MyGroser stakes its claim as ‘a better way’ to buy groceries
By Dzof Azmi December 9, 2019
- Grocery market not winner takes all market space for at least five players
- Main competition is breaking habits, teach customers there's a better way to grocery shop
"It's six o'clock in the morning, I'm about to have a long day ahead of me - and I'm out of coffee," said Stephen Francis recalling how it all started. "I said, 'there has to be a better way'."
That 'better way' has led online grocery store MyGroser to where it is now. At the time, Stephen was running Arcis Communications, a PR and communications company that was already representing major supermarket and food supplier brands. He pitched to them his idea of a quality online supermarket, but the established players were lukewarm, saying "we just don't think it's that big".
Although it isn’t “big” yet, Stephen is now convinced MyGroser has what it takes to go head to head with nearly two dozen other online supermarket stores in Malaysia, including established players like HappyFresh, Tesco online and Jaya Grocer online.
“Worth every damned cent”
"I believe that there's space for at least five players," said Stephen. "The grocery market is not a winner takes all kind of market." He further posited, "one will be the super premium brand, one will be a mass market cheapest-to-win, three will be in the middle".
The fact is, global grocery sales by 2023 will be worth an estimated US$10 trillion (RM41.5 trillion), and Stephen's estimate is that Southeast Asia alone will be worth US$309 billion (RM1.28 trillion) by 2021, calling groceries in the region "one of the last free markets on the planet".
"Who owns the space in Southeast Asia? No one. And yet we are close to 700 million people, and growing a very young, mobile-first audience," he said, pointing to the potential. "We have good internet connectivity, we have an audience that is used to using technology to get what they want - and we are eager to try new things."
Stephen thus founded MyGroser two years ago, along with Michele Malini (who is also his partner at Arcis Communications), and Jeff Madina who was in private equity before. They then quickly roped in Alex Wong to be Head of Groceries, tapping on his experience as the former director of operations at Cold Storage, as well as being part of the founding team of Jasons Food Hall. "We've invested several million into this operation," he said, "And it's worth every damned cent."
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He calls this their “soil round” instead of the normal startup lingo “pre-seed” round with the intention of demonstrating hunger and full focus on delivering convenience, value and freshness, their key propositions to the market. “We wanted investors to know that we were serious. Too many players talk about what they want to do and try and raise - we are doing it. Skin in the game, name on the ground, full in,” he declares.
They started by building a supermarket in a warehouse. The ground floor of the warehouse in Subang has shelves, a freezer, a butchery, a fish station, and a bakery so that bread can be baked every day. The only difference is that only employees will "shop" there, fulfilling orders made online, before loading the goods into a van.
Investing in the bakery is an example of delivering freshness. Baked goods in stores are typically either a day or more old by the time customers buy them (unless they are baked on site). “With our quality and freshness focus, we had to ensure that when you order baked goods from us, we deliver them to you freshly baked. It’s a cost to us to invest in the basic set up but it is important as we offer a superior experience to our consumers,” he emphasises.
Customer service is about better lemons and customised chicken
They officially launched MyGroser to the public a few months ago. Stephen's review so far has been simple: "The response has been very encouraging."
As to why it has taken almost two years for them to launch the service, Stephen reels off a whole series of steps they have taken to prepare. From building their own technology platform to earning the trust of global brands and get them on board their vision of what could be, selecting a payments partner and training their team to be totally customer focused. “They had to see our seriousness and our commitment,” he says.
To illustrate MyGroser’s core mission statement of freshness and convenience, Stephen recounts the story of the grandmother and the lemons. An elderly lady had bought some lemons from MyGroser, but later called in to complain that she was not happy with them. The team at first was unsure why, which bothered Stephen. "This is something that we need to figure out, because she's taking the time to tell us she's not happy," he told his team.
So they grabbed another box of lemons and drive over to the customer’s place. It seems what was bothering the elderly lady was that some of the lemons were less ripe than the others. They then asked her to choose from what they brought over. "So she picks the 20 lemons and they made her happy," said Stephen. "This morning, she placed an even bigger order. That's what we're about."
MyGroser may have identified the simple Unique Selling Proposition for online grocers in Malaysia: customer service. And not even anything particularly innovative, just to bring it on par with what you can do in a real supermarket. You can choose your lemons. Or ask for the chicken to be cut.
"A lot of customers will order chicken from us, but leave no instructions (for our professional butchers)," he said. "We didn't understand why, then we realised that not a lot places really do what we do."
"You should be able to get the benefits of a traditional grocery store, the range, the quality," he argued, including the fact that the food should be delivered properly. "If you buy ice cream, it should show up as ice cream!"
60% become repeat customers
Stephen believes that this attention to service is what will make MyGroser a success. "In the last six weeks, 60% of the people who have tried us have become repeat customers."
As a result, Stephen has already looked towards the future beginning with raising a seed round. "We have just begun a fundraising round to raise RM2 million," he shares.
Two years after starting, it is the right time to raise funding. As Stephen says, “We have showed what we can do and demonstrated our thesis on being able to build a profitable business. We now have a clear path and timeline to predict that for investors based on actual sales data.”
The goal is to draw the right investors who can help MyGroser build a sustainable business. “Now we want support to grow.”
Part of that growth involves increasing the number of products offered from 9,500 to 12,000 while expanding coverage. "We (already) cover a large part of the Klang Valley area, but we want to really expand it further."
The latest thing on offer is ready-to-cook meals, where customers can select from a list recipes and MyGroser will deliver the ingredients required. "We are rolling that out right now, but we want to increase the menu items, and the variety of items."
At the end of the day, it’s about getting the customer to come on board. “Do you know what my competition is? Habit,” pointed out Stephen. “People are used to having to drive to the grocery store by themselves. We just have to teach them there's a better way.” The MyGroser way.