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Vietnam, like most countries in Southeast Asia, is experiencing a rapid surge in middle class growth but at a rate faster than its neighbours. According to BCG, the ‘middle and affluent class’ is set to double to 33 million people by 2020 and earn approximately $714 or more a month.

Despite the slowdown of on-demand startups across the rest of the world, Vietnam’s developing landscape has been wide open for value-added services as more professionals in their late twenties and thirties move into their own apartments and pursue white-collar careers.

On-demand groceries and food delivery service MarketOi is one of few startups based in Ho Chi Minh focused on serving the increasing amount of individuals that can afford ‘status’ – expats included.

“It’s not only about being middle class, but also about showing that they’re middle class,” – Oscar Mussons from Dezan Shira & Associates.

eIQ talks to MarketOi’s partner, Nicolas Embleton, about how the company is tackling the ever changing market.

Southeast Asia’s “hip food scene”

The current “food commerce” startups in Southeast Asia – foodpanda, UberEats, honestbee, HappyFresh, etc. – are either delivering hot meals or groceries. MarketOi, founded by French entrepreneur Germain Blanchet last year, actually does it all.

Placed orders are fulfilled within an hour or less as separate in-house riders are based in each of Ho Chi Minh’s districts.

MarketOi “Hunger Games”-esque homepage

“Customers can order a pizza from a restaurant, a croissant from a bakery and a coffee at Starbucks within one order. We try to optimize the route by estimating cooking and preparation time, and sorting out the pickup order so that it makes sense in the delivery chain. The food has to be hot at arrival, and if it’s impossible, the customer is always notified in advance,” says Nicolas.

“MarketOi is a service, we have to do the best to make sure our customers get what they need.”

The company currently has 40 official restaurant and grocery store partners, with over 50 unofficial partners undergoing a trial period that typically lasts three months. MarketOi aims to reach 100 official partners by the end of this year.

“We onboard brands first to test their demand during trials,” says Nicolas. “If the feedback is positive, then we sign them as an official partner.”

Foreigners’ satisfaction about economic aspects in Vietnam and Japan. Longer lines indicate higher satisfaction. Graphics by HSBC

Today, 80% of MarketOi’s user demographic are expats and 20% locals.

On-demand food is notably popular among the stream of expats living and working in Ho Chi Minh thanks to the great “work-life balance” as reported by HSBC data.

“MarketOi is still growing, and since the founding team are foreigners ourselves, it’s easier to know what other foreigners want and become early adopters,” says Nicolas.

The platform services 500 active customers to date and carries out approximately 1,300 deliveries a month with $15,000 in monthly revenue. Since its launch last year, MarketOi has experienced 5% growth week on week.

The platform is also investigating delivery for things such as pet food and medicine, two areas where Nicolas sees potential.

“We essentially want to become top of mind for consumers when they need something in a short span of time,” he says.

As most service providers, convenience is key, but operating in a developing market like Vietnam is not without its challenges.

Scaling the on-demand business  

“The Vietnamese market is tough,” says Nicolas. “There’s a lack of brand loyalty and costs are high while margins are low.”

“Restaurants also feel the same pressure to fill seats in order to balance their high costs, but it can be tough in a city with low dining out preference for Western establishments,” says Nicolas.

“We offer restaurants a way to increase revenue without increased marketing costs,” says Nicolas. “MarketOi does the marketing and receives a commission for each partner order.”

It seems like eating out is picking up in Vietnam though, thanks to an influx of international brands but only for special occasions. The most common meal that the Vietnamese go out to eat is breakfast, with local noodle shops being the most popular option.

Only 7% of dine out destinations are at Western restaurants, including fast food chains McDonald’s and KFC.

Another interesting note is that more than a third of the company’s orders come through ‘chat app’, 30-40% from the website, and the rest from the MarketOi app. Not surprising as 9 out of 10 people access the internet through mobile phones in Vietnam.

Since majority of orders come in via chat, a MarketOi team is dedicated to answering customers and relaying orders to partners.

“Keeping the direct lines between us and the customer is important for an enjoyable experience but this system is impossible to scale because if our orders increase significantly, it will be difficult to manage the personal relationship with our customers,” says Nicolas.

He mentions that the company is currently working on in-house technology such as testing AI, processes, internal tooling and bots to help it scale.

What does MarketOi think businesses should know about Vietnam?

“Vietnam is a very ‘do it all at once, or not at all’ kind of country,” Nicolas observes. “Mass behavior is a thing here in Vietnam.”

For example, lemon tea shops were immensely popular a few years ago, and businesses filled each street with the same kind of shop, selling the same beverage and saturating the market.

This led to a fear of starting something new in Vietnam.

Government constraints are also a big hurdle for businesses that want to operate in Vietnam as noted by Raphael Wilhelm, SoNice.vn founder, one of Nicolas’s good friends.

“Paperwork takes time and the only way to speed up process is through local connections, which can be difficult to obtain for foreigners.”

“Sometimes, to get things done, you have to contact a friend of a friend in Ho Chi Minh,” says Nicolas. “It’s the way business happens around here.”

“Within the next year, we want to expand into another city in Vietnam and increase the speed of deployment. MarketOi’s advantage lies in the fact that the service is still very much needed here, but we are seeing a clear interest in other cities where it makes sense,” says Nicolas.

The MarketOi Team in Ho Chi Minh

Here’s what you should know today.

1. Jeff Bezos says Amazon will ‘keep investing’ in India as rivals raise new war chests

Amazon CEO Jeff Bezos has pledged to continue to invest in India as it bids to keep pace with rivals in the country that have landed large investments from big name backers.

 The prize on offer is a slice of one of the world’s fastest growing internet markets. India’s online population is tipped to reach 450 million-465 million people by June 2017, according to a report co-authored by the Internet and Mobile Association of India, thereby widening the audience of ecommerce customers.

Jeff Bezos’s tweet from earlier today

Bezos went public with his continued commitment to the country in a tweet that followed a meeting with Prime Minister Narendra Modi in Washington.
Read the rest of the story here.

2. Tesco launches one-hour grocery deliveries in London

UK supermarket chain Tesco has announced the launch today of a one-hour delivery service in central London called Tesco Now — echoing Amazon’s Prime Now delivery branding.

As well as a one hour delivery service (priced at £7.99), Tesco is offering a two-hour option (for £5.99) via the new Tesco Now Android or iOS app.  The supermarket chain already offered a same day delivery service in London and the South East, and a same day ‘click and collect’ option.

While Tesco staff will do the in-store picking, the delivery component of the service is being taken care of by UK startup Quiqup, which last month raised a £20M Series B round to grow its “shop on your behalf” app and b2b business.
Read the rest of the story here.

3. Recommended Reading: Dang Chang thinks he’s got the secret sauce for his delivery startup

Chang thinks the key to mastering food delivery without a storefront to lure in passersby is making delicious meals that people love. “If we can just make good food and get it to them fast, I think that’s the name of the game,” he says.

Even though on-demand lunch and dinner services are, at their core, food services, many have been the brainchildren of engineers and businessmen—”tech people,” as Chang calls them. These are people who don’t have experience in hospitality and team up with chefs to design a menu, but don’t necessarily value their ability to run a restaurant.

Read the rest of the story here.

Here’s what you need to know today.

1. Alibaba to lead $1b round into Chinese food delivery startup

Alibaba and its finance affiliate, Ant Financial, are in talks to lead a round of at least US$1 billion into Ele.me, one of China’s leading food delivery startups. The financing from Alibaba and Ant Financial will value Ele.me at $5.5 billion to $6 billion and help it compete with a rival service backed by Tencent Holdings Ltd.

Once completed, the deal would mark the country’s second-largest startup fundraising effort so far in 2017, surpassed only by ride-sharing giant Didi Chuxing’s $5.5 billion round.

While meal-delivery businesses around the world have struggled for profits, China’s two largest Internet companies see on-demand services as a way to promote their lucrative online payments services. Growth in domestic food and restaurant transactions also outstrips many other retail segments in the world’s second largest economy.

Read the rest of the story here.

2. Travel app Camboticket raises seed round

The ticket booking app received a US$100,000 investment from Obor Capital. Cambodia’s relatively small population means venture capital is scarce. It doesn’t present a huge market potential on its own. This has made entrepreneurs self-reliant, and sometimes forces them to wear multiple hats.

Founded in 2014, Camboticket sells tickets for buses, private taxis, and ferries for inter-city travellers within Cambodia and cross-border trips to and from neighboring countries, like Laos, Vietnam, and Thailand. It claims to sell an average of 6,000 seats a month.

Ticket sales aren’t its only source of revenue. Camboticket offers booking software for transportation companies to manage their operations and distribute seat inventory.

The startup is Obor’s first tech investment. It doubles as a test bed for the VC to explore opportunities beyond traditional investment sectors.

Read the rest of the story here.

 

3. Community Chatter: Magellan Financial Group chief executive Hamish Douglass calls Uber a Ponzi scheme 

Speaking to Fairfax Media at a financial conference in Sydney, Magellan Financial Group chief executive Hamish Douglass slammed the ride-sharing giant as “one of the stupidest businesses in history”.

“The probability of this business not going bankrupt in a decade is like 1 per cent,” Mr Magellan said, describing the company’s high-cost, owner-driver model as almost “valueless”.

Thoughts?

Read the rest of the story here.

 

Here’s what you should know today.

1. Alisports is bringing e-games to the Asian Olympics

Alisports, the sports affiliate of ecommerce giant Alibaba, announced that it’s partnering with the Olympic Council of Asia to bring e-sports to the 2018 and 2022 Asian Games, held in Jakarta and Hangzhou.

The company is betting big on e-sports, or competitive computer gaming.

It invested US$14.5 million to start the World Electronic Sports Games, an e-sports championship.

The global e-sports economy grew 41% year-on-year to hit a revenue of US$696 million, according to research firm Newzoo.

Read the rest of the story here.

 

2. K&N and Alibaba partner up to offer global logistics services

Kuehne + Nagel announced an MoU with Alibaba.com to offer global logistics services to customers of the Chinese ecommerce leader’s B2B business unit.

Alibaba.com’s paid members in China have been able to instantly obtain quotations, book pickup and destination delivery services for airfreight consignments via Kuehne + Nagel’s digital solution KN FreightNet on Alibaba.com.

The strategic partnership will draw closer cooperation between the ecommerce giant and Kuehne + Nagel with intent to expand the scope of logistics services on offer in the near future to cover the various modes of transportation beyond China.

Read the rest of the story here.

 

3. Facebook Messenger adds support for QR codes and food delivery services

Facebook has launched a few new features. Among those is an update to its M virtual assistant, which can now help you order food through delivery.com, the launch of Messenger Codes, which are basically QR codes you can scan into Messenger.

Users will be able to scan these QR codes at concerts, basketball games or other events and after you’ve scanned them, a Messenger bot will pop up to provide you with more information.

The codes means a business can have both a shopping and customer service bot, for example, and different vendors and developers can manage these separately. Currently this is only available in the US.

Read the rest of the story here.

Here’s what you need to know today.

1. Carousell launches new app for buying-selling cars

Carousell Motors was born out of Carousell’s acquisition of Caarly, a startup that connects customers with used car dealerships. The Carousell Motors app sports more detailed product listings than Carousell, which usually features a product and seller name, a photo, and a price.

Carousell Motors was built by Caarly’s team, which transitioned into Carousell Motors.

The new app will let buyers search specifics like make and model, specific dealers, financing options, and car depreciation. Car seekers can also compare different car listings and use chat to get in touch with dealerships directly.

Read the rest of the story here.

 

2.  SK Planet and Samsung enter an ecommerce partnership in Southeast Asia

The MoU, signed in Singapore, aims to promote Samsung’s brand presence and provide increased convenience and access to the Korean company’s products in Southeast Asia through 11street Malaysia, 11street Thailand and Elevenia in Indonesia.

The Samsung Shop-in-Shop page enables consumers to search, browse and purchase Samsung products easily, as well as gain access to exclusive online-only products and presale offerings.

Read the rest of the story here.

 

3. Malaysia’s Delivereat secures funding from Gobi Partners to expand to new cities

The startup scored US$450,000 in pre-series A funding from the Gobi MAVCAP ASEAN SuperSeed Fund, Gobi’s collaboration with Malaysia Venture Capital Management Berhad.

With the funding, it plans to expand to other cities in Malaysia and increase its marketing efforts toward merchants to boost sales. Delivereat doesn’t offer a new business model, and still faces competition from Food Panda, recently sold to Delivery Hero. However, the funding derived from the team’s ability to execute.

Read the rest of the story here.

Here’s what you should know.

1. Malaysia’s Dah Makan raises $1.3M seed funding for food delivery

Dah Makan is one of a new generation of “full stack” services in Asia, meaning that it manages all operations in-house — cooking, dispatches, payment, etc.

So, while FoodPanda and its ilk do their best to manage user expectants despite handing control of quality of product and timing over to third parties, Dah Makan keeps its service and system more manageable.

Deliveries are scheduled around a fixed window for lunch and dinner, with the last orders accepted 45 minutes before the time slots. That means a large amount of limitation for customers, including fixed menus.

The startup is eyeing moves into other parts of Southeast Asia before the end of the year.

Read the rest of the story here.

 

2. Myanmar sees rare series A investment with real estate portal Shwe Property

ShweProperty has over 60,000 home and apartment listings and over 350,000 visits per month, up a dozen-fold from 2015 when the site raised its seed round.

ShweProperty itself faces competition from Frontier Digital Ventures’ iMyanmarHouse and Rocket Internet’s House.com.mm.

Read the rest of the story here.

 

3. Recommended Reading: Amazon takes aim at how goods are shipped, starting at the manufacturer

The ability of forwarders to determine the best rates and speeds for shipping is oftentimes limited to a proverbial (and sometimes real) Rolodex. Online portals where manufacturers can track their shipments are largely unknown. Stop by one of the many freight forwarders who offer their services in a port city like Shenzhen and you’re almost certain to see a fax machine humming.

Amazon thinks technology can eliminate some of these pain points.

Read the rest of the story here.