Online grocery sees surge

Online grocery sees surge

Super apps jump into B30bn local market

Mr Kang (third left) and Mr Segarra (second right) expect the market to bulge once Thais learn about its convenience.
Mr Kang (third left) and Mr Segarra (second right) expect the market to bulge once Thais learn about its convenience.

Online grocery competition in Thailand is expected to intensify this year as major super apps -- Line, Grab and Lazada -- are jumping into the market worth almost US$1 billion (30 billion baht).

Serious air pollution, free delivery and unavailability of plastic bags at stores are giving added impetus to online grocery business.

Line Man, an on-demand service under Line Thailand, on Wednesday announced it is joining hands with HappyFresh, an online grocery platform, to compete in the market.

HappyFresh is a mobile application and website that allows users to shop for groceries online, using supermarkets located near the customers.

The cooperation will see HappyFresh using the Line Man platform, which has a large base of customers in Thailand.

It followed Grab and Lazada, which launched grocery shopping services, GrabFresh and LazMart, respectively.

"Thailand has the highest penetration of online grocery shopping among the three countries in which we have been operating," said Guillem Segarra, chief executive of HappyFresh, the Indonesia-based startup.

HappyFresh also operates services in Malaysia and Indonesia.

In Thailand, online grocery accounts for 3% of the whole grocery market worth $30 billion, Mr Segarra said.

It is expected to rise to 5% by 2022 and 10% by 2025.

HappyFresh, which has been operating in Thailand for five years, sees online grocery shopping fuelled by people aged 25-40 with an average spending of $40 (1,215 baht) per ticket.

HappyFresh earns money from revenue-sharing with groceries, brand marketing and delivery fees from customers.

In 2019, HappyFresh raised Series C funding worth $20 million, led by the Mirae Asset-Naver Asia Growth Fund -- a joint fund between South Korean financial firm Mirae and Line parent Naver -- with participation from Line Ventures, Singha Ventures from Thailand and Grab Ventures, the investment arm of ride-hailing giant Grab.

In 2018, it joined hands with Grab to provide on-demand grocery service in Thailand under GrabFresh service.

Jayden Kang, chief strategic officer of Line Thailand who oversees Line Man, said 2020-2022 will be a period when Thai customers learn how online grocery offers convenience with free delivery via the Line Man platform.

"Online grocery is still nascent in Thailand and the main customers now are expats, white collar workers and condominium residents as well as housewives," said Mr Kang.

"With free delivery and urbanisation, the customer base is expected to broaden."

He said Naver, the parent company of Line and Line Ventures, is one of the biggest shareholders in HappyFresh, leading to the cooperation between HappyFresh and Line Man.

In the three weeks since the soft launch, HappyFresh has recorded average spending of 600 baht per visit on Line Man.

"HappyFresh can expand its new user base from Line Man, which has 3 million active users as well as 100,000 restaurant partners for food deliveries," said Mr Kang.

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