Grocery delivery startup HappyFresh eyes over 100 dark stores in coming years

Sharanya Pillai

Published Tue, Feb 8, 2022 · 10:00 AM

INDONESIAN online grocery delivery service HappyFresh is bulking up on physical assets, with expectations to have more than 100 "dark stores" - retail outlets designed exclusively for delivery - across South-east Asia in the coming years.

"We have been exploring and researching the concept of dark stores for a while, namely the required infrastructure, as (part of) the next evolution of our business model," HappyFresh chief executive Guillem Segarra told The Business Times in an email interview.

HappyFresh has thus far operated with a more asset-light model: Its personal shoppers handpick groceries for customers from partner retail chains. Besides Indonesia, it also operates in Malaysia and Thailand.

On Tuesday (Feb 8), the startup unveiled its dark store concept, HappyFresh Supermarket, to enhance its ability to deliver a variety of groceries on demand. Each dark store will house some 15,000 stock-keeping units of fresh, dry, and frozen products in its inventory within three temperature zones.

"HappyFresh Supermarket is our first exploration into completely adding dark stores into our operating model. We believe it is a natural step given the current volumes and industry maturity," said Segarra, noting that the startup's dark stores are larger than typical ones.

HappyFresh first began trials around the dark store model in early 2021. It went on to launch 15 facilities between October last year and this month in its 3 operating markets. "We are scaling up the number of facilities to cope with the rising demand while increasing our coverage areas," added Segarra.

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Like other on-demand delivery players, the startup has seen a surge in demand under pandemic conditions. HappyFresh's entry into dark stores also comes as foodpanda and Grab fight for market share in quick-turnaround delivery, also known as q-commerce, for groceries.