Honestbee says suspending some overseas operations, cutting global headcount all part of ongoing review

Honestbee was responding to media reports last week that the company was running low on funds.
Honestbee was responding to media reports last week that the company was running low on funds.ST PHOTO: ALPHONSUS CHERN

SINGAPORE - Food and grocery delivery company Honestbee is suspending some of its overseas operations as part of its ongoing strategic review.

Some roles within the company will no longer be available, and about 10 per cent of its global headcount will be affected, a company spokesman said on Tuesday (April 30).

"We are halting our services in Hong Kong and Indonesia, as well as our food vertical in Thailand," he added.

"Our services in Japan and the Philippines, along with specific partnerships in other markets, are also temporarily suspended as part of this review."

The spokesman noted that the review was necessary to help the company focus and align its regional business and to enable it to better meet its customers' needs.

"The status of Honestbee's business in the remaining markets stands unchanged," he said.

Honestbee was responding to media reports last week that the company was running low on funds, and that it was looking to sell its operations to technology company Grab and ride-hailing app Gojek.

The home-grown company has reportedly been laying off employees, owing suppliers money and delaying payroll, among other signs that it was struggling to keep afloat.

 
 

Honestbee on Tuesday refuted and addressed these allegations in a statement.

It also noted that there have been reports regarding payroll delay for employees.

"We would like to stress that this is untrue. We will ensure that all employees across all markets, including Singapore, are paid in a timely manner," said the spokesman.

"In addition, we are also committed to fulfilling our financial obligations to all (contractors), partners and vendors."

Grab said in response to media queries that it does not respond to speculation while Gojek declined to comment.

Honestbee's statement also did not address the alleged sale.

A former employee who left Honestbee earlier this year told The Straits Times that the company held a town hall meeting last week to address media reports that funds were running low.

"It came as a surprise when I learnt about (what was in the media reports last week)," he said.

Bosses assured employees during the town hall that the company has sufficient funds for the next three months, he added.

Employees have been told during a regular town hall last month that the new hypermarket habitat by Honestbee launched last October was profitable and that the company is seeking to raise more funds, the former employee said.

He added that he did not get a sense that the company was not doing well when he resigned to take up a better offer.

As for the company closing down operations in other countries, he said it was "primarily because they were not performing".

Private companies such as Honestbee are not obligated to disclose its financials to the public, unlike listed companies.

Associate Professor Lawrence Loh of the National University of Singapore said: "Start-ups often operate in the domain that is not covered by good governance practices especially in disclosures and oversights."

"While it is reasonable to accord fledgling start-ups some space for unfettered growth, there are key risks for stakeholders like employees and investors," said Prof Loh, who is also the director of the Centre for Governance, Institutions and Organisations.

"We need to seriously strike a good balance between business growth and stakeholder protection."

CIMB Private Banking economist Song Seng Wun said that start-ups face low entry barriers into the industry but can find it difficult to stay in the game, especially as competition heats up.

Honestbee was one of the early movers during the rise of Singapore's on-demand economy in the mid-2010s.

Its competitors include RedMart, which was bought over by Alibaba-backed Lazada in 2016, as well as traditional brick-and-mortar supermarkets such as NTUC Fairprice, Cold Storage and Giant, which have a growing online presence and also provide deliveries.

Mr Song said: "More businesses are entering the industry. Whether it is for groceries or food deliveries, there is no shortage of companies offering (to take Honestbee's place)."