Honestbee, the Singapore-based online grocery concierge service, is aggressively expanding in the booming Bangkok market, touting its ability to deliver fresh products within one hour at the same price as consumers would pay in a store.
Honestbee uses motorcycles and a time-slot strategy to combat the atrocious traffic in the Thai capital, said co-founder and CEO Joel Sng, who has formed partnerships with traditional supermarkets and online retailers to reach a greater customer base in Bangkok via its web-based and mobile applications.
Its partners include Villa Market, K-Market, Thai Ao Chi Fruits, La Paloma and Wishbeer.
"What sets us apart from Amazon and Alibaba is our focus on localisation. We are very focused on being Thai because it does not make sense for a foreigner to come to Thailand and say, 'I am not going to learn Thai'. You have to be Thai and that is critical to our business," he told Asia Focus at the launch of its partnership with Villa Market in Bangkok in mid-March.
Localisation and collaboration are the keys to delivering on those promises, while building trust in online services and products is important to ensuring long-term growth, he added.
Joel Sng, co-founder and CEO of Honestbee, says people are much more comfortable about buying fresh products online than they were five years ago. Honestbee.com
"The team that we have recruited here are all Thai because most of the products we want to sell are from Thailand. So understating the local market and understanding what they want, the problems they are having, how we can help solve them, that is fundamentally what makes us different."
Having entered Bangkok in January, two-year-old Honestbee now operates in seven cities in Asia, the others being Singapore, Hong Kong, Taipei, Tokyo, Kuala Lumpur and Jakarta. It is also testing the waters in Manila.
Bounthay Khammanyvong, Honestbee's country manager in Thailand, said the local operation was growing "very strongly" when compared with other markets, while claiming that its one-hour delivery success rate in Bangkok was around 98-99%.
"For the most part, things are going smoothly with the delivery service while the new challenge for us is actually the rainy season … but we're getting used to it now," he said.
Apart from keeping delivery promises, Mr Sng said price management is vital to gain consumer trust. This has to be handled carefully via cost splitting and collective benefit strategies.
"Prices are extremely sensitive, where if you buy a bunch of bananas or toilet paper week in and week out it will eat into your income, so we are working together with our retail partners to make sure that we keep the prices low and affordable," he said.
"We only charge a small concierge fee and it is about taking bits from here and there so that the cost actually becomes insignificant to everyone. It is about spreading it out so that everyone is happy. Yes there is a cost, but it is something that is affordable and acceptable."
The company earns a commission from its merchant partners and charges customers a flat rate of 30 baht per order, with no minimum purchase requirements.
Chief marketing officer Pauline Png says data analysis allows Honestbee and its partners to tailor more offerings to specific customers. Photos: Honestbee.com
All of Honestbee's promises have so far held up, based on an Asia Focus investigation of ordering fresh products via the online grocery concierge service. The products did arrive, fresh, in under an hour, and at the same prices as at Villa Market.
Besides not having to battle traffic to get groceries, consumers no longer have to spend time picking out fresh products. However, some shoppers might still prefer a hands-on approach.
"The early e-commerce businesses educated the market on the benefits of buying online, and now that you can see fit to buy raw food, raw vegetables and fruits, the ability to trust a product like that is much higher when compared to five years ago," Mr Sng noted.
In order to gain and maintain trust, the company constantly tests and trains employees to make sure that the products they hand-pick are truly fresh and in line with what the customer has requested.
"They are constantly tested via online video tests, where every shopping trip that they do and every product they pick is rated by the customers. So we are able to track who is doing a good job, who is slacking off, and who needs to have a different type of training, so we are constantly trying to upgrade," Mr Sng said.
Honestbee's reach in terms of cities is now the biggest in Southeast Asia and it has the widest distribution of retailers in Asia. In Singapore it now offers everything from groceries to home and automotive products, pharmaceuticals and more. In Bangkok, it plans to expand its grocery delivery routes to cover the entire metropolitan area by June.
"We are going all the way up north (of Bangkok) to Rangsit and farther down south until we hit the ocean and by July or August we will be moving into another city in Thailand," said Mr Bounthay.
It also aims to expand its restaurant food delivery service, which currently serves the busy Thong Lor area only, to other central business district areas this month. Other services such as laundry delivery, now on offer in Singapore, are expected to follow.
"We are bearing down with more investment in Thailand. Based on what we've seen so far we have actually increased our expectation for marketing spending to about S$2-3 million to get us through to the next six months, so we are funneling a lot of resources here and we are planning to introduce a game charger in the market soon," he said.
Honestbee says its delivery success rate in Bangkok is 98-99%. Honestbee.com
Honestbee has also partnered with local players to develop an e-commerce community in a move to increase digital adoption.
"We have partnered with an insurance company online and a few others and the idea behind it is to get customers to go online because that is the biggest struggle for everyone right now," Mr Bounthay added.
"We want the online penetration rate to be as high as possible and if we work together we can actually get there and get everyone in Thailand to be like their peers in America or Europe where 70% of the people there are buying things online."
Honestbee now has strategic partnerships with frank, a Bangkok-based online insurer, and Orami, a local fashion e-commerce startup where Mr Bounthay was the former chief operating officer.
Pauline Png, Honestbee's chief marketing officer, said partners are important to address the main marketing challenge which is opening people's minds and changing their behaviour.
"There are a lot of things we can look at in terms of collaboration, such as education by creating content and trying to link partners and services together and educating consumers together, so that they will see the benefit of going online to buy different services or products on one platform," she said.
"We are also working closely with our partners on providing cross-promotions. With the data that we have, we look at what customers want, enjoy and like and we try to propose similar things to them and we do recommendations as well."
For example, if a customer has been ordering a lot of Japanese products, Honestbee will have that data and when a new restaurant partner comes on board, the company will send an invitation and promotion code for that partner.
"It is surprising that 99% of people are still not buying groceries online here since the benefits are very obvious and as a business and all e-commerce players, we should be educating the whole country," she said.
"Being stuck in traffic and going out for groceries is one hour that you do not get back from your life. That is the message that we want to send to people -- that there is a better way and we can do this together."