Demand overwhelms grocery-delivery services in Malaysia, Singapore

Online grocery-delivery services in Malaysia are facing overwhelming demand, with some firms forced to suspend or limit delivery operations.

A 600-per-cent spike in orders recorded last month was fuelled by panic buying while stay-at-home orders remain in force throughout the territory.

Jaya Grocer suspended online deliveries in response to the surging demand, while Tesco is still operating as usual but has requested customers who have pre-booked delivery slots to cancel orders if they expect not to be at home so as to free up resources for other buyers. Restrictions have been put in place allowing only three items per customer across every product line.

Local hypermarket chain Mydin has asked customers to avoid panic buying due to delays in restocking supplies. It has placed restrictions on buying to ensure that all customers can make purchases.

“This situation has stemmed from the sudden growth of demand, and hypermarkets and grocery stores were not prepared for this outage,” said Malaysia Retail Chain Association VP Datuk Liew Bin. “The delivery team could not complete their rounds, although some of them work from morning to night to deliver all the customers’ orders.”

Liew added that many independent sellers and small farmers now have found their own way to sell their goods, with some trading directly with buyers via instant messenger apps such as Whatsapp and food ordering platform Oddle.

The situation is similar in Singapore, where Lazada’s RedMart e-commerce grocery unit refused to accept new orders for a period earlier this month. The Singaporean public had been advised by the island’s government to purchase groceries online.

Online grocery-delivery services “now have to deal with a new situation where demand for essential items outpaces operational capacities,” said Insignia Ventures founding managing partner Yinglan Tan. “Players that manage shorter supply chains may be more equipped to handle the stress.”

Shoppers “have been buying four to 10 times more food staples, 3.5 to five times more paper products, and two to six times more personal care and household cleaning supplies,” said Lazada Singapore CEO James Chang.

Since the temporary suspension of operations, RedMart has limited orders to 35 items, blocked customers from adding items once an order is placed, and has stated that orders exceeding 100 kg may be canceled.