Shopping
for groceries online took off in a big way in the last year, although the
service has been around for nearly a decade.
PayPal, which provides online payment services
to virtual grocery stores here, reports that consumers here spent almost 200
per cent more in the first eight months of this year than they did in the whole
of last year - with the year-end festive period surge still to come at that.
PayPal handles payments for household.sg,
thebutcher.com.sg and supernature.com.sg, among other virtual retailers.
The convenience of shopping in the comfort of
one's own home, and then having the items delivered, perhaps for an extra $7
(US$5) to $12 (US$9), is hard to top for Internet- savvy, time-strapped
consumers.
Christine Leong, 43, an administrative
assistant and mother of four, does her weekly grocery 'runs' on home-grown site
household.sg before she goes to work, while sipping her coffee.
She goes online, clicks on the items she
wants, 'checks out' and chooses a delivery slot. There is a delivery fee, but
if she spends more than a certain amount, that might be waived; the fee is
higher for smaller orders.
Items popularly bought by shoppers like her
are essentials such as rice, milk powder and diapers, as well as heavy or bulky
items like mineral water.
At household.sg, for instance, customers now
spend an average of $80 (US$60) at a go--twice what they spent scarcely six
months ago, when the website was launched.
Delivery is free for orders above $40 (US$30).
Demand at the online stores of supermarket
chains like FairPrice, Cold Storage and Carrefour is also rising.
The number of customers at FairPrice's
eight-year-old online store has grown by an average of 25 per cent
year-on-year.
The chain, which charges $7 (US$5) for
transactions of above $60 (US$45) and $10 (US$7) for orders below that, has
increased the variety of items in its online store to 4,000, up 30 per cent
from last year.
At Cold Storage, which has similar charges,
demand has risen by a double-digit percentage year-on-year since 2007.
Carrefour, which opened its online store only
in August, has yet to start selling perishable items, but demand has surged all
the same. Its customers, made up of a mix of locals and expatriates, spend
about $200 (US$152) a transaction.
Delivery is free if the bill exceeds $150
(US$114).
Gerry Lee, FairPrice's managing director of
business groups, puts the increased demand down to the change in consumer
purchasing habits. 'Shoppers now have busy lifestyles. Online shopping lets
them buy their daily essentials from the comfort of their own homes.'
Going online also makes sense for businesses.
Australian supermarket chain Coles, for example, trades the equivalent of five
to six large brick-and-mortar stores through its online site, which incurs
considerably less in overheads.
The booming market is attracting new entrants.
Heartland chain Prime Supermarket is now testing its online website, due to be
launched in a month; Sheng Siong has not ruled out the possibility of running a
virtual outlet as well.
The founder of household.sg, Reuben Lee, 23,
started his business on the back of his memory of numerous 'repetitive and
troublesome' trips to the supermarket with his mother.
He said: "People are already very
comfortable with shopping online. Right now, you can buy almost anything
online. Why not groceries?"
The computer science student at the National
University of Singapore stocks a warehouse with items bought from manufacturers
and delivers them to customers with the help of three part-timers who do the
deliveries, manage the stocks and programme the website.
Housewife and mother of five Glenda Frost, 52,
started shopping online in January. She likes that she can compare prices
across websites, and spends about $80 (US$60)each time.
The native Texan uses Cold Storage's online
store, relishing the thought of avoiding the crowds. "Shopping online
means I can take my time to figure out what I need," she added.
For Leong, who does not own a car, the
delivery service is a boon, especially when she buys heavy items such as drinks
and detergents in bulk.
She said: "The people at household.sg
carry the groceries right into my kitchen, and delivery is free if I spend more
than $40 (US$30). It's a great service."
Jessica Lim
The Straits Times
Business & Investment Opportunities
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