Growing market for e-grocers in Singapore
Investors backing local firm expect S'poreans to buy into online grocery shopping
Published on Jul 20, 2014 8:38 AM
Online grocery shopping is set to catch on in a big way here, believes Facebook co-founder Eduardo Saverin.
He is part of a group of high-profile investors who have pumped US$23 million (S$28.55 million) into local online grocery retailer RedMart.
"Grocery stores are not going away, but in today's digital world, consumers want to interact with retailers any time, anywhere, on any kind of device, including with their grocers," billionaire Saverin, who resides in Singapore, told The Sunday Times in an e-mail interview.
"I believe that time-starved customers like myself will increasingly value convenience in purchasing their daily essentials."
The online grocery business makes up less than 1 per cent of Singapore's estimated US$6 billion grocery market. In London, the online penetration is far higher at about 10 to 15 per cent.
While it will take time for Singapore to reach this level, Mr Ryan Lee, executive director and partner at SoftBank Ventures Korea, said that he expects to see "impressive growth numbers for RedMart in the foreseeable future".
His company, which also invested in Redmart, is a subsidiary of the firm SoftBank which was an early investor in e-commerce giant Alibaba.
RedMart was launched here in 2011 by Mr Roger Egan and Mr Vikram Rupani.
They had met here while pursuing their masters at the Insead Asia Campus. They started their business in a 3,000 sq ft warehouse in Pasir Panjang with one van and one staff member. Back then, the two founders even made the deliveries themselves.
They now have about 200 staff and will move into a 100,000 sq ft temperature-controlled warehouse in October. The company plans to offer fresh products like fruits and fish online by the end of this year.
RedMart's revenue is growing about 20 per cent month on month. Its chief executive Roger Egan said: "The culture here is to go to wet markets for fresh food, but we want to get people to trust that we can also give them produce that is even better. Our goal is to be a one-stop shop for grocery."
RedMart currently offers around 6,000 products but aims to increase this to between 10,000 and 15,000 by the end of this year. Three-quarters of their customers are locals, mainly women between 25 and 44 years old.
Supermarket chains such as FairPrice and Sheng Siong are also seeing more interest in their online stores. FairPrice's online transactions have gone up about 15 per cent this year compared with the same period in 2013.
It has about 45,000 active online subscribers - 20 per cent more then last year.
Sheng Siong, which launched its online store Allforyou.sg earlier this year, is aiming to offer more than 10,000 products eventually.