SINGAPORE, May 15 — Homegrown startup Honestbee’s termination of its food delivery service here will have minimal impact on its restaurant partners, some eateries have told TODAY.
The company announced today that it will halt its food delivery service in Singapore from May 20, as part of a “strategic review of its business”. The service was launched in October 2017.
But the eateries that TODAY approached said that any impact on business would be small, owing to their reliance on other platforms such as Deliveroo, Foodpanda and the newer Grabfood.
For example, Honestbee’s orders take up less than five per cent of Salad Stop’s delivery business, said the salad chain’s co-founder Adrien Desbaillets.
Yolo Food’s business would “not really be affected” as well, said Tabitha Carnett, manager of the Icon Village outlet, which sells healthy meal options.
“Compared to the other platforms, Honestbee’s numbers are not a superb amount. Some days, we don’t even have their orders at all,” said Carnett.
The outlet sees about 10 orders per day on each of the other three platforms, but only about 10 orders made through Honestbee in a week.
Lebanese restaurant Qasr Grille’s manager Jeet Singh said he “didn’t even know Honestbee was terminating its service”.
“But it’s okay,” added Singh, as the restaurant had been receiving only, at most, 10 orders a month through Honestbee.
In comparison, five to seven orders are made each day through Deliveroo, going up to 20 on the weekends, and three to four on Foodpanda. Even newer Grabfood won about two orders made a day.
Exit ‘not surprising’
Business analysts told TODAY that they are unsurprised by Honestbee’s move, given the tough competition in the food delivery space.
“It’s very clear that they’re against the big boys in the market,” said Associate Professor Lawrence Loh of the National University of Singapore’s Business School.
Compared to the international players Deliveroo and Foodpanda, who are specialised in food delivery with “big pockets”, Honestbee loses out without a “compelling value proposition”, added Prof Loh.
With the saturated market, Associate Professor Geoffrey Chua of Nanyang Technological University’s Nanyang Business School said he had been expecting Honestbee to be edged out by the competition.
In comparison, the players who are focused purely on food delivery are able to garner the most economies of scales, “capturing the market at lower costs and faster speeds”, said Prof Chua.
Timely to reassess direction
The analysts added that Honestbee’s move was a timely opportunity for the company to reassess its business strategy and focus on its strengths, in grocery delivery and the Habitat concept.
Habitat was launched in October last year as Honestbee’s first physical space, rolling a supermarket, restaurant, and retail concept testbed all into one.
“It’s quite clear that this is an appropriate decision at this moment, for them to focus back on their fundamentals,” said Prof Loh.
Calling it Singapore’s “best kept secret”, Prof Loh said that Habitat’s concept was worth further development with “lots of potential”.
“It caters to a new generation of consumers with this lifestyle concept of grocery shopping. If they pump in more into this, it’ll become a top notch destination,” he added.
And in terms of grocery delivery, Honestbee stands out among its competitors due to its concierge service, said Prof Chua.
“The huge supermarket chains have also launched online retail, but Honestbee works like your personal shopper, and this is a selling point that sets them apart,” he added.
As such, food and beverage consultant and branding specialist Derrick Chew was of the opinion that Honestbee strengthen this identity as a “personal concierge”.
“It made perfect sense for Honestbee to go into food delivery after grocery delivery,” said Chew. “But the mistake was going in head on with the other delivery companies to do the same thing.”
Instead, Honestbee could brand themselves with a “personal, exclusive food concierge angle” and establish this niche, he added.
“Rather than a delivery service per se, it’s about offering a customised, personalised service to take away the mundane and serve these busy people.”
Laundry service suspension
In addition to halting its food delivery service, Honestbee also announced a suspension of its laundry service from May 20. Customers could arrange for their laundry to be picked up and then returned, at the convenience of their doorstops.
Analysts told TODAY that while it was a unique business idea, Singapore had not yet developed a market for it.
“There is no competition for sure, but the market is just not big enough,” said Prof Chua.
Prof Loh added that such laundry services would be “inconsequential” as they do not tie in with the common Singaporean lifestyle.
As such, it was natural that Honestbee felt a need to review their laundry service.
“Delivery is not as well-entrenched as habits when it comes to laundry,” said Prof Loh.
“Foremostly, most of us have laundry machines at home to do our own laundry. And if you talk about dry-cleaning, it’s mostly the habit to drop it off on the way to work, and then pick it up on the way home.” — TODAY