Qatar was quick to make strategic supply chain re-adjustments after the outbreak of COVID-19 pandemic. The country signed agreements with 14 food companies in May 2020 to raise the state’s strategic stock of food commodities, which is considered sufficient to cover demand for a year, leading Advisory firm ValuStrat noted in its report on the ‘impact of COVID-19 pandemic on the retail market of Qatar’.
The country witnessed a significant increase in demand for food and grocery products in March 2020 due to panic buying in light of uncertainty regarding social mobility measures. There has been a surge in demand for online grocery shopping as social distancing became the norm and many residents opted for more convenient ways to acquire essentials.
In light of increased demand, delivery times for grocery items notably expanded. Hypermarkets planned to increase the capacity by approximately 25 percent to cater to the increasing number of daily online orders. There have been challenges in the supply chain of non-food items. Hypermarkets had to change suppliers and adjust supply chain, as the majority of the merchandise was sourced from South Asian countries that also had restricting social mobility measures in place.
During March and April 2020, limited hindrances to food supply chain were observed due to the existence of buffer stocks. There were some major readjustments to non-food supply chain due to existence of strict social mobility measures in exporting countries.
According to experts at ValuStrat, retailers of nonessential products will have to realistically forecast sales in the medium term to take into account changes in consumer demand in order to adjust supply chain routes so shortages or inventory built up can be avoided. Logistical challenges might also arise in the coming months. There is a projected fall in the workforce within the short to medium-terms, and due to the existence of social mobility measures, logistical footprint will have to be planned out in order to reduce delays in ‘last mile’ deliveries to consumers. In addition, more businesses will be looking into E2E (End to End) or O2O (Online to Offline) supply chain visibility and resilience.
All of this will have to be taken in account, to make necessary changes in supply chain and support the growing e-commerce sector. ValuStrat noted COVID-19 has boosted e-commerce in Qatar.
Citing the Ministry of Transport and Communications (MoTC) data, it said in 2019 60 percent of the consumers in Qatar had a desire to shop online. This referred to the extensive potential it had pre-COVID-19. Due to the pandemic, e-commerce got uplift as consumers forced to stay at home were motivated to rely on online channels.
