COVID -19 & its after effects on the grocery business.

Watch Time: 41 Minutes

 

In today’s Matrix Moments episode, we will cover the opportunities in the grocery and e-commerce space post-COVID-19, joining us for this discussion are Vineet Rao and Sourjyendu Medda, the co-founders of DealShare as well as Tarun Davda, Managing Director at Matrix Partners India, and Gourav Bhattacharya, Director...

 

In today’s Matrix Moments episode, we will cover the opportunities in the grocery and e-commerce space post-COVID-19, joining us for this discussion are Vineet Rao and Sourjyendu Medda, the co-founders of DealShare as well as Tarun Davda, Managing Director at Matrix Partners India, and Gourav Bhattacharya, Director at Matrix Partners India.

Salonie:

Hi, and welcome to Matrix Moments, this is Salonie and in today's episode, we're going to be talking about the opportunities in the grocery and E-Commerce space post-COVID-19, joining us for this discussion are Vineet Rao and Sourjyendu Medda, the cofounders of DealShare as well as Tarun Davda, Managing Director at Matrix Partners India, and Gourav Bhattacharya, Director at Matrix Partners India. DealShare is essentially a social e-commerce platform that focuses on the grocery and home categories targeted at the tier two and three cities of India. Through the course of this episode, we plan to cover strategies implemented and measures taken to navigate their way in a post COVID world. Their thoughts on the way forward, as well as learnings and insights from their journey of company building. Tune-In

Gourav:

Welcome, everyone. I am Gourav from Matrix and for this podcast and in this episode of Matrix Moments I have with me, Vineet Rao and Sourjyendu Medda from DealShare and my colleague Tarun from Matrix. Guys for the benefit of everyone listening in, you can just introduce yourselves.

Vineet Rao:

Sure. Thank you so much, GB. Hi guys. My name is Vineet Rao and I'm one of the founders at DealShare. I was born brought up in a city called Jaipur and then I studied at IIT Bombay. I joined a startup called Trinity initially for the first three, three, and a half years. Then I spent over a decade at Microsoft in Seattle before moving back to India. India definitely shows a lot of promise, a lot of growth, and one of the best places where startups can really be successful. I've already done three startups. The first one I moved back with what's called SilkCloud that got acquired by Unity. Then I did two more startups, one in a virtual reality area and one in cross border e-commerce before starting DealShare.

Sourjyendu Medda:

Hi, I'm Sourjyendu Medda, I'm also one of the co-founders of DealShare. I take care of a supply and business for DealShare. I, I also grew up in the same city, so both of us belong to Jaipur and then I passed out of Amity and spend some good 18 years with some good consumer giants of the country. So started with Britannia and spend some time with City Bank in retail assets, spent a good 8 yrs with Metro cash and carry. And finally, my last ­­­stint was with Raymond's FMC before starting DealShare.

Tarun:

I’m Tarun Davda. Gourav and me have been involved very closely with DealShare from the first day since we invested it's been a fantastic journey so far and Vineet and Medda, I don't know if you guys remember, but I still remember the first time we visited Jaipur, to spend time with you guys on the team and diligence. And I think we ended up at 4:00 AM, with Vineet on the floor, at Amit Jain’s house, so it's been obviously a great fantastic journey since then. So the idea of this is we have been hearing a lot about sort of grocery tech and what's happening in India, and, Gourav will come to that, and sort of will ask you guys to share your experience of navigating COVID you know, in the current context, but maybe I'll start with the first question, which is you guys spoke about your individual backgrounds, But, talk a little bit about the thought behind DealShare, you know, grocery is a very large market, but it's also been a very, very difficult market to penetrate which was on both in terms of organized retail penetration, as well as online penetration grocery and more importantly, it's been an even more difficult business to actually make money. So, talk about like a little bit about why did you guys still decide to go into the sector and pick this space and what are you’ll doing differently? What makes DealShare special?

Vineet Rao:

Absolutely. So let me start first on that, right. So if you look at the Indian evolution, right. You know, the market really started picking up you know, what 10 years back when a lot of people came on the internet, that was the first generation, internet users, more westernized and adopted E-Commerce also pretty well. That was the first wave of e-commerce. From the top tier cities, everybody starting to order a lot more than what it was before. But you know, the penetration really did not flow into the tier two tier-three cities as much and also into the middle income and lower-middle-income group. The first reason being, they were not even online at that time, the internet was very expensive, and it was something only for the sort of chosen ones, right. But since the last few years internet penetration has rapidly increased in India and it has pretty much brought the whole country online. So today, if you look at it, I mean, even if you go to a village you'll see people with mobile phones, you know, watching Tik-Tok or being on WhatsApp or watching videos or reading news and on Dailyhunt. So, I think it has opened up a much bigger opportunity than what it was. And now when you look at the consumption side of the market, India is an $800 billion retail market. Very soon it'll be the third largest retail market right, of the world. The difference between India and what you have seen countries like US and China is the majority of the consumption of that retail market over here is really grocery. So the grocery share of the market is almost 70%, it's higher than any other country, any other large country, like India. So when you have to think about e-commerce or when you have to think about bringing people online and getting them to transact you have to start where the relevance is very high. It has to sort of relate to the people in terms of their needs. Amazon became very successful in the US, by selling all the items that were highly relevant for the mass population. So, in India, actually, the sector that will make e-commerce really work is grocery, to begin with, right. And that is something that we validated right in the beginning. It was not something that, we just decided we are only going to do grocery. You know you look at the name also it's DealShare, right. We didn't start with you know, a name which was just grocery related. But we realized very quickly that majority of the need of the consumers, especially the mass market population, right. When I'm talking about 70% of overall retail, when you go to middle income and lower middle income, it's actually 80%, right. So everybody just wanted us basically to sell groceries to them. And that's where we decided this is a huge opportunity and if we are able to track this segment you know, it'll be bigger than anything else. I think the world has seen.

Gourav:

Vineet, I think that's a fantastic Segway into the next part of the discussion because I know that what Medda and you are building, is a little bit adapted to what we're seeing today, right. So talk a little bit about what makes DealShare unique and special and the approach that you guys have?

Vineet Rao:

Absolutely. So we said, right. I mean for e-commerce to be economically viable, that needs to be a very deep penetration into the market in any country, if you look at it you know, the strong success behind Amazon and Alibaba and US and China is because they were able to go very deep into the market and, you know, a large percentage of population started using it. Now, if you look at India you know, the mass population over here but like we already discussed you know the need of them is really groceries. Majority of their purchases are on a limited number of items, the consumption is on a small selection. They are not at a point where they really want a very large selection and they are going to buy from, many different classes of items. So that is where we really started with and this is also based on all the experiments we did. We realized that you know, we don't really need to sell millions of items to really capture all the demand. The demand can be captured on a much smaller number of items for the population. And that makes the DealShare very unique. We are not really are a model where we list any kind of or for all kinds of products because that actually confuses the users also.

The middle-income user is typically the one who's going to the Kirana shops or you know, small shops for other products as well. And they're tuned to not looking at too many different types of items before they make a buying purchase, right. So one thing that we did was keep very sharp assortment. And from that itself we got a lot of strategic advantages because we were able to aggregate the demand a lot more on individual products. We were able to go up the chain very fast. So in a typical retail scenario, you'll be moving slowly and eventually reaching the source, which is the manufacturer, or the farmer but our volumes were so high, right in the beginning that we were able to sort of start talking to the manufacturers directly. And that is how you really get the supply chain benefits and you are able to pass on phenomenal prices back to the consumers, right. Not only that, it actually enabled us to build operations in a very different way, a way that nobody had built before and something that we had to build it from scratch. So one thing that DealShare does very differently is all of our operations are done by us, we've built the model ourselves, for it to be extremely efficient on a smaller number of SKU’s, thereby driving you know, operations costs very low, right. That is also one of the fundamental themes behind DealShare.

Now on the demand side what you will see very differently is the user experience of the DealShare, right. It is very different than any other e-commerce company in India. It is built for the mass population. It is vernacular; we are in all the languages for all the States that we’re present in. Again with a smaller set of SKU’s, it's actually a lot easier. If I have a hundred billion products for me to convert it to every language in itself is a nontrivial task. But for us to have all of our contexts, depending on the language that you need is much easier. And the other things, what we have done in UX is just built comfort with the consumer, right. This is a very different consumer, you know people in tier-one cities are very busy, they don't have time. They're, you know, they want the convenience, but here people have time, they are very cultural you know, they are very friends and family-oriented. So, we build the whole experience that makes them very comfortable. You'll see, lot of things that we do, which is around gamification and sharing and people like to share, right. I mean, I'm sure all of you guys have your friends and family from other cities and you'll see lots of messages on WhatsApp, right. So these people really, their first time on the internet, they really like to share. It's like one of those days while I was in high school and you know, email used to be the fun thing, right. I mean, we all used to circulate jokes on email. Nobody does that now, but that's what WhatsApp is for them. Right. So yeah, it has been a very interesting and phenomenally exciting learning journey for us as we continue to work with you know, our consumer base.

Tarun:

Medda would love to get your input on this as well. So I know in various conversations we've had over time,  we ask ourselves what is the vision that we are building with, right? And five years out, 10 years out, what would you want to see DealShare become and we’ve spoken about how you guys really respect what PDD has done in China, or even closer on the back home, what has DMart done in India, more in the offline context. So talk a little bit about that, give us some color on what's the vision and where you see these DealShare and what elements may be of, of these two models that you are trying to build upon?

Sourjyendu Medda:

Yeah, so essentially, I mean, when we started the business, we knew the TAM that we are targeting is extremely large. It is next to 70-80% of India. And if we are catering to their essential needs, the business itself can become very, very big, however, what was not proven at that time. And, and none of the existing players had proven that is that this can become profitable and it can become extremely capital efficient. I think these were the two big tenets, which are not proven the market was already there. And from day one, what we have focused on is creating not only a big business, but also business, which is on the path to profitability on a fast path to profitability and extremely capital efficient, it will be, let's say five, 10X, better than any other player who has tried that market now, which also meant that we had to do something very, very, different, and so we looked around where the real money lies and we realized that from what the consumer is made to pay to what basically the manufactured product is actually costing for a lead brand, there is a huge difference. And that huge difference is neither benefiting the consumer, nor the retailer, it is going into the top brands pocket, or maybe the sales and marketing channels. Now that is what we attack. There are, I mean, fortunately for us, but a little bit unfortunate for the country was that these small manufacturers were not organized, they are not on one platform. There was very little even the authorities had done, like in other countries who bring them all together, they're also taking them national. I think what it does is increase the affordability of the middle-income population. So if you ask me one motto or one cause as to why I'm into this business: I want to increase the affordability of the middle-income population of the country. If they were buying three things earlier, they can now buy five and they can buy all of that from us. And eventually, we will have all the categories also represented, we are increasing the categories. And that would, in turn, get the country in the consumerism cycle. Now the economy will grow when they will be exchange of hands. And there'll be more, more and more of consumption. And that's the lead project. If you have to ask what we are essentially going to do, we essentially are going to increase their affordability by bringing the merchandise at low cost to them and bringing it all at their doorsteps. And again, like Vineet said at a very low-cost operation.

Gourav:

Medda and Vineet, I want to change track a little bit here. And we're in the middle of a once in a century event, right? So, I know you guys are in the middle of the thick of things. I think we'd love to hear a little bit about just how you are seeing consumption patterns change before and after COVID. We'll love your anecdotes and what you guys are seeing?

Vineet Rao:

Yeah. So, one other thing about DealShare, right. When we started this, you know while we grew up in Jaipur, currently, our families are in Bangalore and Mumbai. But we decided that we wanted to choose a smaller city and incubate over there, because if we are able to crack Jaipur, then we'll be able to crack the whole of India, right. So we moved over here and we started working over here. We built a team over here, we built the business over here, and then we started expanding. So very quickly we reach to you know, the largest city Mumbai, as well as, you know, cities with 50,000 population and believe it or not our model works very beautifully, whether it's a large city or whether it's a very small town. Right. But it is also something that we've built really grounds up. So just before the lockdown came-in, we decided that you know, we'll come over here to our main cities right. Which were at that time Jaipur and Ahmedabad and really figure outright. And since then we've been here essentially. And I think it was a really good decision because we did not know what to expect. And I think coming over here again, working very quickly with the government authorities, the government has been very supportive with us. And also, we built very good relations with the government over the last 18 months in the places that we've been in, again due to the nature of our business. And what we realized is that the patterns for the consumers were changing very rapidly, right. So for us, the demand really surged and people who are not even interested right now in terms of you know, trying online models would quickly ask each other in terms of, you know, how do I sort of order online? Right.

So, the education also, whoever were our consumers started becoming our influencers and starting to tell all their friends and family that, Hey, you know, you buy from here, right. Being here you know, also helped us solve the supply challenges very quickly, very fast. Now in places that we work with a lot with local manufacturers and contract manufacturers we were able to solve the supply-side disruptions very fast because the factory's right over here, right. While the national level supplies, continue to be highly disrupted, which we've seen in the organized retail, how much disruption there has been. I'm sure all of you guys, you know when you go into any of the stores sometimes you'll find sometimes you'll not find the product you need, but we were able to deliver you know the required products to our consumers very fast. And we were the only ones, frankly. So the dependability also got created fast, right. What we have seen is a behavior shift from just a convenience to a necessity. And I think that is something which would have happened for a long period of time, but it's happening you know, very rapidly. And I think once the behavior starts forming, and once consumers start appreciating about the benefits they're getting, whether it is for the price, whether it is for the home deliveries, whether it is just for the fun, I think that is going to you know, give disproportionate benefits in the post COVID world also for, for players like us. 

Gourav:

Very interesting, and Vineet, you mentioned supply, I want to pull Medda in over here as well because I know he drives a lot of the supply side of things. Medda, I know we have a unique strategy where we go to local manufacturers. What does COVID mean for them? Is it a positive, negative, when they're up against the larger FMCG players?

Sourjyendu Medda:

Yeah. So we can answer it in two parts. One is what is, what does it mean for them (FMCG players) during COVID, and what, what does it mean post-COVID? So during COVID, I think, so they obviously faced a lot of challenges because they were not very powerful enough to approach the authorities and get their facilities up and running, get support on in terms of transportation and all of that. I think that is where we came in with a lot of, help to them, most of them. I mean, every local manufacturer that we have worked with and we have deep relationships with most of them, they even know us personally, and they called us because they were struggling to start their setup and, and they did not know what to do. They knew for sure that there is demand in the market and even the national players were not able to service that demand. They could see a business opportunity for them, and yet they were helpless.

So we because of our good connection with the local authorities, and we were able to help a lot of them open up their facilities also get special permissions because they were essentially into the essential goods. But however, there was some confusion or the other where the local authority in that city or in that locality was not allowing them to open, or even if they're allowed to open they're open for only two days in a week, something like that. Some local nuances to that, all of that we could help. And as a result of which they could supply us much faster than the national. So we have some bit of national supplies as well. And that is why we know that the national supplies were disrupted a lot. So, I mean the local suppliers give us supplies before the national suppliers could give us. And I will not take the names of national suppliers. These are the biggest, the biggest in the industry. They could not service the demand of the city that we are operating in. Not just us, they were not servicing any other player. We checked, right? So, so that's, that's one part, I think they are navigating well now people like us have supported also these local suppliers with the prime minister and the government now talking of local suppliers and, and anti-China, I think coming-in and all of this happening this part of the business will definitely get a boost and it will get a boost because people will start noticing them. I think the government will also put in some more real efforts to bring them all together and make their lives better and give them more shops and all of that. And if platforms like us also grow fast and there are many more who join this bandwagon, I think it is going to be a very good journey for them. And that is how other countries have - I think if you look at the whole difference between a brand owner, earning more in this country versus a retailer, is because the organization of these small manufacturers has not happened. The moment you do organization of these small manufacturers with a concentrated effort, whether it's public or private, doesn't matter. The disparity between the incomes of a retailer and the income of a brand owner actually goes down. If you look in countries like US and China, the difference is much lower, in India it is much higher. The big brand owners on lot more than the retailers, now that disparity will go. And these local manufacturers will basically have a larger play knowing the economy.

Tarun:

I’ll just add one point on what I think Vineet said, due to the increase in digital adoption. I think just, you know, the reality is all of us know if I take a step back right, while there are a lot of short term disruptions that various e-commerce have seen including the DealShare, all of us realize that in terms of what this means for overall digital adoption, it has definitely added at least five years, right. In terms of what this means for digital adoption, it has definitely added at least 5 years, there’s a 5-year acceleration if not more - I don't know if you guys remember there was a SARS outbreak in China in 2003, in HongKong and China, and a lot of Alibaba’s growth actually came because a similar dynamic played out at that time, where people actually started going online, a lot of them, you know, manufacturers and your suppliers started going online and that triggered sort of massive growth phase that Alibaba went through. Even if you take the earthquake in 2011 in Japan, that was another reason why players like Rakuten for example, were able to really sort of penetrate digitally. And I think this is like I said, while I know it's very, very painful on the ground today, but you know, eventually, I do believe that is a known fact now, that this has accelerated digital adoption across categories and definitely in the categories that you guys are in.

Sourjyendu Medda:

Yes. I think one, one very good example is Ahmedabad, I mean, this tells us how people basically are reacting to the change in environment. In Ahmedabad, I know some of you might also know that sometime back they made cash on delivery absolutely no-no, and we were very worried whether the customers will really, So, for the first 10 days, there was no e-commerce, no Kirana, nothing. So the government said that there will be nothing, no business, even if it is essential. And then they came back saying that, okay, we will open, but there is no COD, there's only online payment. Now, if you look at our business, it was 99% COD at that time across all cities. And we were very worried as to whether we will lose business and how will people react? I don't know what they would take home. And, and to our surprise, people just started paying online. And these were guys who were never paying online. So, an event like this, like you pointed out Tarun, is going to change the way businesses happen. It is definitely going to change the way people react to various businesses and adoption levels. As you said, it is five years, maybe even more. The tech adoption is going to be really, really fast in the country.

Tarun:

Yep. Yep. 

Gourav:

I'll change track a little bit of the last set of questions. I think this is clearly one of the largest markets coming online, as you guys described. How do you think about your edge and Tarun would love to hear your perspective as well on how do you think startups can out-compete and win against the larger companies? So maybe we'll start off with Medda and Vineet then Tarun would love to get your view as well.

Sourjyendu Medda:

Yup. So I think the this entire change of environment means a lot of new things happening on ground. As far as business is concerned. Now, the edge that startups have over established over organizations is that they are closer to the customer base. The end consumer, they are basically building things with first principle basis and on the ground. And as a result of which that the real change, which is happening on ground is felt faster to a startup than to an established organization, which is basically doing a lot of reviews every day on the standard format and are still stuck with their strategies, which might be three years old. Now that agility of a startup will definitely allow the startups to basically move faster towards the changes and cater to the changing customer needs much faster than the bigger organizations. Apart from that, obviously, startups have much younger talent than what established organizations have. And this younger talent also comes with a lot of energy to do new things with a changing environment. And that adds to the advantage of a startup. And I think that is why startups are better poised, in a better position to cater to this changing environment, than an established organization, having said that obviously established organizations have a lot of capital and you never know what they would do. So the jury is still out there, to decide who will win, but obviously, it will be a good, good fight to have.

Vineet Rao:

Thanks Medda. I’ll just like to add a little bit, I think Medda covered it beautifully. I think we are definitely at an inflection point, right. I don't think there's any doubt about it. And I think COVID has just accelerated that inflection point, which would have been, sort of a two-year journey to a two-month journey, right. In terms of the changing consumer behavior and the network effects that are available over right now if you look at the market right now, right. You know, while we talk about players like us and then other players in terms of what they're doing with home deliveries. But I want to tell you that actually there are, I don't know, hundreds of thousands of you know, very small players which in a very hyper locality has started doing this, in our cities itself, I get so many calls of people trying to reach out to me and say, okay, you know, I'm only in Raja-Park and, I've already started delivering fruits and vegetables to all the people in the locality. I've created my own WhatsApp group and, you know, people just place an order and we deliver, right. And everybody's happy. And, we do like only 50 orders a day and so on.

So this inflection and earlier, you know, that guy used to be a travel agent, right. So, I think this massiveness of the market and customers sort of adopting to this and finding value into this is basically the inflection point we are at. And I think startups you know, obviously have an advantage, right? You look at any other country, you look at the US, you look at you know, China ultimately it was one of the startups at the inflection point you know, taking over the market, right. It was Amazon, it was Alibaba and as Medda said, the benefits startups really get is, they build everything based on first principles, they don't have any DNA, to begin with. So they build the DNA based on what they learned on the ground, right. For big organizations, you know, it's very tough - I was at Microsoft for 10 years, right. I mean in front of our eyes, we saw, Google take over the search space you know, Amazon take over the cloud space is and Apple take over the phone space. Microsoft actually had the technologies before them. It was not that, the didn’t have it. But it was all about how do you sort of learn every day multiple times a day and are able to react to it rather than put a six month or 12-month plan in place and execute on that right. I mean, for a market that is growing really fast, that does not work. And history has proven it's always a startup that wins.

Gourav:

Tarun what about you, putting your investor hat on?

Tarun:

I'll actually answer that question more in the context of DealShare.

I go back to the time when we were looking to make the investment decision in DealShare right? It was, we knew It was a big market. We knew a very small part of that market was organized. We also knew that a much smaller part of that was online. Technically, it sounds like a great market to invest in, as an early-stage VC. But what we also knew is that there are multiple players that have tried to make the model work. Some of them are around today. Many of them are not around today, the ones who are around today have still not, while they have been able to get a topline scale. It's. It is still a very challenging stage in terms of unit economic. They haven't been able to make the unit economic work, and hence, if you see, you know, typical once in terms of capital efficiency, it's more than been a sort of easy journey. And so I think, that was the context with which we evaluated, and Gourav, you were a part of that. We evaluated DealShare and said, Hey, is there something unique? And so, you know, maybe bringing together what both Vineet and Medda said is, what is a differentiation, because if you're trying to do the same thing that somebody else has done, and you're saying I am going to be implementing it better, or I'm going to be, try to do things more smartly or AI will work harder, that's never going to be enough. Right. Everyone talks about that 10X differentiation or the 10X user experience. Many of the companies today by the way are providing a fantastic user, it's actually the economics and the business model that you need to challenge. And so I think what I had liked about DealShare was, they’re differentiated model, largely I would say three or maybe four parameters, one starting with the way they solve, and thinking about the relevance of the category, the SKU range, to how that SKU, which basically dictates what the supply chain would look like and how simplified the supply chain is, because of the simplified supply chain, what kind of margins I can extract over the long-term and what is the cost at which I can deliver the product to the customer because I'm operating at an average order value, which is much lower than what the incumbents are operating at.

And then when you add the differentiated delivery model to it, and the differentiated TG for me that basically, the flywheel basically made sense, okay, these guys, while we're still very early on, a lot, needs to be proven but from a thesis perspective, I could very clearly see that this is a very differentiated model that is being attempted. And if it worked, it could actually solve a lot of issues around the business model for capital efficiency that we've seen at some of the other places. At the same time if this grows, the market that you're going after, which is the urban middle class and the lower middle class, both in urban cities and in tier two, tier three cities, is a massive segment that is actually coming online. They're already online, they're starting to transact online more. And so I think that was, in my mind - a)I look at differentiation and, b) secondly, what is the right to win, and, you know, we talk a lot about this internally, which is okay why is this, why is this going to work? Right? What are the reasons? And I think, between the team that Medda and Vineet have put together, and the whole background, I think with the experience you know, understanding of FMCG. It definitely did seem like an interesting sort of combination. And so, I think, no pressure Vineet and Medda, expectations are high and I know you guys have done a good job so far and, hopefully, you guys will continue to sort of execute on them.

Gourav:

I want to end with one fun question. And, you know, we'd love to get your views on one consumer behavior that you think would stick post-COVID and one that would not stick post-COVID. So we'd love to get your views on this, but Vineet why don't we start off with you?

Vineet Rao:

Sure. very, very interesting question over there. Right. So, I think consumers are you know, going to stick on the digital transacting platforms more now. So I do believe that you know, before that it was, let's just try it out, but now this and especially in India is very interesting because the COVID period has also been very long. So the lockdowns, it's not like many other countries.

Tarun: 

 It's only getting started. 

Vineet Rao:

it seems like it's only getting started, right. So, I think you know, a lot of them whether it is through just the social network you know, peer pressure or whether it's just through necessity I think have started doing a lot more things remotely. and I think you know if they're doing 50 things remotely right now, transacting online or meeting people, or you know whatever right. Doing WhatsApp video calls I think a lot of you know, that part is going to stick and just become a way of life, right. Whatever they found value in. They're not going to go back to the older ways, Now the thing that is not gonna stick I mean, people are you know, India if you look at as a population, right? I mean, we are very social. So right now everybody's sort of locked down, not trying to meet their friends and families, and you're having to do everything sort of reportedly. I think that part you know, you probably pick up very fast, right. Once the scale of COVID is done. And I think people will get out there. People will again become social. I think it will be six months from now, whenever right. When we pass this, this will just be a past thing. And I don't see culturally that we'll get different, right.

Gourav:

Yeah. Medda what about you?

Sourjyendu Medda:

So I think people would still- so like we saw in COVID during this period that people started purchasing larger quantities, but a lesser number of times, this behavior will stick around a bit. So people would as far as because they will feel that it is very comfortable. So they will suddenly get used to purchasing lesser no. of times, but a little more and getting some discounts and all of that. So that thing will stick around. And that is helpful for e-commerce because e-commerce will be able to give more value also. Like Vineet said, I think one of the answers on my mind was that people are social and people will start moving out. This means that obviously, people will start buying from physical retail. And that is why we are also looking at the online to offline model because that's a longterm model, one extra point I want to give because that’s already taken. So I think people love cash in India. And, there is some part of the cash that cannot go out because of the economy that India has. So cash will come in to picture, right now people are refraining from using cash a lot, but transactions in cash will come in again, while some adoption of online payments would happen.

Gourav:

Tarun, What about you?

Tarun:

So, I think you know, the good news is that there are a lot of time first-time buyers, that we are seeing, various reports that we read is saying that across categories, anywhere between, you know, 10 to 20% of customers are actually first-time buyers you know, which is great news. My sense is that it will, I don't think it will be easy for people to go back especially if this extends for some period of time, right? Because then you're building habits. So I do think that will stick and actually, you know Vineet, I remember in one of our conversations, you had actually made a very good point that how you serve the customer, who otherwise has not been ordering online. And in some ways it's almost forced to order online, right? That first time experience is so critical because, you know, if they were to come on a DealShare and for whatever reason you are stocked-out, or you can't deliver, or you said you would deliver it, but then you cancel the order later. And if you do that once, you know, maybe once they will forgive you, the second time they may not forgive you. But they'll never come back here because like you said, that a lot of these small shop operations that started in different cities where somebody was aggregating orders and delivering it to be a community, people have already figured out now, basically what is the new way, and so I think it is very incumbent on platforms like you guys, to these customers who are coming in for the first time, how do you build trust, especially where it is so hard for you to do that because you yourself are dealing with it. So, I think some of that, most of that hopefully will stick.

I think what will not stick as there seems to be an almost unnatural increase in certain categories. And I think, over time, we will go back to, for example, there's very little apparel sale happening, and that's obvious because people aren't going out much, but, you know, hygiene products are suddenly, gone through the roof, right. Or certain other categories have just gone through the roof. And I think that over time it will naturally go back to more standard consumption patterns. And so, a lot of people, while you take short term advantage of this, eventually, I think people will go back to sort of typically more standard practice. 

Gourav:

That's fantastic. Tarun, Vineet, and Medda thank you so much for doing this. And Vineet and Medda, wish you the very best as you navigate this time.

Vineet Rao:

Thank you. 

Sourjvendu Medda:

Thanks.

Tarun:

Thank you, guys, for your time. Really appreciate you guys doing this at this time. I know it's been a very busy time for you. 

Sourjyendu Medda:

Thank you. Bye.

 

 

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