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'The current food supply chain is very old-fashioned - we want to change that. Our philosophy is to go directly to the best places and then sell directly to the customer. There's no wastage and we don't have to carry inventory either.' - Mr Li, OpenTaste founder.
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CUTTING OUT MIDDLEMEN: OpenTaste allows consumers to buy fresh, high-quality produce from a global farmer's market and have it delivered to their doorstep within days of being harvested.

Fresh ideas

Internet entrepreneur David Li wants to revolutionise the way we shop for groceries.
Nov 21, 2015 5:50 AM

IT took a few bad apples for David Li to step into the food supply chain and change the way we shop for groceries. When his children pointed out that fruit bought in the supermarket was poor-tasting and pricey as well, Mr Li decided to do something about it. Now, at the click of a button, consumers in Singapore will be able to buy farm-fresh products direct from growers around the world.

In roughly two weeks' time, OpenTaste (www.opentaste.sg) - an online site that allows consumers to buy fresh, high-quality produce from a global farmer's market and have it delivered to their doorstep within days of being harvested - will open for business. Selling at prices that are significantly lower than those found in supermarkets, it could be the way forward for how we buy food in future.

Mr Li, 39, an Internet entrepreneur who builds e-commerce sites, has made a lucrative career of being a game-changer. In 1999, fresh out of New York University Film School, he created wedding.com, a platform providing wedding services. A year and a half later, he sold it to the company that owns Macy's department store - at 24, he was a newly minted multi-millionaire.

Seven years later and living in San Francisco, he started a visual intelligence search engine that could analyse digital photography in detail - selling it a year or so later to a Silicon Valley company that was later acquired by Google and becoming a billionaire in the process. It's the sort of eye-popping track record that makes people sit up and take notice whenever Mr Li decides to embark on something new. "I am now un-retiring again," he says with a laugh. "I go back to work every seven years."

Mr Li is now a Singapore citizen who divides his time between residences in the south of France, Los Angeles, Singapore and elsewhere. He spent two years working with engineers and programmers here designing the system that he hopes will defy conventional thinking: that perishable food can't be sold on the Internet because it takes too long to reach the customer.

He also spent a considerable amount of time visiting farms and producers in the US, Europe, Asia and Australia, focusing on organic and healthier foods, then signing them up to his site. So far, over 100 farms and producers from 11 countries are on the list. Food "ambassadors" representing OpenTaste continue to scour the world for more producers to add.

Mr Li says by cutting out middlemen, farmers will end up getting a bigger proportion of every dollar spent on their goods. He also guarantees that prices will be 30 to 50 per cent cheaper than in supermarkets such as Cold Storage. "Many items in supermarkets are harvested before they fully ripen in order to have a longer shelf life," he says. "If you leave it on the vine a bit longer, the taste will be totally different. The current food supply chain is very old-fashioned - we want to change that."

Another key to the concept was to ensure a smooth and timely delivery system from farm to customer, says Mr Li. He devised an all-inclusive system that will control all aspects of the supply chain and ensure on-time delivery to customers within two days of receiving an order. "Internally, we describe ourselves as a logistics company," he says.

Orders are recorded at a Social Aggregating Centre (SAC), which are compiled until a cut-off time (9 pm), then sent to individual producers in various countries who pack the orders and pass them to a freight forwarder, who delivers the items to a major airport and onto a flight to Singapore. At the company's receiving centre in Jurong, which is equipped with a cold room, orders are packed in insulated bags, then delivered via an Uber-like system where drivers are required to deliver up to 12 orders within a two-hour window. Customers indicate the time they would like the deliveries to reach them. Mr Li says drivers will be paid S$25 an hour and any order of S$35 or more is delivered free of charge.

All products will meet AVA requirements, whether it's beef from Texas and Australia, lobsters from Maine or fruit and vegetables from California and Malaysia. While customers may not be able to physically inspect a product before ordering it, Mr Li says there is a money-back guarantee if any customer is less than satisfied. "Our philosophy is to go directly to the best places and then sell directly to the customer," he says. "We help customers buy directly from the world's best farms - there's no wastage and we don't have to carry inventory either."

Mr Li intends to obliterate the competition in terms of pricing. For example, if a pack of strawberries costs S$9 or S$10 at Cold Storage, he can source better-tasting strawberries from a grower at S$2 and sell it at S$3.99. Similarly, a 130-gram pack of baby spinach costing S$8 at a supermarket looks a lot less attractive compared to a 300-gram pack for S$4 on OpenTaste. The site also features information and videos about individual farms, so that customers have a better idea of the provenance of their goods.

He says he is prepared to spend "at least" S$10 million on marketing and technology to develop the OpenTaste platform and market the service through "Open Tasting" events, pop-up stores, direct mail, giveaways and so on. When the site launches, it will start with fruit and vegetables then gradually include meat, seafood and dairy products. Eventually, says Mr Li, luxury items such as truffles from Italy and caviar from Iran will be available.

Mr Li is prepared to do more than put his money where his mouth is. Earlier this year, he launched the site in Los Angeles (www.opentaste.com) and in the space of several months, says the site has 75,000 registered customers with a US$7 million-and-growing monthly turnover and a high percentage of repeat business. There are plans to open in several more US cities and if the Singapore business model works, he intends to roll out more sites in places such as Hong Kong and Dubai.

It remains to be seen if the site will be able to generate enough customers to be viable, but Mr Li says making money is not his primary motivation. "We need to do something that can prove the model, then we expand to the world," he says. "This will be a huge business - we want to bring it to the next level." He adds: "We are not in a hurry to make money - I want to make a big change in the world. We have a chance to make things perfect. Eat better, pay less - that's my goal."