(Source: Business Mirror | February 9, 2016)
Increased mobile accessibility and broadband penetration are disrupting the traditional grocery-buying business model, enabling consumers to purchase groceries anywhere, at any time.
“We are seeing an ‘uberization’ of the retail industry in Asia,” HappyFresh CEO Markus Bihler said. “The outlook has never been more promising.”
Citing a report by Telefonaktiebolaget L.M. (Lars Magnus) Ericsson, Bihler said mobile penetration in the Asia-Pacific region (excluding China and India) reached 110 percent in the first quarter of last year, surpassing the global average of 99 percent.
“Opportunities abound in this region with its sophisticated food-loving consumers, growing wealth and rapid urbanization. The continued increase in mobile adoption and broadband penetration has helped boost our online grocery sales.”
HappyFresh is an online grocery delivery service provider based in Jakarta, Indonesia. Last year, the company completed a $12-million Series A funding led by Vertex Venture, the venture arm of Temasek Holdings, and Sinar Mas Digital Ventures, the venture arm of Sinar Mas Group of Indonesia.
“Ordering online for home delivery is gaining in popularity in the region. Currently, two out of five online shoppers want to receive real-time offers via their smartphones while they shop. We foresee a double digit growth ahead for the online grocery business,” Bihler said.
According to Bihler, since its inception, HappyFresh has seen a ten-fold increase in the downloading of its mobile app in the region.
“The increased popularity of online grocery shopping in Asia has been fueled by two social developments: traffic congestion and long working hours.”
Traffic congestion is a characteristic of most Asian cities, the company said. The Southeast Asian cities of Jakarta, Bangkok and Surabaya are in the Top 10 cities with the worst traffic congestion globally. “For this reason, few people want to push their way through a crowded supermarket after a long day at work,” Bihler said.
Asian countries also tend to have the longest working hours, according to Bihler sans citing a source. Asian countries, he said, have the highest proportion of people who spend more than 48 hours a week at work. This number is expected to rise as Asia becomes even more affluent, Bihler added sans citing his source.
“Customers are also becoming very selective when it comes to quality foods. Today’s shoppers are seeking fresh, natural and minimally processed foods with ingredients that help fight disease and promote good health,” Bihler said citing a study by The Nielsen Co.
According to him, this situation “presents a tremendous opportunity among niche consumer segments, especially in the healthy eating space and other categories that may be more difficult to find on in-store shelves.”
“As a result, a number of specialty retailers have emerged in the health and wellness space, from national online grocery delivery services with extensive fresh sections to local produce delivery services.”
— Dennis Estopace