First, it was transport, then it was food delivery and now we might be seeing the third great Southeast Asian tech startup battle when it comes to grocery delivery. Just a few short years ago, this industry did not exist, nor was it considered a major market as grocery runs were (and to some extent still are) commonplace weekly activities for most households.

However, that has all changed and more consumers than ever are moving to on-demand solutions with many startups entering this space. And it is a major industry, with overall grocery expenditure hitting US$344.1 billion in 2020. It is still an industry in its infancy, with online penetration for the grocery segment in Southeast Asia at only 1%, a region where mom and pop are still kings and queens.

This presents potential versus a challenge for the bold. And HappyFresh sees a lot of that in the industry and recently launched HappyFresh Supermarket. They are actively growing their dark store presence in the region, starting with Indonesia, Thailand and Malaysia. HappyFresh understands that weekly grocery shopping requires optionality and choice among multiple categories, especially “fresh”, hence the need for a larger range of assortments.


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We spoke to CEO Guillem Segarra about the industry in the region and roadmap for HappyFresh as they embark on a difficult battle ahead of them in this category.

HappyFresh Supermarket currently has over 15,000 stock-keeping units (or SKUs) of fresh, dry, and
frozen products in its inventory within three closely monitored temperature zones. Having been
launched in Jakarta, Kuala Lumpur, and Bangkok – and in the process of rapid expansion within
each respective market.

Congrats on the launch. How has adoption been so far? 

Our users’ adoptions have grown significantly since the HappyFresh Supermarket launched in the three countries. We see month-on-month growth in users of 300% and we believe the growth will continue as we provide the best service to our customers.

Grocery delivery seems to be growing competition in the region. How do you make sure HappyFresh stands out in a crowded field?

We truly see the importance of understanding grocery as a category – informing our ethos of providing a superior grocery-shopping experience, prioritising quality and value-for-money. We focus our business on purely grocery and aim to improve our customers’ satisfaction. We position ourselves to be the one-stop service for our consumers’ daily and weekly grocery needs, simplifying the experience for anything that ranges from freshly-picked produce, frozen food, all the way to personal care items in a single platform – with a focus on pre-planned weekly needs/large basket order value.

How do you overcome the usual challenges for the industry in Southeast Asia?

Consumers in Southeast Asia today are more price-sensitive as they seek more transparency and value-for-money when they shop online. They tend to try a few services before making a choice for repeated purchases, but user experience and service reliability will ultimately be a deciding factor. At HappyFresh, we pride ourselves on the high-quality wide range of fresh and dry products at competitive prices, ensuring the best value-for-money for our customers. 

As we continue leveraging our warehouses, we started to get a better understanding of the demand, one that requires a large range of assortment because of its weekly grocery shopping mission. Therefore, we have the foresight to build up larger facilities than most dark stores in the region. This allows us to stock more than 15,000 SKUs in each warehouse.

We are constantly listening to our customers in each country and thus, understand what are the top SKUs they require in their shopping missions. We crunch these data through our advance-demand planning tool to ensure the lowest out-of-stock situation without having an over-stocking situation to avoid wastage. This allows us to focus on quality and values for our customers in the long term.

Given your projected size of the market (USD 300 billion), which markets do you believe present the most potential growth?

Southeast Asia holds a tremendous opportunity for the online grocery sector. We see the potential in our key markets – Indonesia, Thailand and Malaysia. Second and third-tier cities in these countries are experiencing larger, exponential growth rates in the past 12 to 18 months, a byproduct of the leapfrog economies that they live in. We will continue to focus on the key markets as a priority as we look to expand our services deeper into each market, reaching more underserved and unserved populations and providing access to fresh, handpicked produce. 

What’s next for HappyFresh?

HappyFresh will continue to grow the number of facilities this year and beyond, to cope with the increasing demand with wider coverage. We are expecting to launch more than 100 dark stores as we expand in the region. We will also continue to focus our efforts on providing convenient and safe service, as we enhance our existing operating model together with the partnerships we already have with supermarket retailers across the region. This will unlock additional operational efficiency, as well as higher levels of service and quality controls to improve customer experience. We strive to continuously grow and eventually serve millions more households in Southeast Asia with fresh handpicked groceries.