#Asia Amid diversity and market differences, Indian and Southeast Asian e-grocer platforms can learn from each other


Grocery e-commerce business can learn from the experiences and nuances of established players (and even lessons from failures) across the region

Despite the diversity of cultures, there are similarities in the consumer mindset and business challenges between Indian and Southeast Asian countries, creating an opportunity for businesses to work together in spaces that pose common challenges, such as the online grocery retail sector.

Currently, within the online grocery retail sector, four countries show major potential: Singapore (advanced), Thailand, Malaysia, and Indonesia. Meanwhile Philippines and Vietnam are in early stages of adoption with under-penetrated modern retail trade.

Myanmar, Laos, and Cambodia, remain small economies with majority rural population, which serves little for my analysis of online grocery retail sector. Hence, for rest of the article, I will consider the trends mainly for first four countries mentioned.

Also read: Online grocer grows personal data protection along with business

The similarities between SEA and Indian market are as follows:

The new consumer

The Southeast Asian economy is expected to grow at the rate of 5.5% by 2020, with a thriving middle class and urban population. The growing wealth and affluence among the urban section is a key driver in fuelling the consumer habits of convenience, value, and better buying experiences.

Same is the case with India where consumer segment driven by middle and upper middle-class that is populating major metros. This section, with an affluent lifestyle, strives for a convenient, rich and valuable buying experience.

Consumer decision journey

SEA market has witnessed the rapid adoption of smartphones and the internet, which has created an always-connected ecosystem. The new working class makes more informed decisions, hence, creating a new buying journey, from searching products, comparing prices, finding the best deals, deciding when and where to buy from to delivery and feedback sharing.

A lot of this is driven by population between 22-34 and new internet users. India stands a bit ahead in mobile and internet penetration. However, the resultant consumer behavior is quite similar to the Indian population which starts its buying journey by internet search and showrooming.

Online grocery retail: drivers and challenges

Drivers: Convenience is the key to online grocery retail in both Indian and Southeast Asia. In Southeast Asian cities like Jakarta, Bangkok, and Surabaya, heavy traffic conditions and long working hours have fuelled the online grocery purchases.

Overall, the entire Asian market is considered to have long working hours (more than 48/week), which creates the need for purchasing grocery anytime, anywhere and on the go. From the Indian scenario, consumers are most impacted by a convenient purchase and delivery of quality products.


Price: Both markets have price-sensitive consumers who search for deals and discounts and look for better prices as compared to brick and mortar stores. Since the availability of traditional brick and mortar stores is high in Southeast Asia as well as India, price still remains a key differentiator to choose an online portal over a nearest brick and mortar store.

Also read: et’s dispel the 5 myths about online grocery shopping

However, from an Indian perspective, the heavy discounts offered by many online grocery retailers have rendered huge loss to businesses, making them unsustainable and in many cases, defunct. Hence, playing on price would not be a wise strategy for any business aiming to retain customers as well as business.

Payment: Online payments remain a point of concern in Southeast Asia as well as India, where in lesser developed areas, consumers are more skeptical of using online payment systems. The Indian businesses have tackled this problem with an option of cash-on-delivery.

Quality: The quality of products delivered is given high importance in both South East Asia and India. Customers are becoming highly selective in choosing brands in packaged food, while they want vegetables and dairy products to be freshly delivered at door step as per their need. This adds complexity to inventory management and supply chain process. However, this also creates an opportunity for small and niche online grocery retailers who focus only on a particular type of product/service (only dairy or fresh produce).

Online grocery players

Most of the online grocery players in Southeast Asia follow an asset-light model where they maintain some inventory and collaborate with hypermarkets and other smaller stores to service orders from customers. HonestBee, RedMart, and HappyFresh are some of the top online grocery players in this region that operate on a similar model. A lot of them have received substantial funding and have expanded outside their country of origin.

The case with Indian online grocery sector is a little different. It started with many big and small businesses following an inventory-led model, which was not scalable. This along with heavy discounting model-led a lot of businesses to downsize or shut shop. Currently, the market has some key players who still operate on an inventory-led model and are mainly operating on venture capital backed funds.

Some innovative companies have moved to a hybrid model wherein they tie-up with local hypermarkets and big retailers to service their orders. ZopNow is one such player that has invested in optimizing the whole process along with a robust technology implementation that creates a “virtual warehouse” with zero capital expenditure and where delivery cost is lowest given relationships with large physical hypermarts in prime locations.

The takeaway: Lessons to be learned from each other

With such similarities in consumer behavior and challenges in the online grocery segment, there is a great opportunity for the Asian players to collaborate and learn from each other. For example, ZopNow has now opened up its SaaS solution for retailers and hypermarkets to enable an optimised inventory management and supply chain system.

There is an opportunity for Southeast Asian market to leverage such expertise, while ZopNow can learn the nuances of using its process knowledge and technology expertise in the context of a broader and diverse market such like Southeast Asia.


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The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your post here.

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