Honestbee As A Data Company


This is a follow-up from the first article "Understanding Honestbee's business model" and aims at analysing Honestbee through another lens. Honestbee (HB) recently ventured into ticket sales in August (2017). For example, tickets to Universal Studio Singapore can be bought via their platform.

To add on to the first article, we believe Honestbee adopts a horizontal business strategy, built on logistics and soon, data strategy to become a data company. In the latter, we are referring to companies able to collect sufficiently large datasets on both (their corporate clients) businesses and end-consumers. HB is primarily B2C, serving businesses with a web and mobile platform to make distribution easier. It is also building on Stratechery's Aggregation Theory by converging from one end-customer like you and me towards its platform to have a broad variety of choices.

Most importantly, this lead to think that Honestbee is able to become a powerful data platform, shall it capture a significant portion of an end-customer's (daily or weekly) economic activity. For example, grocery could be a weekly activity, while movie ticket could be a weekly or fortnightly activity. Food delivery could be a frequent activity too. For every type of end-consumers Honestbee wants to be there for them. That's also known as a horizontal strategy.

With Amazon Prime in town (Singapore), the competition is intensifying. Lazada owns a significantly bigger presence in the end-consumers' economic activity, and is about to become "much more" as they add-on more services. We are yet to see how Amazon Prime will grow though, given the excitement has died off. As for Honestbee, we are think these are 3 ways to go forward, but the idea is to...

Become Bigger

In order to become a powerful data company, we see these three points as essential build up:

1. Demand Stickiness

An obvious strategy here is to go the Amazon Prime membership (or conveniently replicated by Lazada via LiveUp).

First, a membership programme would serve as a customer retention strategy. Bundled grocery delivery with a couple of lifstyle services (e.g. hairstyling, nail arts, rock climbing, spinning class), it will make perfect sense to keep using HB for grocery or food delivery and enjoy discounted fees (e.g. waived delivery fee, or 10% off on total bill).

Second, push notification could still be a relevant strategy. Let's get real. On average, a smartphone might have over 30 installed apps - push notification comes in as a must-have to re-engage users. (Pascal has less than 25, some apps can't be uninstalled on MIUI 8). The following data are from App Annie: screen-shot-2017-05-04-at-1-02-15-pmImage Credit: Techcrunch

Third, HB has been consistent with offers and promotions throughout the calendar cycle to engage with existing customers. Think they could eventually do more, and better. Email marketing and other forms of content marketing seems below average at the moment (though we do not have significant data to validate HB's content strategy. including multi-variant testing).

Fourthly, HB can engage in product expansion (such as activity ticket sale mentioned previously) to re-engage with customers on a more frequent basis. Again, taking a cut of customer's daily economic activity.

2. Market Share

Capturing more market share for a hyperlocal company like Honestbee requires geographic expansion as early as possible. Once the first market has been validated, a playbook can be developed and rolled out for new markets.

To our knowledge, Honestbee is operating in 8 markets, which could be between 8 and 15 cities concurrently. The company has probably been first to market in a few cities in terms of their product offerings. While the high level strategies remain quite unchanged across new market expansion, the finer details in terms of operational & management efficiency, speed & quality of execution relies on the people they hire.

3. Product Expansion

From grocery to food, then to laundry and ticket sales, Honestbee has been exploring new verticals. Product expansion has therefore been on their agenda in Singapore, and similar approach could be expected in their other markets. Indeed, Honestbee is thus shifting from a vertical marketplace to a horizontal marketplace.

With new products, the company expands its total addressable market and also, increases the likelyhood of taking a cut of a customer's daily economic activity. In addition, each new product (or service) can be offered at different price points. The key goal is not to just to offer, but to become appealing.

Where Does All Of These Lead Us To

As a data company, Honestbee could lead the way in the Southeast Asian ecosystem as a marketplace for services, most precisely, B2B2C. Importantly enough, a data company is able to grow by leveraging on each of the key point we mentioned and iterate & localise their products according to geographies.

We are thrilled to be in Southeast Asia now where there are few regional companies capable of putting up a fight, notably Lazada and Sea (formerly known as Garena), against Honestbee.