Online grocers: Sophisticating a seemingly mundane shopping experience

Jakarta’s traffic woes have apparently spelled opportunity not only for transportation apps like GoJek or GrabTaxi, but internet start-ups such as HappyFresh too are aiming to save time for Jakartans, by shopping their groceries for them with a complimentary doorstep delivery.

That sounds promising, especially considering grocery shopping is presumably more like an errand to run for most urban dwellers. And in Jakarta, where traffic is worsening, the one-hour delivery promise sure makes for a delightful feature. Jakarta-based HappyFresh, being a pioneer in Indonesia's online grocery marketplace, is apparently off to a good start with a sizeable fundraising and partnering with a bunch of supermarkets, which in turn aim to benefit from the ecommerce sales channel.

HappyFresh believes that its target market largely comprises the urban-dwelling supermarket shoppers. In areas such as Jabodetabek, it represents a fairly big target segment. For instance, MarkPlus Insight research for the Indonesia Consumer Profile 2015 shows that up to 70% of the respondents buy their daily need items from hypermarkets and supermarkets in Jabodetabek. However, 56.4% of them also bought their groceries from traditional wet markets. The survey included 635 respondents from Jabodetabek region, aged between 15 and 59 years old. Nevertheless, it demonstrates the growing popularity of supermarkets and hypermarkets, as well as minimarkets too in cities like Jakarta.

Further, MarkPlus Insight Women Monitoring Report from 2014 showed that 87% of the women aged between 20 and 49 year olds prefer to cook their own meals, while the remaining 12% or so frequently bought their meals. The survey included 9,823 respondents from across 18 cities in Indonesia. More specifically, 75.8% of the netizens– those who access internet for more than 3 hours per day – cook their own meals, perhaps more appropriately representing online grocers’ potential target segment.

Source: MarkPlus Insight Youth Monitoring Study 2015, Face-to-Face Survey

MarkPlus Insight latest data from Youth Monitoring Report 2015 shows that across Indonesia, 36% of the youth aged between 15 and 34 year olds spend between IDR500,000 and IDR1 million on food monthly – whereby food mostly representing groceries. Further, up to 17.4% of the youth in 18 Indonesian cities spend between IDR1.6 million on food every month, while in Jakarta, their proportion is higher at 20.6%. Those who spend over IDR3 million on groceries in Jakarta is 5.3%, significantly higher than the national average of 1.9%.

The high-spending shoppers in urban areas, who are also avid internet users, are potentially the customers online grocers are more pointedly aiming. In Jakarta and a few other well metropolises, they may represent a sizeable market for online grocery portals, supporting expansion plans. HappyFresh has recently launched in Surabaya, apart from overseas markets of Kuala Lumpur and Bangkok.

HappyFresh, which has positioned itself as an on-demand service, much akin to GoJek or Uber, is aiming to not save time for customers but also provide an end-to-end ‘professional’ service with quality control and personalised experience.

 

Priyanka Shekhawat

priyanka.shekhawat@markplusinc.com

 

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