Online grocery startups burning excessive cash are having a tough time navigating the competitive landscape in Indonesia’s booming fresh e-commerce market, according to investors. Moreover, existing players are struggling to retain market share at a time rising inflation threatens to reduce the purchasing power of many households, they said.
Randolph Hsu, a founding partner at venture capital firm Ondine Capital, said a fresh e-commerce business model can be sustainable only under strict supply-chain management, harvest planning and quality distribution. “We have observed that some companies that expanded aggressively on deliveries without considering costs are going through a hard time,” he said, noting that a good reputation leads to lower customer acquisition costs and higher retention rates. Hsu did not mention any specific company.