Back in January’20, when the foreigner UberEatsgot acquired by the indigenous Zomato, we all allowed ourselves a smirk. UberEats’ paralysis to effectively cater to the Indian Marketwas visible to the naked eye. But now, as we all sit at home and look back, we all will agree, that exit could not have been timed better. If you’re raising your eyebrows to that, allow us to give you a trip around the quiet pandemonium unleashed due to the lockdown:
Online food delivery orders for Zomato and Swiggy has fallen by 70% during the lockdown, reported by the Economic Times. The order volume has fallen below 1 million orders a day when the normal was around 2.5 million as less than 20% restaurants are live presently. Things would have turned worse if it wasn’t for the local governments stepping in to allow the supply chain operations to resume. Of course, one cannot expect absolute normalcy as most of the casual workers have headed home with pink slips. At least now you can find the usual push notifications and digital marketing by these delivery companies to let you know that their front shutter might be down but they’re still functioning to deliver food at home.
In order to ensure safety, they’re also displaying their concern for hygiene: Rebel Foods, a renowned cloud kitchen chain has started live body temperature tracker on its app: providing customers with a live feed of body temperatures of those handling their orders from the cook, kitchen executive to the delivery person. The delivery giant Swiggyhas also introduced “Best safety standard batch”to deliver from only those restaurants that have rolled out features like temperature control, sanitation every 4 hours, use of masks and safe packing mechanisms.
Question: How do you remain afloat during a time like this when you’re only good at delivering food? (5 marks) Answer: Of course, by continuing to deliver food to the people who need it most: E.g. Food delivery platform Zomato has launched a campaign to provide ration to daily wagers who have lost their livelihooddue to the lockdown. So far, the company has distributed over 100 thousand kits in more than 20 cities. Each kit is enough for a family of 5 for a week. So, overall the number of kits already delivered by the company will be sufficient to provide over 10 Million meals. THANK YOU ZOMATO! Ola’s food delivery arm, Ola Foods has partnered with the state government to distribute over 1000 food packets twice in a day to migrant laborers across Bengaluru.
After giving us full marks for that answer (ignore the unconventional language) lets also talk about how the food delivery companies have also diversified into the grocery delivery industry, or as Sachin Bansal (co-founder and ex-CEO of Flipkart) calls it, the holy grail of e-commerce:
Zomato, which was already pondering to enter the grocery delivery segment heard the call of nature and flagged off its Zomato Market without further ado.
Pizza chain Domino’s India franchise owner Jubilant Foodworks has announced the launch of Domino’s Essentials. In partnership with packaged consumer goods major ITC Foods, the delivery infrastructure of Domino’s will be leveraged to help customers order.
Swiggy, which had already forayed in the sector has now also started a hyperlocal delivery service ‘SwiggyGenie’ with pick-up and drop-off of items or parcels from anywhere within the city. To maintain the activity level in its app, it is also hosting curated wellness programmefor quarantined Indians, providing a range of teleconsultation sessions with health experts. Besides this, the app also allows users to customise digital and onsite wellness programs for their employees and their dear ones.
Both Swiggy and Zomato have raised ₹264 crore and ₹38.2 crore respectively to deal with the crisis. While we extend our sleeping hours at home, it is rejuvenating to see how some are still managing to hustle and for the right cause. It’s fascinating to witness the pace with which the startups are reshaping themselves by exploiting their existing value chains. During times like this, what is indeed most important is brand remembrance so that when times are better again, one can restart right from where they left off.
Right Now Podcast
SportiFan | Imagination Has Wings
You can call us a talented kid- ’cause we’re just 5 months old and we’ve already started talking. However, just like most kids are, we’re also a little picky about who we want to talk to: Entrepreneurs only.
True story: It was the 15th day of the lockdown when the sports-nostalgia started kicking in. We came to understand the importance of sports fandom in keeping up our spirits. And that’s when we began to ponder, what made us fall so madly in love with tennis players, football clubs and basketball teams? Well one could say it’s solely because of Roger/Rafael/Messi/Ronaldo/LeBron/Steph’s showcase of talent, but there’s actually a well organized system that’s working behind these players, clubs and teams to develop that fandom. That’s how we learnt about the concept of sports management and the homegrown startup SportiFan.
In this episode of the Right Now Podcast, we’ll take you through the story of the 9 months old SportiFan, put into perspective by its co-founder Arko Biswas, an MBA with Marketing from IIM Raipur and a co-founder of healthcare start-up which was adjudged amongst the best student run start-up from Asia in USWC 2018, Copenhagen.
The vision of SportiFan is to connect sports fans, professionals, venues and clubs like never before to enhance the customer journey. Apart from Sport Business Management, which forms the core product offering of the startup, the founders (left to right: Samrat Ghosh, Sarthak Mondal and Arko Biswas) are also actively invested into Sports-tech and have already developed a patented Goal-line technology. To find out more, visit their website.
It is especially intriguing to learn how the founders actually met over a WhatsApp group that was created to connect football club Chelsea fans from across India. It was indeed their common passion for sports, combined with their spirit of entrepreneurship that pulled them together to flag off this venture. As Kartikeyan rightly puts it, one cannot stress enough on the importance of having partners who share the same vision and goals as you. Their endured spirit to keep researching and developing even when the economy is at a standstill is truly inspiring.
You wish we had revealed more but we really want you to hear it out for yourself!
So tune in HERE:
(Ps. If you find the voice quality to be a little imperfect, you would probably relate to your own workfrom-home experience)
We don’t know about you, but this lockdown is driving us crazy! And it’s not even in an Uber or an Ola, because even they’re not plying! TBH, we miss our cab rides so much that we took this opportunity to rate our old cab rides! We recommend you finish your backlog too and, in the process, probably also learn about the cab aggregators’ covid-19 response: It is of course visible to the naked eye that the cab aggregator business has come to a grilling halt. That means, their operations is down by more than 90%.However, like others have, this is exactly the time to innovate and keep hustling:
Ola co-founder and CEO Bhavish Aggarwal has proposed to offer 500 Ola Cabs to the Karnataka government for Covid-19 pandemic-related work. Under this, Ola will provide its cab for healthcare staffers, transportation of medicine and other essential healthcare services for emergencies. Ola is also diverting its management capacity to ‘Ola Food’ to deliver essentials more effectively.
Uber has launched a new service called Uber Medicto provide transportation support to the frontline healthcare providers. The facility will allow healthcare providers to book a cab to and from their homes, healthcare centres and other medical facilities. To ensure end to end safety, partnered hospitals will also provide personal protective equipment (PPE) to drivers.
Even the online grocers are now in talks with the ride-hailing platforms to help them resolve the capacity-crunch to deliver essential products on time. However, that’s where their opportunities hit the dead end.
Both the cab aggregators are however doing all that’s possible to make life a little less difficult for their driver partners. For example, Uber has started a ‘Uber Care Driver Fund’ to obtain crowdfunding to help their driver partners survive this rough phase.
Ola on the other hand has come up with a slew of measures to provide a helping hand to the drivers:
‘Drive the Driver Fund’: in order to assure financial stability for driver-partners working with Ola, everyone is welcome to donate to this fund. To flag off the fund, Aggarwal has himself donated his entire year’s salary. Besides this, Ola Group and its employees have also crowdfunded ₹20Cr to help out the driver-partners. Ola has partnered with South Asian crowdfunding platform Milaap to action requests of donation to the Fund.
All eligible Ola driver-partners and their spouses have been covered by a floater sum of ₹30,000 under which they can receive a compensation of up to ₹1,000 per day for a maximum of 21 daysfrom the date of a positive diagnosis for Covid-19.
Sahyog: for driver-partners with liquidity crunch, Ola is offering an interest free micro credit scheme.
The startup is also waiving lease rentals for drivers who operate vehicles owned by Ola. The driver partners are required to return their cabs to the nearest station and in return Ola is waiving monthly instalments. (Under the company’s leasing model, Ola charges a deposit and a daily rental amount between ₹700 & 1,150 beside the non-refundable one time charge of ₹4,000 and refundable deposit of ₹21,000-31,000.
A usual ride with an Uber or an Ola along with a light conversation with the driver partner is likely to end with an audible frustration from the driver-side over the ‘partnership terms’. However, the ongoing act of benevolence by the cab aggregators will definitely help mend that and will reap benefit when the times are good again: The strategy can be seen as a move to ensure that adding back capacity when the engine reignites is prompt and effective. The move also shows that even though the cab aggregators have always refused to treat the drivers as ‘employees’, with age, indeed they have also succumbed to the higher calling of the much needed employer ethics. As Stan Lee would’ve liked to put it, With great power, comes great responsibility! And we’re glad that the Unicorns recognize their responsibilities well.
Welcome to the alternate world where the things are looking up as usual! What? You didn’t think that’s possible? Well, TBH we thought so too! Until we bumped into the grocery micro-delivery industry figures: The co-bosses of the segment, Big Basket and Grofers have witnessed a 3-5x rise in the number of orders while the average order value has also gone up by 25%. The setback: Both E-Grocers are currently operating at only 60-70% capacity because of lack of availability of workers and insufficient supplies. Grofers is seeing as much as ₹12-13 lakhs active users per day, despite having no delivery slots.
Desperate times call for desperate measures: To deal with the situation, the grocers have started delivering in cabs. They’re actively hiring gig workers and also roping in idle staff from restaurants. While Big Basket has partnered with NRAI and Retail Association of India to offer jobs to those laid off due to the lockdown, Grofers has begun giving on ground staff their share of essential goods at the end of the day apart from regular pay, providing them enhanced incentive to stay back.
To deal with the supply-blues, the players have reversed the conventional supply chain by sending their own fleet of trucks to distributor warehouses.
For a fast response to fix capacity constraints, Big Basket has acquired Milk-delivery firm Daily Ninja at ₹48 crores.It has also raised as much as $50 million from the Chinese giant Alibaba, as an emergency funding.
In a perfectly timed interview of Grofers’ CEO Albinder Dhindsa with ET, he took us through their internal strategies to deal with the crisis:
In the first 2 weeks of March, their main task was to prevent hoarders from cornering supplies to sell on the black market (like setting a ceiling limit on how much one can buy at once);
Post that, managing systems, implementing rigorous safety measures (like stopping warehouses after every 3 hours for cleaning) and devising strategies to help scale up to meet surging demands became the key objective;
It seems that the CEO only came out to appeal ‘Avengers, Assemble!’ Because now we’re seeing a surge of e-commerce startups cropping up from all segments, quickly diversifying into the grocery cum essentials delivery segment:
Paytm, Meesho, Shopclues and Zomato have launched delivery of grocery/essentials. Flipkart, Amazon, Swiggy had already entered the segment and are now pursuing it more actively than ever. Real estate platform NoBroker has now partnered with e-commerce delivery platform Big Basket through which, NoBroker’s customers can now place their grocery orders on the NoBroker Hood co-living app who gets it delivered through Big Basket. Grocery delivery startup Milkbaskethas launched a grocery helpline number for senior citizens in Noida, Gurugram, Bengaluru and Hyderabad, providing deliveries of groceries and other daily essentials for those who don’t have a smartphone.
We acknowledge the good business being done by these startups, providing the much-needed extra hands to the e-grofers. We’re sure that deep inside, even Grofers and BigBasket are thankful that the avengers are here because saying no to customers can do much more harm than good. However, when the clouds finally clear out, the customers will definitely be left with more options. While some e-coms will recoil from the venture due to unfeasibility, others will foresee economic rents by exploiting their existing superpowers (value chains). And that’s when we believe they’ll be headed for an ‘infinity war’.
Back in September 2018, the world watched in awe as the then 5 years old Oyo Hotels and Homes raised a fat billion dollars from SoftBank. With a $5 billion valuation, the startup surpassed the combined valuation of the Taj and the Oberoi Group of Hotels, which have been around since before Independence. Since then, Oyo hasn’t stopped from expanding across geographies and we’re sure many must have wondered what could possibly go wrong with so much money in its pocket. Well, now it turns out that all Oyo needed was the World to keep running and with the recent turn of events, it certainly hasn’t stood up to Oyo’s expectations.
In the first 2 months of 2020, Oyo was busy consolidating its business to improve its clingy-red-bottom-line. As its top-line got further dependent on the international markets (36.5% of total revenue) we wondered whether with the wake of the Covid-19, will their optimism fall sick too? It wasn’t until the USA became the world leader in Covid-19 cases, the startup, which has already laid off 34% of its global workforce, sent thousands of its US employees on furlough (forcing someone to be temporarily absent from work, often without pay) for up to 3 months. To further save up the cash reserves for a better future, RiteshAgarwal, founder and CEO, has forgone his salary for the entire year and the senior leadership have been asked to take a 25% cut on their salary.
Last but not the least, Oyo has also invoked the force majeure clause on its contract with hotel partners through which it is suspending payments like monthly benchmarks and any other amount outstanding. It is however no surprise that the hotel partners, who are otherwise also a audibly unhappy with Oyo, have been further antagonized by this action as they claim that the force majeure clause was never a part of the ‘original agreements’.
Oyo is in talks with Delhi and other State governments to convert its hotel rooms into subsidized pay-per-use quarantine facilities or isolation wards. Apart from that, it has also teamed up with Apollo Hospital which aims to create 5,000 isolation wards. Under the name Project Stay I, the hospital has also roped in other Hotels (for accommodation), HUL (for consumer goods), SBI & DuetcheBank (for digital transactions) and Zomato (for food delivery). From what we understand, the idea is to create an end to end supply chainfor providing medical assistance to those who have contracted the virus, while also effectively keeping them in isolation. Paytm has also partnered with more than 300 hotels (including Oyo) in over 60 cities, to provide accommodation to healthcare workers which can be booked through the Paytm app.
We acknowledge the good business done by Oyo during such tough times: in developed nations like the USA, Oyo has resorted to furloughs and not further layoffs and in the less developed geographies, like India, where the government definitely requires a helping hand to fight the virus, Oyo has stepped up in innovative ways and in the process, has also managed to keep the front desk open. No one can be too sure of when the normal ways of life will return. Chances are, it will return last for the tourism industry. But as long as the fight against the virus is on, innovation seems to be the only key to survival.
Learning from the Best
Theory of Good & Bad Capital
At a basic level, there are two goals investors have when they put money into a company: growth and profitability. Neither is easy. Professor Amar Bhide showed in his Origin and Evolution of New Business that 93 percent of all companies that ultimately become successful had to abandon their original strategy – because the original plan proved not to be viable. In other words, successful companies won’t succeed because they have the right strategy in the beginning but rather, because they have money left over after the original strategy fails, so that they can pivot and try another approach. Most of those that fail, in contrast, spend all their money on the original strategy – which is usually wrong.
The theory of good money and bad money essentially frames Bhide’s work as a simple assertion. When the winning strategy is not yet clear in the initial stages of a new business, good money from investors needs to be patient for growth but impatient for profit. It demands that a new company figures out a viable strategy as fast as possible and with as little investment as possible – so that the entrepreneurs don’t spend a lot of money in pursuit of the wrong strategy. Given that 93 percent of companies that ended up being successful had to change their initial strategy, any capital that demands that the early company become very big, very fast, will almost always drive the business off a cliff instead. A big company will burn through money much faster, and a big organization is much harder to change than a small one. Motorola learned this lesson with Iridium.
For those of you who do not know about the backstory – Motorola and its co-investors invested as much as $6 Billion in Iridium, to give the world a privilege to make calls from any corner of the globe. However, the whole B-plan failed to create enough traction owing to two major flaws, viz. the mobile handset weighed a pound, and a person had to be outdoors to place a call and so should have been the receiver of the call. Within 6 months, the business declared bankruptcy. It was only a decade later, when the business was sold for only $25 million. That is why capital that seeks growth before profits is bad capital.
But the reason why both types of capital appear in the name of theory is that once a viable strategy has been found, investors need to change what they seek – they should become impatient for growth and patient for profit. Once a profitable and viable way forward has been discovered – success now depends on scaling out this model.
~excerpts from the book
HOW WILL YOU MEASURE YOUR LIFE
by Clayton Christensen.