The Future of E-Grocery: The Supply Chain Evolution

What are Dark Stores? How do they relate to E-Grocery?

The idea of Dark Stores refers to a retail distribution center or warehouse that caters exclusively to online shoppers. The benefits of online commerce that use dark stores distribution centers is time efficiency and the quality of the product is guaranteed as well since groceries consist of fresh products that have a short span of time and need to be consumed or stored immediately. On the other hand, despite its benefits, costs for dark stores are higher due to long delivery routes and a huge investment is required to open up stores. The emergence of dark stores in the e-grocery sector is one of the impending evolutions of its supply management. Similar to Amazon that encourages Wholefoods to solely fulfill online orders, a similar pattern has been seen in Indonesia. 

Consideration of Dark Stores

Happy Fresh had recently announced that they are planning to establish over 100 dark stores across SEA, the initial approach had been done through bulking their physical assets exclusively designed for delivery. A special temperature of three degrees will be set on each drug store and a faster delivery process is expected to keep 15000 stock-keeping units. This evolution is expected to be running in the upcoming years. Players in the industry had started considering entering the dark stores market in hopes to achieve better delivery service and carry on with the industry maturity by facing competitive survival during pandemic conditions. 

Similar to Happy Fresh, the E-grocery success relies heavily on its distribution channel. According to discussions with several players, supply chain is critical in deciding the viability of an e-grocery. The current trend is divided into two customs:

• Downstream, by forming relationships with supermarkets/grocery outlets to ensure  proper handling and operational excellence such as Happy Fresh that collaborates with more than 150 supermarkets and specialty stores across 4 cities. Thus, ensuring better supply sustainability. 
• Upstream, focused on enhancing collaboration (and supply) with farmers across Indonesia. For instance, Tanihub enhances collaboration with farmers by providing loans for farmers to aid themselves with working capital that provides stronger chain supplies for Tanihub.



There are high hopes that dark store emergence in Indonesia will help increase the time efficiency for retailers since it can cut down unnecessary processes in delivery and enhance distribution channels of the fresh products' delivery. Through the emergence of dark stores, there will be tremendous changes in the e-grocery industry, and we should anticipate and prepare ourselves to face the evolution in the industry.