Guillem Segarra shares his vision on the future of e-grocery. What role will HappyFresh play in it?

The last time we were in touch with HappyFresh, former CEO Markus Bihler had just left the company and Guillem Segarra was appointed to replace him.

In an interview with e27, Segarra revealed that there are two things that it has been focussing on in the past months: The first one was putting the company on the path of profitability and sustainability.

“The first decision that I actually made was to close down the Philippines and Taiwan operations because we don’t see any path to profitability in the way that we want to … We have been focussing in Malaysia, Indonesia, and Thailand for nine months now. Basically we closed the year 2016 by being profitable as a company in these countries,” he says.

The second one will be developing what he called a “groceries ecosystem.”

“I have a strong conviction that in the next five years, the grocery industry as a whole will change much more than in the past 50 years,” Segarra says.

“That involves not only the online or the logistics or the last mile of groceries, but overall retail business or retail model. I strongly believe that a combination of technology, data, customer experience, and profiling … combined with the physical network of stores or the supermarkets, is a winning combination,” he continues.

To find out more about his ideas, check out the edited excerpt of the interview.

What are the things that you have learned about the three markets you operate in?

 

I would say the key learnings had been on customer behaviours and customer triggers to do groceries.

I think we understood that on top of the relevance of offering a good transactional service, it’s equally important, if not more, to also tackle the social and emotional aspect of groceries.

So that’s why we also focus on putting added value and services on top of what we are developing to make sure that we also help people make the right decisions when it comes to picking the right product; that they are aware what is the best value for money, deals, or promotions in your area; that you get an alert when the price of a product that you want is on the best price; or even to tell you where the store nearby has the product that you’ve been looking for.

Also Read: [Updated] HappyFresh celebrates 2nd anniversary in Indonesia, embraces B2B with new service

Amazon has recently acquired Whole Foods in the US. How is it going to impact us in Southeast Asia (SEA)?

 

The next five years will be rapidly transforming for this industry, and I think things like Amazon and Whole Foods, or Alibaba showing that they have been working with physical stores for 18 months … it will do nothing else but act as a catalyst for the industry to also kind of speed up the development in SEA.

No one has any doubt now that the whole traditional retailer [industry], they need to rein in themselves. They need to embrace the new technologies that are available to understand the customers much deeper …

Ten years ago, the top spenders were the baby boomers who are more used to spend weekends in the mall, whereas now the generation that are taking over are the millennials. Millennials as per definition are mobile, a hyper-mobile and hyper-connected generation. It means one day they might be able to stop by the supermarket, and spend some time there to get inspirations in the stores, but at the other day they may not have time and will order online. And the next day they will just go to pick and collect because they are driving and they don’t have time to stop.

I think the winning combination here is offering one-stop solution that the hypermobile customers will like. It is exactly what Amazon is doing with Whole Foods and what Alibaba is doing with Hema.

So basically what HappyFresh is doing is giving traditional supermarkets a technological edge to compete with internet giants?

 

It’s a win-win for both parties, right? Supermarkets are very, very good at what they do, because they have been doing it for 1,500 years or even more (laughs).

They are very good at supply chain, bringing the best products to the customers, and very strong at in-store experience.

And the third one is that they are very good at pricing, promotions, and all of these.

Whereas HappyFresh is very strong in online marketing, customer profiling, [being] data driven. We are very strong on technology, front-end, application of digital tech, and last-mile (delivery, pick-up points, and so on).

If you put these two things together, the resulting business or retail model is really powerful.

What are HappyFresh’s plans to face this transformation, now that Amazon is in Singapore?

 

I absolutely agree that Amazon obviously comes here with a very strong retail model by themselves; it’s a pure play, that means they are going to have their own products served to customers.

And I do believe that that is actually a threat for the traditional supermarkets; having a player that is quite competitive price-wise, with the technological capabilities … The next step for us is to really speed up the gap.

From our side, we are putting lots of technology and resources to offer much better and advanced experience to the end-customers as any potential players that can come to the region.

Also Read: 5 reasons why HappyFresh stands out among grocery delivery startups

This pattern that Amazon is doing –an internet company acquiring a traditional grocery company– do you see that happening in SEA?

 

To answer that, it’s important to understand why Amazon did that. I think people will definitely see that Amazon will be benefited by the physical network to distribute their products, especially groceries … and that is powerful.

Because it is exactly what we have working with supermarkets as well.

At the same time, Whole Foods will benefit a lot with the e-commerce capabilities, understanding, profiling, and forecasting.

Whether this can happen here or not … Again, the US market is a way different market than here. Amazon had already built their network of sellers … they basically already have a big customer base.

Whether it will happen here … I think it’s too early to make an affirmation in a market like us.

What exactly is your vision for the future of e-grocery in SEA?

 

I imagine a world that is hyper-connected, and a world where you have a very personalised and curated service for everything we do. Because that’s what our generation wants. Generation over generation, their attention span has been narrowing, that’s why the services that are massively successful are very targeted, with curated content.

With groceries, it’s exactly the same. There are so many inefficiencies in the way we do groceries today; if we go to supermarket together, even though we have different tastes, we will see exactly the same products. We have to go through the same miles. Out of 20,000 products, what is relevant to us is only 100, 120.

I believe the future of e-grocery is a very targeted, personalised service that knows you … Not only that it will cover your basic needs but will also to give you these inspirations … what to put on the table for your kids, what is the value for money.

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Image Credit: HappyFresh

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