Back with new funding, SG e-grocer UglyFood hopes second time’s the charm

In The Checkout this week, we look at how a defunct e-grocer got a fresh chance and how a traditional retailer is going up against Amazon in ecommerce [Read from your browser]( The Checkout 🛒 --------------------------------------------------------------- Welcome to The Checkout! Delivered every fortnight, this free newsletter breaks down the biggest stories and trends in ecommerce. You can find past issues [here]( or [sign up here]( to receive future newsletters. Also, If you’re not a subscriber, get access by [registering here](. Written by Simon Huang Journalist Hello {NAME} When I’m looking for a quick dinner late at night, I’ll sometimes go to the supermarket and get a box of sushi that has been marked down. It’s a win-win: I pay less, and the food doesn’t go to waste. There’s a similar theme going on with UglyFood, an online grocer that specializes in blemished and surplus produce like fruits and vegetables. What’s notable is that a previous version of the company, which was founded by Augustine Tan as a university project in 2016, suddenly shut down in January after failing to raise enough funds. However, as my colleague Melissa covers in this week’s Big Story, UglyFood is now back in action, having secured backing from a strategic partner in the imports sector. What else has changed? The company has revamped its logistics system, bolstering what was once a weak spot. But will all these improvements be enough for the new iteration of UglyFood to succeed? In Melissa’s article, Tan also mentions that only two types of players in the grocery space survive: those who are very established and those who have a specific niche. That’s generally the case in retail, and this theme carries through to this week’s Hot Take. I look at how US retail behemoth Walmart has not only held its own against Amazon in the US but has also built an ecommerce business that’s growing faster than the Seattle-based online shopping pioneer. What lessons can Asian retailers learn from this? Read on to find out. -- Simon  --------------------------------------------------------------- THE BIG STORY [Fresh start for UglyFood as new ‘strategic partner’ funds logistics overhaul]( Four months after its closure, the Singapore-based e-grocer is back up and running with a new “strategic partner” and a revamped logistics system.  ---------------------------------------------------------------  THE HOT TAKE Walmart’s battle with Amazon in the US holds lessons for Asian retailers Here’s what happened: - The US retail giant’s latest quarterly results show it is holding its own against Amazon in its home market. - Walmart’s revenue for the quarter ending April 30, 2023 was [up by 8%]( year on year. - Its ecommerce business posted a 26% year-on-year growth, driven by pickup and delivery as well as advertising, which rose 40% year on year in the US. Here’s our take: It wasn’t too long ago that many were [mourning]( the death of offline retail. But in the US, home to ecommerce pioneer Amazon, Walmart is showing that a traditional retailer can still thrive. Last week, the Arkansas-headquartered retail heavyweight reported revenue and earnings for the first fiscal quarter of 2024 that [beat Wall Street’s expectations](. Walmart’s top line was driven by strong numbers from its ecommerce division. Sales in the US were up by 27% from the same period last year, besting the 7% overall revenue growth in the country. While Amazon’s Q1 results also [surpassed analyst estimates]( for the quarter ending March 31, 2023, net sales of the company’s North America segment (which excludes its cloud services platform AWS) [jumped by 11%]( compared to the previous year. Walmart’s continued success in US retail holds lessons for Asian retailers. First, unless you are specializing in a niche product, scale is key. Walmart has [over 5,000]( retail shops in the US that range from groceries and supercenters to discount stores and neighborhood markets. Many of these double up as pickup points for products purchased online, with some stores also containing [modular warehouse units]( that can hold thousands of products. Second, there’s no avoiding the need to invest in ecommerce. Over the years, Walmart has spent [over US$3 billion]( to acquire various ecommerce businesses including the now-discontinued Jet.com. Under the leadership of Jet.com founder Marc Lore, Walmart [expanded its online selection and rolled out a two-day delivery service](. Third, new revenue streams must be found. CFO David Rainey [forecasts]( that more of Walmart’s future profitability will come from ad sales and fees it collects from the merchants using its online marketplace and delivery services. Certainly, the Walmart model can’t simply be copied wholesale in Asia. For example, many urban areas in Asian cities don’t have the space needed to accommodate hypermarkets as vast as Walmart’s. But in order to ensure their survival, retailers in Asia should consider whether they could benefit from a mixture of consolidation, acquiring local ecommerce platforms, and opening their ecosystem to other merchants or advertisers. Closer to home, they may also want to look at how Walmart has succeeded in India, where its US$16 billion investment in local online retailer Flipkart seems to be paying off. Since getting Walmart’s backing in 2018, Flipkart now has a [larger share of India’s ecommerce market]( than Amazon.  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ [Food delivery major Swiggy says it’s profitable after 9 years]( This comes after the India-based firm laid off 380 employees in January. 2️⃣ [Shein raises $2b, valuation drops to $66b amid concerns]( The ultra-fast fashion firm’s reduced valuation, down from US$100 billion a year ago, can be attributed to a general decline in the share prices of tech companies. 3️⃣ [Signature Market delays domestic IPO after profit decline]( The Malaysian ecommerce platform, which sells healthy snacks, has seen profit fall as consumers go back to offline shopping. 4️⃣ [J&T furthers China expansion with $170m acquisition]( Acquiring Shenzhen Fengwang Information Technology will help the Indonesia-based logistics company improve its service quality and competitiveness in China. 5️⃣[Blibli to issue 4 billion shares as compensation to management, staff]( The move, which is part of the company’s employee stock option program, is aimed at motivating and retaining key employees. ---------------------------------------------------------------  FYI  1️⃣ [Wall Street’s sour reaction to Sea’s Q1 results: justified or short-sighted?]( Disappointing results at Garena and a mixed picture at Shopee were balanced out by a strong performance at the firm’s SeaMoney division. 2️⃣ [Roll-ups 2.0: Changing winds prompt shifts in ecommerce aggregator model]( Under the Aggregator 2.0 model, firms will have to prove they can grow without resorting to simply buying up brands. 3️⃣ [Bukalapak seizes ‘great opportunity’ in Mitra as rivals like GoTo exi]( While Bukalapak’s Mitra business has shrunk, it’s part of a deliberate effort to bring the unit to a position that’s contribution margin-positive.  That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you on June 8th! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894