honestbee launches in Malaysia
By Anushia Kandasivam March 3, 2017
- Claims e-grocery market has great growth potential
- Enables partners to expand their customer base
SINGAPORE-based online grocery concierge and delivery service honestbee announced its official entry into the Malaysian market on Feb 28 after trial operations over the previous few months met with positive response from partners and customers.
Honestbee started in Singapore in July 2015 and began aggressive regional expansion after raising about US$15 million (SG$21.2 million) in its Series A funding round in Oct 2015.
[Correction: An earlier version incorrectly stated the Series A funding amount.]
Already in Hong Kong, Taiwan, Indonesia and Japan, the company set up its Malaysian website a few months ago to test the market, deeming it ready for a personal grocery shopper service.
Honestbee currently operates only in Kuala Lumpur, its fifth city, covering the city centre and some surrounding suburbs, and though there are plans to extend the coverage, Malaysia country manager Marianne Chuo said that there is no fixed timeline for the expansion.
According to Chuo, there are a few thousand active customers in Malaysia. Chief marketing officer Pauline Png added that there is no specific target for the number of active customers honestbee wants to acquire but the company wants to grow as fast as possible while helping its partners grow their customer databases.
Opening up the online grocery market
Though the e-commerce market in Southeast Asia is huge, groceries make up a tiny portion of it still. Png said double digit growth is expected for this niche until at least 2020. “We are only seeing the tip of the iceberg now.”
In terms of financial impact for businesses, Png said that the honestbee model works with brick and mortar retailers to bring them into the online space by providing digital marketing and other things “that help grow the business overall”.
“Some people may be initially afraid [to come on board with honestbee] because they think this will cannibalise their current business. But the more progressive retailers know that if they don’t go online they’re going to miss a whole market,” she said, adding that honestbee enables the retailers to obtain new customers and customers from new demographics.
“We’re not here to take away business or jobs. We’re here to work together to build a robust ecosystem for everybody.”
“In this day and age, e-commerce is something you cannot just push aside,” said Michael Tseng, category manager of Ben’s Independent Grocer (B.I.G), honestbee’s anchor partner. “In honestbee, our company saw like-minded people who can extend the experience of our grocers to their customers.”
Png said that there is still a need for brick and mortar as when it comes to groceries people need to see, touch and feel for themselves, but the combination of offline and online is what consumers and businesses require to make the most of the market.
Lukasz Piotrowski (pic above), group director of business improvement of Wine Connection, one of honestbee’s speciality stores, agreed, saying that though a lot of the time choosing wines hinges on personal taste and product discovery, a platform such as honestbee allows Wine Connection to reach more customers, including those who live abroad.
There is a segment of honestbee customers who live abroad but make and pay for orders to be delivered to people locally.
Leong Ka Mun (pic, above), marketing manager of JezRipe, a farm-to-table grocer that is diversifying from wholesale-only to include retail, said that honestbee has driven more individual customers to JezRipe, aiding in its acquisition of retail customers.
honestbee also considers itself a social impact business; the founders started it as a job-matching website but very soon realised that the best way to provide jobs was to create them.
“Because e-commerce is booming and the market was ready for online groceries, we decided to allow people to work as shoppers, creating a more sustainable way to provide jobs,” explained Png at the launch.
honestbee identifies hubs in the areas around its partner stores and provides people in those communities part-time and flexible jobs.
The platform works something like a marketplace; instead of offering its own products, it provides a personal shopping service at a range of partner stores. It is currently focusing on high- to mid-range and speciality stores.
In Malaysia, besides B.I.G, Wine Connection and Jez Ripe, these include specialty stores Shojikiya, Fareastflora.com, Cat & The Fiddle, Southern Rock Seafood, Wondermilk, GNC Real Food and Chai Huat Hin.
honestbee charges customers an RM5.99 (US$1.35) concierge fee for shopping and delivery. Customers are able to make specific requests about the groceries the trained shoppers choose, such as how ripe fruits should be and brand alternatives should the first choice be unavailable. The groceries are packed and delivered the same day, within the hour specified by the customer.
honestbee’s partners are charged a commission for the service. Piotrowski said that, combined with the business model and reliability of the deliveries, Wine Connection found honestbee’s commission fee was very attractive in the market because it gives the company the opportunity to expand its circle of customers.
“There is huge potential in the e-commerce grocery market so as partners, this is where we want to be,” he said.