Boozeat delivers alcohol to your doorstep
By Anushia Kandasivam May 12, 2017
- Aggressive marketing needed to root itself in home market
- More e-commerce opportunities available in the market
WITH food delivery a common practice nowadays, it is only natural that alcohol delivery finds a place in fast-paced modern lives. Malaysia-based startup Boozeat caters to this need - the online platform enables users to order a range of alcohol for home delivery.
Boozeat buys its stock directly from the distilleries, wineries and breweries to sell to consumers. Founder Jessie Chong says that the startup’s core business is alcohol delivery, working directly with the brand owners to allow the consumers to pay less and drink better.
Chong was formerly with Moet Hennessy Diageo Malaysia in the marketing department. Working there is what gave her the idea for Boozeat.
“Brands have high marketing costs, and spend time and money on events or digital marketing but tend to reach the same people all the time. This is a problem when you want to reach new customers. I realised what was needed was a platform that could drive additional marketing value at efficient cost for the brands and allow customers to come directly to brand offers,” she reveals.
This additional value and the ability to reach the customers directly is what convinces brands to get on board with the platform, says Chong.
The reason Boozeat buys from the brand owners is simply because the latter are not interested in a business to consumer plan. Small orders are inefficient while a platform that can manage its own inventory has faster turnover.
“For big brands, the fewer touch points they have, the higher volume [of sales] they have. Their focus is on product quality and branding, so it’s not in their interest or their strength to have their own platform,” Chong explains.
Quality and value
The platform, therefore, acts as a bridge between brands and consumers. While the brands benefit from this additional channel to the consumer, the consumer benefits not only from having guaranteed quality and convenience but also a certain value for money.
A single bottle of a spirit on Boozeat is cheaper than in a hypermarket, and it is possible to buy multiple bottles, depending on the item, at wholesale prices. “Usually, you would have to be a trader or distributor to get those prices,” says Chong.
Consumers pay RM9 for same or next day delivery. Chong emphasises that this still makes Boozeat a good choice because consumers are paying for the convenience and, more importantly, the product quality. While consumers can be sure that the alcohol they buy at hypermarket chains is the genuine product, there is a high chance that alcohol bought at standalone bottleshops are counterfeit or ‘parallel imports’.
“We are legitimate and serious about this business, and we see a real need to solve the problem [of getting good quality products at a reasonable price] that consumers face,” adding that with Boozeat, consumers can also get promotions directly from the brands.
“There is no better alternative than Boozeat. We offer the best prices, product quality, authenticity and convenience. You are getting what you pay for. There is no one that is comparable to us in that sense.”
Boozeat is gunning for 5000 active users on its platform by the end of the year. This may seem a small number given that the startup is about three years old, but Chong explains that Boozeat is only now going to put more efforts into marketing and reaching out to potential consumers.
The startup was bootstrapping until getting investment from private equity firm Idea River Run in October 2016 – Chong declined to reveal how much - which enabled it to expand its team from four to 12 people, meaning it now has the manpower and resources for more aggressive marketing and expansion.
Part of the plan is to start working with affiliate partners to drive more online visibility and reach out to more visitors. Boozeat will also be conducting more on-ground activities such as food and beverage pairings and tasting events as part of the Secret Menu feature on the platform.
More exciting is the opportunity for a strategic partnership with one of Idea River Run founder Vincent Lee's companies that will give Boozeat inroads into several Southeast Asian countries.
Boozeat is in discussions with the potential partner now, so there are no concrete plans as yet but Chong reveals that the target timeline is to have the first rollout by the third quarter of this year and the first country Boozeat will venture into will be Singapore.
“We will leverage on their infrastructure to expand into Southeast Asia, meaning we just have to put in our technology and they will support us with their local infrastructure,” she explains.
“There are a lot of good synergies here.”
Boozeat is currently looking to raise funding for this expansion into Southeast Asia. According to Chong, it will need US$800,000 to complete the first phase of its expansion plans.
Meanwhile, the startup is also concentrating on getting more deeply rooted into the Malaysian market. “Honestly, we haven’t done enough customer acquisition exercises or marketing per se so not many people know about us. We are confident that once people know about us and try our service, they will come back as continuous customers,” says Chong.
Chong believes that raising the funds will not be a big challenge given the growth Boozeat has shown in the past year; the startup hit 70% of last year’s revenue in the first quarter of this year. “Given the stage we are in, our transaction and traffic sizes, we are so ready to field the growth,” she says.
With the funding, Boozeat is setting its target revenue for this year as 10 times that of last year, a target Chong says is achievable.
Long term, there are more opportunities that Boozeat can provide for both brands and consumers, such as becoming an e-commerce distribution channel. As Boozeat already works directly with brand owners, there is an opportunity to distribute to bars and restaurants.
Chong says that Boozeat has an advantage over traditional distributors as it will be able help bars and restaurants acquire customers digitally and provide additional value through promotions.
However, this will not happen for another two or three years. Though this plan has the potential to disrupt the market, Chong says that selling cheap or throwing the market into disarray is not the key game. Instead, Boozeat has to work closely with the brands to ensure that brand value is not cheapened and the startup is really able to drive good value to all parties.