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News Article

Small Market Vendors Using Delivery Platforms

By Jan Hogewoning | Tue, 03/31/2020 - 17:26

As the country is told to stay home, food retailers have been struggling to keep up the usual flow of customers passing through their stores. While people will need to eat, COVID-19 or not, the fear of exposure is making them think twice about how to buy groceries. In recent years, the market for online order and home delivery for groceries has grown steadily. Supermarket chains are offering the service through their website, whilst delivery services such as Rappi offer it through their applications Last October, Uber Eats acquired the delivery platform Cornershop, another food delivery service for supermarkets.

The question is whether these applications offer a democratic channel for vendors. Not every chain is available through a platform, as of yet. More significantly, Mexico is a country of small to medium sized businesses, with endless market places with vendors stacking out their produce. Luckily, these channels are finding their way to Mexico’s markets too. At Mexico City’s Central de Abasto, the biggest covered market in the country, several vendors have taken up home delivery. In many cases this is still through a phone call, where the customer contacts the store and communicates their wishes, paying cash at the door of their home. Applications however, are also on the rise. One such is Scorpion Mexico, which last year launched an online delivery platform for practically any kind of product. The company was formerly principally a supplier of products to vendors themselves, which has given it the advantage of having a large network of contacts in the markets. The application works similar to others, where there is a minimal order fee. The advantage of an application is that it connects you to a much wider potential audience beyond the usual loyal customer base.

In the majority of cases, delivery platforms charge an extra fee for the delivery middleman. This makes the service more costly than heading to the store yourself. These costs can be a deterrent for those counting their pennies. However, as vendors from markets sign up, they may be offering produce that is cheaper than the supermarkets and therefore find that they are an attractive option. For vendors in Central de Abasto, the last few weeks have seen a fast rise in the use of online delivery, in some cases even doubling. It is worth contemplating how this service will stick to customers after we pass through the COVID-19 situation. What will it mean for market vendors as they suddenly have to cater to two types of clientele: physical and virtual? How will they have to modify their inventories to guarantee both? And what is going to happen in the short run with those who neglect to board their products onto online platforms? Lastly, what if the store loses its relevance as wholesalers skip them all together and take themselves to online platforms? The next months will be a testing ground that will provide clearer answers on what the future is to bring.

The data used in this article was sourced from:  
Excelsior, El Universal, Scorpion,
Photo by:   Pixabay
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst