HappyFresh sees double-digit growth for Asia online grocery business

PETALING JAYA: Asia’s online grocery business is set for double-digit growth worth S$19 billion (RM55.3 billion) by 2020 as supermarkets and hypermarkets in the region integrate online delivery service into their business model to provide convenience to tech-savvy, time-crunched consumers.
Online grocery company HappyFresh said in Kuala Lumpur, spending power and credit card penetration are higher than in Jakarta, Indonesia and in general, people in Kuala Lumpur are more used to making online purchases.
“We are seeing an ‘uberisation’ of the retail industry in Asia. The outlook has never been more promising. Opportunities abound in this region with its sophisticated food-loving consumers, growing wealth and rapid urbanisation. The continued increase in mobile adoption and broadband penetration has helped boost our online grocery sales,” HappyFresh CEO Markus Bihler said in a statement yesterday.
He said ordering online for home delivery is gaining popularity in the region, with two out of five online shoppers wanting to receive real-time offers via their smartphones while they shop. As more consumers purchase groceries via digital platforms like mobile apps, HappyFresh has seen a tenfold rise in its mobile app downloads in the region.
The increased popularity of online grocery shopping in Asia has been fuelled by two social developments – traffic congestion and long working hours.
“Customers are also becoming very selective when it comes to quality foods. A Nielsen study shows that today’s shoppers are seeking fresh, natural and minimally processed foods with ingredients that help fight disease and promote good health,” said Bihler.
“This presents a big 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,” he added.
According to HappyFresh’s proprietary survey of shoppers across five countries, shopping patterns vary from market to market. For example, online purchase of groceries peak at about 5pm on weekdays and 10am during the weekends and Mondays.
About 75% of online grocery shoppers are between 25 and 44 years old, and the majority of online grocery shoppers are women. They place their orders weekly, and fresh produce accounts for 50% of every order.
Working mothers outnumber all other customers followed by young professionals and expatriates.
“As a differentiator, HappyFresh partners with supermarket retailers – particularly the small and medium enterprises who do not have the capacity or ability to invest in technology – to go digital and reach out to new set of customers.
“In other words, HappyFresh compresses a 2,000 sq m store floor in as little as a 4-inch smartphone screen,” said Bihler.