Forum: Delivery firms need to evolve, keep pace with demand surge

An increasing number of people will have to order in food and groceries during the coming months.

The cost of ordering in can be exorbitant, especially if a person lives alone. For example, a simple packet of chicken rice can cost up to $14 after factoring in delivery costs. This is not sustainable, especially for low- to middle-income households.

Many supermarkets and other online shops have also been overwhelmed by delivery requests, with many companies either not taking any more online orders or delaying them.

Delivery companies need to step up their game. They need to relook their business models to lower the cost to the end consumer and improve delivery efficiencies.

They can take some cues from companies such as Amazon in the United States, which has ramped up hiring and will add 100,000 workers to support the surge in demand.

At the same time, it has taken precautionary measures to safeguard the health of workers and leveraged technology heavily to further minimise human interaction in the process of delivering to American households.

In a sense, this group of employees could eventually be viewed as working in "essential services", much like healthcare workers.

Delivery companies need to quickly expand their workforce, relook their pay structures and leverage technology more.

For example, instead of a low base and high commission salary scheme, which can jack up the delivery cost to the end consumer, they could consider paying delivery staff a higher starting base with less commission.

This is possible as there will be sufficient demand to cover the costs.

They should also tap various new government schemes which can help them reduce overheads and pass on savings to the ever-growing home-based consumer market.

Alvin Hang Woei Yau

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