway food company, which owns brands such as Behrouz Biriyani, Oven Story, Firangi Bake, Faasos and Mandarin Oak, also counts Sequoia Capital, Lightbox, ru-Net and Uber co-founder and former chief executive Travis Kalanick, among its list of backers.

ETtech Top 5: Hyperlocal model gets a new lease of life, brands go big on face masks & more
Internet crawls as usage jumps

A surge in data consumption during the ongoing lockdown due to the Covid-19 virus outbreak has caused internet speeds to fall steeply, two separate studies by speed testing firms showed.

In Numbers

Analytics firm Ookla revealed that fixed broadband – popularly called WiFi – download speeds decreased to 35.98 Mbps in March from 39.65 Mbps in February. Mobile download speeds dropped to 10.15 Mbps from 11.83 Mbps in the same period.

Separately, Tutela told ET that median download and upload speeds for both WiFi and mobile data between 11 am and 11 pm dropped by up to 36% and 17%, respectively, after March 25 when compared to February’s average. Read more.

ETtech Top 5: Hyperlocal model gets a new lease of life, brands go big on face masks & more
Big brands unmask a new category

Some of the biggest names in retail, fashion and lifestyle have started selling face masks.

Cashing in on demand surge

The move comes as Delhi, Maharashtra, Uttar Pradesh, Odisha and Chandigarh make wearing masks mandatory for anyone venturing outside. And demand so far is outstripping supply.

Amazon and Flipkart have asked apparel brands and suppliers to up their production of masks. Both marketplaces have also started to sell their own private brands of masks through sellers.

An advertisment for Wildcraft's new mask product
An advertisment for Wildcraft’s new mask product

Flipkart-owned Myntra, which had halted services due to the lockdown, has started delivery of masks this week. The fashion e-tailer has partnered with outdoor gear brand Wildcraft.

While Grofers is going to start selling masks, Reliance Retail is preparing to sell masks and other protective equipment. BigBasket has introduced disposable antipollution masks on its platform. Read more.

ETtech Top 5: Hyperlocal model gets a new lease of life, brands go big on face masks & more
Buying fruits and veggies amid lockdown

While the availability of fruits and vegetables has recovered since the early days of the lockdown, online platforms continue to struggle to deliver these to customers. Physical stores, however, have made available most products to a large extent.

Graphic: Rahul Awasthi
Graphic: Rahul Awasthi

State-wise availability of fruits and vegetables

Illustration: Rahul Awasthi
Illustration: Rahul Awasthi

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