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Alibaba-owned Lazada sees ‘unprecedented demand’ for online grocery in Singapore
A woman wearing face mask and glove pushes her grocery cart out of a supermarket after news of the raised outbreak of coronavirus became public people have been panicked to stock up on necessities as on February 9, 2020 in Singapore.Ore Huiying | Getty ImagesAfter a brief period of panic-buying in Singapore earlier this month…
A woman wearing face mask and glove pushes her grocery cart out of a supermarket after news of the raised outbreak of coronavirus became public people have been panicked to stock up on necessities as on February 9, 2020 in Singapore.
Ore Huiying | Getty Images
After a brief period of panic-buying in Singapore earlier this month amid the coronavirus outbreak, more people are said to be going online to purchase groceries and other items.
RedMart, Alibaba-owned e-commerce firm Lazada's grocery arm, said it is “currently seeing unprecedented demand” in the city-state.
Shoppers “have been buying 4 to 10 times more food staples, 3.5 to 5 times more paper products, and 2 to 6 times more personal care and household cleaning supplies,” James Chang, CEO of Lazada Singapore, told CNBC by email.
Chang said that RedMart's orders jumped when Singapore raised its disease response level to orange on Feb. 7, following a rise in locally transmitted cases. Orders on the online supermarket exceeded the company's weekly average by 300% as people rushed to buy in bulk, he said.
Even traditional supermarkets saw long, snaking queues that weekend, as people rushed out to stockpile household goods and canned food. Shelves were cleaned out and items such as toilet paper, cleaning products, face masks and hand sanitizers ran out.
To prevent another instance of panic buying, RedMart has implemented purchase limits on certain product categories.
Amazon, which has an express, same-day delivery service in Singapore, did not respond to a request for comment on this story.
Express delivery business Ninja Van said it saw parcel volume almost triple in February for the pharmacy and health category compared to a month earlier. The start-up is responsible for delivering a million parcels a day on behalf of some of Southeast Asia's biggest retailers.
“We have received more requests from customers in that segment to do more parcel pickups,” Ray Chou, country head for Ninja Van Singapore, told CNBC by email. “We have also noticed more of our shipping customers who are not in the pharmacy/health category starting to sell medical and health products.”
Singapore has reported a total of 96 confirmed cases of coronavirus since noon on Feb. 27, and 66 of them have been discharged, according to the health ministry. First detected in China's Hubei province, the pneumonia-like virus infected more than 82,000 people globally and killed over 2,800.
Delivery capacity a challenge
Fast delivery, sometimes done on the same day the order is placed, serves as an important distinguishing factor for e-commerce retailers.
During the brief panic-buying period in Singapore, delivery slots for RedMart and Amazon's Prime Now services took longer than usual. At one point, there were no delivery slots available on RedMart for the same week and users had to wait seven days or more to get their items.
“We increased delivery capacity and the situation has normalized,” Chang said, adding users could now get delivery slots within three days.
Still, delivery capacity remains the biggest challenge for the company, according to Chang. Lazada is still working to increase its fleet of vehicles and drivers to fulfill orders.
Ninja Van's Chou said his company has the experience, technology, and infrastructure to scale up operations quickly to meet demand. He pointed to special events such as the massive online shopping phenomenon known as Singles Day, which has allowed Ninja Van to “finetune the process to ensure consistency and predictability in the delivery experience.”
The trend for online shopping in Singapore is expected to continue growing as the country's internet economy was worth $12 billion last year, according to a frequently-cited industry report. Because of its high per capita income, average order values for online shopping in the city-state are three to four times higher than those in the rest of Southeast Asia.
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