Number of online grocery purchases 'set to soar'

Customers who want to avoid carrying heavy purchases may turn to online grocery delivery services. The Straits Times bought ingredients (left) for making Hainanese chicken rice to test four such delivery services, and the orders included 5kg packs of
Customers who want to avoid carrying heavy purchases may turn to online grocery delivery services. The Straits Times bought ingredients (left) for making Hainanese chicken rice to test four such delivery services, and the orders included 5kg packs of rice.ST PHOTO: DANIEL NEO

Customers cite convenience, quick delivery and extra services as pull factors

With the increasing popularity of online grocery shopping, lugging home heavy bags on public transport or making an after-work dash to the supermarket could soon become a thing of the past.

The number of such online purchases looks "set to soar", said Dr Brian Lee, head of the communication programme at SIM University's School of Arts and Social Sciences.

Dr Lee pointed to research by PayPal that showed that online shopping revenue in Singapore will be worth $4.4 billion this year.

"If we manage to reduce the number of cars on the road in future, more people may experience the inconvenience of waiting for a bus or taxi with heavy grocery items. Online grocery shops that provide fast and cheap delivery services will be in great demand," he said.

One online grocery retailer is Singapore-based RedMart, which was set up in 2011. Earlier this year, it raised US$26.7 million (S$38.2 million) in funding from investors such as Facebook co-founder Eduardo Saverin and Far East Ventures.

Chief executive officer Roger Egan said online grocery shopping "makes sense for Singapore with its busy working population and sophisticated e-commerce infrastructure". He added that the company's business has doubled about every six months since its inception.

More established supermarket chains are also looking to carve themselves a slice of the online shopping pie.

NTUC's FairPrice Online service was launched in 2002. Its deputy general manger, Mr Dominic Ng, said the service has been seeing an increase in customers of about 20 per cent year-on-year. It now has 135,000 subscribers.

Earlier this year, it launched a revised version of its mobile shopping app, with added features such as tabs and shopping lists. "We have seen an increasing number of customers purchasing groceries online, particularly with growing mobile penetration, and expect this to increase further," said Mr Ng.

With the growing popularity of e-commerce, even traditional wet markets are setting up cyber storefronts.

Online fresh food retailer PurelyFresh began life as a wet market vegetable store in 1998, and expanded to own both wet and dry markets in heartland areas like Woodlands, Sengkang, Punggol and Tampines. Earlier this year, it set up an online site, which is a "natural extension" of its market business, said chief executive officer Desmond Khoo. He added that the service has seen steady growth over the last six months.

The service's website lists fresh food products like yong tau foo, sea cucumber, squid, whole fish and seasonal exotic fruits like yellow dragonfruits and durian.

Most of the customers who shop online cite convenience as a major factor for doing so.

Marketing consultant Patrick Wong, 44, first used the services of honestbee about a month ago. Honestbee is a grocery concierge service that picks up items from stores such as FairPrice, and delivers them to the customer at no extra cost.

He said: "Originally, I used it to shop for bulky items, like cat food, diapers or cans of beer. But now, I also use it because of its next-hour delivery service, which means that if I want to cook something, I can order online in the morning and get my groceries by the afternoon."

Other customers shop online because of the extra services provided. Lifestyle blogger Shirley Tay, 50, has used PurelyFresh's grocery service five or six times.

She said: "I sometimes buy black chicken to cook tonic soup, and I like the skin to be removed. If I put a special request in the order, they will do it for me at no extra charge. It's pretty impressive. If you shop at supermarkets, you will not get this kind of service."

However, offline grocery shopping is not set to die out just yet.

Ms Regina Yeo, adjunct senior lecturer of marketing at the National University of Singapore Business School, said that while online grocery shopping "will slowly grow in acceptance and sales, it is unlikely that the sales will increase drastically for now". "Singaporeans are spoilt for choice when it comes to grocery shopping. Many supermarkets are conveniently located in shopping malls and within our neighbourhoods," she explained.

Mr Allan Chia, head of the MBA and BSc Business programmes at SIM University's School of Business, said that not being able to physically see and touch the products they are buying could be a hindrance for some people. He said: "For some consumers, the online experience increases anxiety and reduces confidence, unless they are shopping for regular items or brands that they can trust or are familiar with."

MORE REPORTS

A version of this article appeared in the print edition of The Straits Times on October 07, 2015, with the headline 'Number of online grocery purchases 'set to soar''. Print Edition | Subscribe