Indonesia Wants Its Groceries Faster Than Ever

The concept of online shopping was established in 1979 by Michael Aldrich who initially invented the earliest e-commerce and allowed a b2b and b2c transaction. The idea then evolved and is used by countries all over the world, enhancing the popularity of online shopping. Advancement in online shopping did influence retailers and sellers in adapting to online platforms, the biggest impact can be seen from the grocery stores that are now known as e-grocery that successfully captivate the market. According to a study conducted by Bain & Company and Facebook in 2020, South East Asia's (SEA) grocery market is worth USD 350 Billion, a promising figure to its players, isn't it? 

Development of E-Grocery

Globalization, technological advancement, and digitalization are the factors that influence the development of the e-grocery industry landscape. In addition, the emergence of the COVID-19 pandemic, caused a shift in the customer shopping routines from offline to online.

This can be seen in some changes which affected the grocery sector:

The emergence of new startups in the e-grocery sectors 

Astro (Est. September 2021) , an emerging startup In Indonesia that offers a 15-minute delivery process, received USD$ 27mn in funding earlier this month. Another example includes the joint forces between Bukalapak as Indonesian startup Unicorn and CT Corp (Transmart) that will open its e-grocery platform soon.

Old Economy ft New Economy, a collab that is happening

Acquisitions and collaborations are coming from front players from various industries in Indonesia, as companies strive to understand and explore the ecosystem. For instance, Gojek had announced its minority stake in Matahari Putra Prima (MPPA) (6.74%) and Blibli's majority stake in PT Supra Boga Lestari (51%). Each company aims to expand its company scope by doing expansion through acquiring customer databases to understand and conduct a deep dive analysis of the e-grocery ecosystem, which paved easier channel distribution through their collaborations. 

Rapid improvements are made by current players to maintain its competitiveness within the industry through investment injection and an updated version of its platform 

Due to the increase in demand and popularity of e-grocery, Indonesia's e-grocery main players such as Sayurbox, Happyfresh, and Tanihub experience continuous growth and have recently received 5; 65; 65.5 million USD respectively. While the industry is quite young and prone to evolution, experts are hopeful that both incumbent players can satisfy consumers' demands. 

What does the future hold for this new grocery business? Statista predicted that by 2025 Indonesia's e-grocery industry is expected to generate USD 83 billion in GMV (+22.57%). This has attracted various numbers of players to join the fray, and thus we can expect continuous evolution coming from the industry. 

All being said, the competition in the sector is rigorous. There are constantly fresh innovations and emerging business models in the sector, while players in Indonesia have experienced rapid growth especially during the pandemic. Well, this brings us to the question, to which extent will the e-grocery industry continue to evolve?