David vs. Goliath: small grocery chain Presto Grocer plans to topple giants in Southeast Asia

Remember a time when we had to actually go down to the stores to buy everything that we need? Azrin Zuhdi, co-founder of Malaysia-based retail group Presto Grocer, recalls the days when no online supermarkets were available in Malaysia:

Previously both Daniel Ruppert [CEO and co-founder] and I lived and worked in London as busy investment bankers who had no time to go grocery shopping. All our groceries were done online, but when we came back to Kuala Lumpur and wanted to continue buying our groceries online, we realized that at that time there were no proper online supermarkets available.

That was 10 years ago, and was the spark that gave them the idea to pursue an online supermarket business. According to them, the problem was that Malaysians were fairly skeptical of buying food online back then, which explained the lack of such options.

So they did something unusual – the duo decided to open physical grocery stores first, prior to going online. The reason: to establish their brand name. Only later in 2009 did they decide to open the ecommerce arm of Presto.

Even then, Zuhdi admits that the past four years have been really slow-moving. “The grocery ecommerce market has been building up slowly. For Presto this was good as, until now, our business model saw online sales as just another sales channels without any large investment in operations. Online orders are being fulfilled by our physical store in Citta Mall – no warehouse center,” she says.

She sees the slow growth as something positive, though. “The slow growth allowed us to fine-tune the system first, and gain experience in how best to deliver non-chilled, chilled and frozen items within one order, how to avoid delivery delays, and so on,” Zuhdi explains.

Hitting SEA hard and fast

With four outlets in Klang Valley and a newly revamped website, the team is now ready to take over the rest of Southeast Asia – a highly ambitious plan. “Now with the market starting to pick up pace, we are ready to roll-out a faster and more aggressive ecommerce strategy,” says Zuhdi.

While she declined to reveal the countries that they will be looking to move into after building up a larger market share in Malaysia, she hinted Singapore would be one of them. With RedMart in pole position over at the island-state, however, the question is whether the small grocery chain would be able to give it a run for its money.

Zuhdi certainly believes so. “The market growth for online grocery in areas such as Singapore will be large enough to allow multiple players to strive and succeed at the same time,” she says.

They will need all the help they can get. So far, the duo has managed to raise an undisclosed amount of seed funding, and are gunning to kick off a series A round by the end of this year. With this in mind, they’ve also brought on seasoned Malaysian entrepreneur Bob Chua to join their board of directors. Ruppert believes that Chua’s experience in scaling high-tech data-driven organisations would be extremely valuable to their expansion plans.

See: 14 popular ecommerce sites in Singapore