Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Focusing on Asian logistics, transportation, and travel companies

Asian Equities Analyst, Logistics & Transport

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In recent years, in both the US and SE Asia, there have been a number of large, new, well-funded ventures that promise customers a broad selection of popular consumer goods delivered to their doors in a matter of hours (or minutes, in some cases) at prices that are very similar to what mainstream grocery retailers charge. The booming online grocery delivery segment has caught the attention of giants from both the traditional retail and e-commerce worlds, with sizable investments from <a href="https://www.smartkarma.com/entities/787" target="_blank" data-smartkarma-citation="entities:787:1">Alibaba Group Holding Ltd (BABA US)</a>, <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.Com Inc (AMZN US)</a>, and <a href="https://www.smartkarma.com/entities/11134" target="_blank" data-smartkarma-citation="entities:11134:1">Wal Mart Stores Inc (WMT US)</a>.The basic idea behind all of these ventures is not a new one: decades ago, our grandparents could pay a modest fee to have groceries delivered to their homes by the local store. And in the 1990s the “dot-com” bubble produced several high-profile ventures that promised speedy home delivery of virtually anything you could purchase on the Internet or in a store, usually without charging any delivery fee.However, almost all of those 1990s startups failed -- sometimes spectacularly -- and one of the purposes of this note is to answer the question, ‘What, if anything, is different this time around?’ After performing an autopsy on some of those failed “dot-com” companies, we also examine a couple that managed to survive the painful winnowing of dot-com wannabes and grow into profitable, well-managed companies.By analyzing these losers and winners, we can identify a few keys to success for today’s crop of US and SE Asian online grocery startups (as well as approaches to avoid). We then use these same criteria to determine which of the  new online grocery delivery ventures has the greatest chance for success. We will also point out significant links between these potential success stories and publicly traded companies in the US and Asia.Of course, the growth of these new online grocery delivery ventures will inevitably present a challenge to incumbents in the grocery retail segment. Another objective of this note is to identify which companies, public and private, are most vulnerable losing share to these emerging online grocery delivery companies.This note is divided into two parts, written by two authors. In this first part, I focus on the history of online grocery delivery and profile some of the US companies in the space (and one UK-based company). I also list reasons for the demise of most of the 1990s ventures, and reasons for the success of a small number of US/UK companies founded 15+ years ago.In the second part of this note, <a href="https://www.smartkarma.com/profiles/803" target="_blank" data-smartkarma-citation="accounts:803">Valerie Law</a> surveys the emerging Southeast Asian online grocery delivery scene and delivers some investment conclusions. Please see <a href="https://www.smartkarma.com/insights/then-now-online-grocery-delivery-in-the-us-se-asia-part-2-of-2" target="_blank">https://www.smartkarma.com/insights/then-now-online-grocery-delivery-in-the-us-se-asia-part-2-of-2</a>.

In recent years, in both the US and SE Asia, there have been a number of large, new, well-funded ventures that promise customers a broad selection of popular consumer goods delivered to their doors in a matter of hours (or minutes, in some cases) at prices that are very similar to what mainstream grocery retailers charge. The booming online grocery delivery segment has caught the attention of giants from both the traditional retail and e-commerce worlds, with sizable investments from Alibaba Group Holding Ltd (BABA US), Amazon.Com Inc (AMZN US), and Wal Mart Stores Inc (WMT US).The basic idea behind all of these ventures is not a new one: decades ago, our grandparents could pay a modest fee to have groceries delivered to their homes by the local store. And in the 1990s the “dot-com” bubble produced several high-profile ventures that promised speedy home delivery of virtually anything you could purchase on the Internet or in a store, usually without charging any delivery fee.However, almost all of those 1990s startups failed -- sometimes spectacularly -- and one of the purposes of this note is to answer the question, ‘What, if anything, is different this time around?’ After performing an autopsy on some of those failed “dot-com” companies, we also examine a couple that managed to survive the painful winnowing of dot-com wannabes and grow into profitable, well-managed companies.By analyzing these losers and winners, we can identify a few keys to success for today’s crop of US and SE Asian online grocery startups (as well as approaches to avoid). We then use these same criteria to determine which of the  new online grocery delivery ventures has the greatest chance for success. We will also point out significant links between these potential success stories and publicly traded companies in the US and Asia.Of course, the growth of these new online grocery delivery ventures will inevitably present a challenge to incumbents in the grocery retail segment. Another objective of this note is to identify which companies, public and private, are most vulnerable losing share to these emerging online grocery delivery companies.This note is divided into two parts, written by two authors. In this first part, I focus on the history of online grocery delivery and profile some of the US companies in the space (and one UK-based company). I also list reasons for the demise of most of the 1990s ventures, and reasons for the success of a small number of US/UK companies founded 15+ years ago.In the second part of this note, Valerie Law surveys the emerging Southeast Asian online grocery delivery scene and delivers some investment conclusions. Please see https://www.smartkarma.com/insights/then-now-online-grocery-delivery-in-the-us-se-asia-part-2-of-2.

Then & Now: Online Grocery Delivery in the US & SE Asia (Part 1 of 2)