The online grocery shopping scene in Malaysia may have started at a snail’s pace as consumers still preferred to shop at the pasar pagi or supermarket where they can smell, poke and fight with other makciks over the freshest products.
But Covid-19 came along and threw that “touchy-feely” risky behaviour straight out of the window, giving a boost to the online grocery shopping scene. Consumer acceptance also increased as they started to appreciate the convenience of shopping in the comfort of their homes and the doorstep delivery of bulky grocery items.
“The pandemic helped make the idea of online grocery acceptable,” recalls Joshua Sew, founder and CEO of Jocom, an acronym for “Just Order Conveniently on Mobile”, arguably Malaysia’s first-ever grocery shopping mobile app, in an interview with The Edge Singapore.
“We were lucky to start our business five years ago. That gave us time to build our brand and allowed us to be prepared for the pandemic. In 2018–2019 when we were at our peak, many still questioned the feasibility of online grocery … until the pandemic happened,” adds Sew.
Still, it was not easy for Jocom as the surge in orders during the first lockdown period was sudden and the company was not prepared for it. “It was a good problem to solve,” says Sew, who recalls rushing to hire more people to support logistics while ensuring the health and safety of the staff.
Since its inception, Jocom has evolved into one of few end-to-end platforms for grocery shopping in Malaysia. Sew says Jocom is one of the very few online grocery platforms in Malaysia that has full control over its entire order journey from purchase to fulfilment and has ownership over the platform, proprietary software, delivery fleet and storage facilities.
With tight control over its order journey and supported by its integrated operations, Jocom managed to clinch a spot in the Malaysia Book of Records for being the first Malaysian online grocery app that delivers within 24 hours of receiving an order.
Today, Jocom has 3 million users, 500 vendors and 15,000 SKUs (stock-keeping units). Although this is nothing short of impressive growth, Sew is hungry for more.
Get to the next level with 1X
To take the company to the next level, Jocom has successfully listed on 1exchange (1X), Singapore’s first regulated private securities exchange with a Recognised Market Operator licence granted by the Monetary Authority of Singapore (MAS). The exchange is part of CapBridge Financial and is backed by the Singapore Exchange (SGX), SGInnovate, South Korea’s Hanwha Investment and Securities Co, Hong Kong’s Cyberport Macro Fund, and AMTD Digital. Jocom is 1X’s second cross-border listing, as well as the third private securities exchange listing of its kind in Singapore.
Listed on March 18, Jocom sold part of its share capital to raise proceeds of $5.6 million. The funds raised from its private listing will allow it to “enter a new chapter of growth”.
“We are now not ready to list on a public platform, but listing on 1X gives us a good platform to ensure that we have good reporting standards and compliance. So, investors are much more confident and comfortable to come in,” says Sew, who adds that the Covid-19 pandemic gave him the idea to restructure the business and list on 1X before seeking the eventual IPO.
Asked why he chose 1X over Bursa Malaysia, Sew says, “Singapore is much more of a financial hub. And having ourselves listed on 1X in Singapore gives us a chance to show other markets that there is this online grocery company with good growth in Malaysia that has a lot of opportunities and a lot of advantages.”
“But the plan for most start-ups is to eventually list on a public stock exchange,” adds Sew.
Mohamed Nasser Ismail, senior vice-president and global head equity capital markets at SGX, says Jocom’s listing adds to the vibrancy of the broader capital markets and provides shareholders and other interested investors a market for tradable private equities. “We look forward to supporting Jocom and other such companies to prepare for an eventual public listing when they are ready,” he adds.
Meanwhile, Sew also says that he is open for the company to be bought over by a larger player.
For example, RedMart in Singapore was founded in 2011 and operated similarly to Jocom — managing its own ordering platform, warehousing and logistics. It also took RedMart a while for the Singapore market to warm up to its services and gain broad acceptance.
As traction picked up for RedMart, the company caught the attention of Lazada, one of the top e-commerce platforms in Southeast Asia owned by Alibaba Group. Eventually, RedMart was acquired by the e-commerce giant and with quality resources from Alibaba, RedMart saw significant income growth and better margins since its buyout.
Jocom too has somewhat caught the attention of Alibaba. Sew was previously one of the top 150 trainees of the Alibaba Netpreneur Training programme from Alibaba Business School while Jocom manages one of the few Malaysian pavilions on the Alibaba platform, supplying food, snacks and beverages produced in Malaysia to consumers on the platform.
Next phase of growth
In its FY2020 results ended December 2020, Jocom achieved a gross merchandise value (GMV) of RM22 million ($7.1 million), an increase from RM18.3 million in FY2019. It also achieved a CAGR of 85.26% in the growth rate of its GMV from 2015 to 2020.
But will the uptrend of online grocery shopping in Malaysia die off after the pandemic? Sew does not think so.
“Everyone here in Malaysia is getting used to the new norm, which includes working from home more often. I believe that Covid-19 will still be around in the next two to three years until the whole world gets vaccinated. The online grocery market is only going to get bigger with the new norm and I think there will be more new players coming up in the market,” says Sew.
According to market data portal Statista, Malaysia ranked second in its list of the world’s fastest-growing grocery market in 2018, while training organisation IGD Asian predicts that the online sales value of groceries in Malaysia will increase at a CAGR of more than 60% between 2017 and 2022.
In addition, since 2015, Malaysia’s e-commerce market has trebled in size to over US$3 billion in 2019 and the Malaysia Economic and Strategic Outlook Forum 2021 projected that this market will reach US$11 billion ($14.6 billion) in 2025.
With funds raised from its private listing, Jocom intends to go big by expanding its footprint locally and internationally while sprucing up its back-end systems with AI.
Sew, who is a programmer by profession, says, “I want to leverage on AI and use it on all the data collected throughout the years to help not just us, but also consumers and manufactures.”
Sew plans to develop an AI-powered backend system that will analyse big data such as demographics, customer preferences and spending power, before transforming them into actionable insights for targeted marketing activities. The AI-driven analytical insights will also support delivery logistics, inventory management and merchandise pricing, streamlining of processes and generating of cost efficiencies.
On its expansion plans, Jocom is currently only available in the Klang Valley although Sew intends to reach more areas like the Southern and Northern parts of Malaysia. His goal at this moment is just to capture 5% of the market share of grocery consumers in Malaysia.
Beyond Malaysia, Jocom plans to expand to Indonesia and Australia, positioning itself as a gateway for Malaysian producers to make their products available to overseas markets. Jocom has started making inroads in China, channelling sales of Malaysian products to Chinese consumers.
“E-commerce is booming in China, so much so that I don’t think it has reached saturation point yet. We have a satellite office in China that has been there for two years and with social media marketing also booming, the market will not be saturated,” says Sew.
“Jocom wants to bring unique products to China from Malaysia such as durians and other exclusive snacks. We find that Malaysian food is very adaptable in China.”
