Behind Honestbee’s big offline move and rapid expansion to 1,000 employees

Is there a sustainable business behind Honestbee’s rapid rise? What will it do next?

Photo credit: Honestbee

Honestbee is an intriguing startup. From just 55 staff in its small but tasteful office in Singapore’s Little India in 2015, the company has grown into a 1,000-strong regional player in food and groceries delivery as well as logistics. It has just opened an Instagrammable retail and food concept space called Habitat, filled with gourmet ingredients and cooked food – a foodie’s heaven.

Honestbee parachuted right into the thick of Southeast Asia’s online groceries wars. The company at the epicenter was RedMart, then the toast of the startup scene. Its investors were a who’s who of the tech industry: Facebook co-founder Eduardo Saverin, Sea, and East Ventures, just to name a few.

Then came this mysterious new player with a vastly different approach. While RedMart preached end-to-end integration from the buying experience to supply chain management, Honestbee was asset-light: Its worker “bees” would shop on the consumer’s behalf and then deliver the goods to their doorstep. RedMart would disrupt supermarkets – but Honestbee would help them.

Then things went topsy-turvy. RedMart, running low on funds and vastly unprofitable, got snapped up by Lazada. Today, Honestbee plods along as an independent player, though it has snagged at least one major investor in recent years.

Its business is multifaceted. It does on-demand delivery of food, groceries, and laundry, supported by its own logistics business, Goodship. Honestbee doesn’t appear to be dominating any category, if app store rankings are an indicator. In food delivery in Southeast Asia, it’s right in the mix with Foodpanda, GrabFood, and Deliveroo. In groceries, RedMart is still going strong in Singapore, and Amazon Prime is hanging in there despite being quiet.

On the surface, Honestbee is the antithesis of a common wisdom about what startups should be. In an interview I did with Eric Gnock Fah, who took his activities booking startup Klook to a billion-dollar valuation, he harped on the importance of focus:

In the era of “super apps” (think Facebook, WeChat, Grab, and Go-Jek), Gnock Fah thinks startups shouldn’t be concerned with becoming one themselves. Instead of catering to many user needs, focus on being great at addressing one, he suggests.

He points out that even super apps start out focused. Grab was focused on ride-hailing, WeChat was focused on messaging, and Google was focused on searching.

It’s only when a startup gets much bigger that diversification matters. That’s when it can hire a team with the personalities and skill sets needed for a specific new product.

“For someone who’s ecommerce-driven, it’s hard to change the DNA and say, you’ll now build a social app,” says Gnock Fah.

Honestbee’s operations seem to have grown far more complex since its beginnings – hence the ballooning headcount. It’s no longer as asset-light as it used to be: it’s now running its own warehouses, a logistics service, an e-wallet, three types of deliveries, and a retail space. Acknowledging the shortfalls of an asset-light approach, it has invested in infrastructure. RedMart co-founder Roger Egan’s comments seem prescient:

An untested space

A singular focus on its partners