See the Online Grocery Service Competition Map in Indonesia

HappyFresh CEO replacement and sales RedMart Singapore to Lazada to highlight the end of 2016 which shows the severity of business competition Grocery online in Southeast Asia, including Indonesia. Looking at the existing competitive landscape, the business model that is likely to survive is affiliated with existing conventional retail players.

About 4-5 years ago, some tech players tried todisrupt supermarket business. They create their own inventory and try to be a supermarket that operates only online. Fast forward into 2017, most of them could not survive.

Only SeroyaMart remaining from the old regime and still selling guerrillas through several large marketplaces, although it seems that it no longer maintains its own e-commerce services.

This year there are at least 5 service players Grocery online in Indonesia. They are HappyFresh, honestbee, To Supermarket, Hypermarts, and Go-Mart. The latter is part of Go-Jek. ToSupermarket is j group that owns Ranch Market and Kresna Graha Investama, while Hypermart is an extension of the Lippo retail group managed by MatahariMall.

Although in terms of nominal business market share Grocery online is not yet significant in Indonesia, there is still confidence for them to exploit more in the potential in this segment.

Defining the business model to society

If you look at the product segmentation being sold, Grocery is an everyday item needed in every home, groceries. The segmentation is clear, household needs are generally managed by mothers or household assistants. Service provider implications Grocery need to adjust the maneuvering strategy (marketing, product delivery, etc.) in accordance with its market share.

Taking the case in Jabodetabek, the market is being dominated digital native and digital immigrants, but has a much different level of sensitivity to digitization. Mothers in urban areas, who tech savvy, generally career women and hand over household needs to assistants at home (generally non- tech savvy). Meanwhile, housewives who shop directly on a daily basis are still mostly categorized into: digital immigrants.

The pattern is becoming clearer, the product is becoming a necessity for many people, but the shopper has a level that needs to be adjusted and educated in adopting digitalization. The challenge is of course how to bring services online groceries to the majority segmentation.

An integrated approach needs to be done by redefining services online groceries more clearly, market it in the right medium and educate users from upstream to downstream. It's still too long to wait for the group digital native become the majority of consumers in the grocery product market.

Involvement of other components for service penetration online groceries

Through the millennium era, the growth of digital users in Indonesia is so significant, all surveys and researches state the same conclusion. The internet is a major factor, its ability to blend distance and time makes its users lulled. More specifically, internet services that are increasingly pampering are added with the penetration of smart devices that are no less high in numbers. However, the internet and smart devices would not be that popular without supporting services/applications in them.

In Indonesia, the popularity of digital in the real sector is mostly driven by the following things which provide education in a real way: native for the adoption of digital services in community activities, namely social media, e-commerce and on demand. People have become accustomed to communicating online thanks to social media, people have become accustomed to transacting online thanks to e-commerce, and people have become more confident in choosing application-based services thanks to on demand.

Back to market online groceries, this service trend will still be considered new, before the three things above (social media, e-commerce, on demand) form a new culture in meeting this need. Just like when people started leaving taxis for app-based services. As long as the culture has not been successfully embedded, the challenge is still very big, especially if it returns to the consumer segmentation.

It's only a matter of time, because the three things above are now starting to introduce the same system. For example, through Go-Mart, people who were previously very accustomed to using applications to order motorcycle taxis, will be accustomed to shopping using the services of these handymen. The e-commerce segment is no exception, which provides a wider range of services, with an increasingly diverse range of products and one-hour logistics support.

Yes, online grocery is estimated to still depend on the popularity of other services in developing in Indonesia. However, with minimal numbers in a limited area, online groceries still looks promising. HappyFresh once released a report which states the year 2020 total market Grocery online in Asia will reach more than IDR 182,4 trillion.

- Amir Karimuddin contributed to writing this article