FOR THE Thai market this year, the operator of Southeast Asia’s leading online grocery platform, HappyFresh, will focus its investment mostly in increasing its logistics capabilities and systems to improve the quality of delivery as well as overall efficiency, says Grzegorz Sagan, 28, managing director of HappyFresh Thailand.
With its headquarters in Jakarta, HappyFresh has operations in Indonesia, Malaysia, and Thailand. The company delivers groceries from its partners’ stores to customers’ doorsteps in as little as one hour.
Its Thai operation will also invest a lot in what it calls customers’ facing applications to provide the best user experience, says Sagan, a Polish national who assumed the top post at HappyFresh Thailand late last year.
By the customer facing apps, he means HappyFresh applications for Android and IOS that enable its customers to place orders.
The company’s delivery network now covers around 90 per cent of Bangkok and some parts of Nonthaburi and Samut Prakan. It has 15 local partners, including the big retailers like Tesco, Big C and Gourmet Market, as well as small specialty stores offering groceries from very narrow market niches.
Sagan adds that the company has focused on the quality and completeness of assortment offered rather than the absolute number of partners working with it. But HappyFresh is always open to recruiting new partners for its platform.
While most of the grocery shopping in Thailand is done offline – online accounts for between 0.7 per cent and 1 per cent of overall grocery spending - Sagan says that online grocery transactions have grown by over 50 per cent year on year.
Compared to other countries in Southeast Asia in terms of the online grocery sector, Thailand is one of the most advanced. However, it’s still at a very early stage of development and the potential to grow is huge, Sagan adds.
“Currently, over 99 per cent of grocery shopping in Thailand is done offline. However, we expect to see online groceries growing at a similar pace to non-grocery e-commerce in its early stages,” he says.
Non-grocery e-commerce accounts for around 3 per cent of the total retail market in Thailand. In 2015, at an earlier stage of development, this figure was 1 per cent. The non-grocery e-commerce sector is expected to account for 10 per cent of the total retail market in Thailand within the next five years.
Sagan says that working as managing director of HappyFresh Thailand is a big challenge.
“Every day is different. The business is growing fast, so it’s necessary to review all processes on a regular basis to make sure they are robust and scalable enough to handle the increasing volume of orders. I would say that the ability to adapt is crucial,” he says.
“Another key challenge is to acquire and retain top talent, which is difficult in a market with such a low unemployment rate. But I really love this job. It’s extremely interesting and gives me a lot of satisfaction.”
When asked if he has any problems managing older staff when he has not yet left his 20s, Sagan says an age gap has never been an issue. “I really appreciate the experience these people are bringing to the company because it allows us to make better decisions and avoid many mistakes,” he says.
Sagan says he uses different management styles depending on the people he deals with.
“When you become the managing director in a start-up, you have to find a way to release the potential of your team as soon as possible. If your team of direct reports is very diverse, consisting of people with different personalities and capabilities, it is better to adjust your management style to each of them, rather than imposing one management style for all of them,” he says.
“For example, an experienced proactive manager can be managed by objectives. Just set the goals for him or her and he or she will figure out by themselves how to achieve them.
“On the other hand, a person who has just been promoted to a manager position may require more guidance. In such a case, managing by objectives would fail, so you have to use a different style.”
When asked what are keys to success in managing an online grocery store business, he says there are four.
The first, he says, relates to assortment, which should be wide and complete. Then there is price competitiveness, and “price is king in this business”, Sagan adds.
He says that regarding logistics, customers expect to have their groceries delivered on the same day and in good condition, and robust logistics are required to provide that.
Lastly, there is the product. Sagan says the application that customers use to place their orders should be fast, reliable and easy to use to maximise conversion rate.
Despite studying finance, Sagan feels that he likes to work in the less regulated industries.
“After the financial crisis of 2008, the finance industry in Europe has become more and more regulated, though I’m not saying it’s bad or good - but that’s a fact,” he says. “I did internships in big financial institutions and realised that I would feel more comfortable working in a less regulated and, thus, more dynamic industry.
“Online business meets these criteria perfectly, so I decided to look for opportunities there. It did not matter that much for me what kind of online business it would be - travel, food, e-commerce, etc. All of them are exciting, and similar to some extent.
“I got an offer from online food delivery business foodpanda, so I joined them. Later on, I switched from online food to e-commerce, at Lazada, and now I focus on online groceries at HappyFresh.”
Sagan was born and raised in Lublin, in eastern Poland. He has been based in Thailand since February 2018.
“I love the sea, so beautiful islands, sandy beaches are the things which impress me the most in Thailand,” he says. “Bangkok is also a great place to live in my opinion. It’s very vibrant, diverse and well connected with other cities in Southeast Asia. It’s impossible to get bored here.
“I do not find it hard to adapt to Thai culture, although it took me some time to do so and this process is still ongoing. It’s important to be tactful, tolerant, patient, and accept the culture as it is, even though it’s different.
“I'm still exploring it and I think that it is impossible to fully understand the culture without the knowledge of language and understanding of local history and contexts. That’s why I am learning Thai, although I must admit that it’s very difficult for me.
“When it comes to Thai food, at the beginning I had a problem with eating spicy dishes. But over time, my tolerance to spicy food has increased a lot, so now I can eat everything that Thai people eat and I really like it.”
Sagan has travelled a lot in Thailand. So far he has visited the majority of the most popular tourist destinations, but he also plans to explore some places off the beaten track, less touristic places. So far his favourite place is Koh Kood.
When asked to recommend which cities in Poland Thais should visit, he says: “There are so many interesting places in Poland that it’s quite difficult to recommend any particular one. Krakow is the top tourist destination. It's the former capital of our country, with the beautiful old town and numerous monuments including the Royal Castle. Just a few kilometres away from Krakow there is Wieliczka - the medieval salt mine. It is a Unesco World Heritage Site and is an absolutely unique place - a must visit as well
“Other cities with amazing architecture and beautiful old towns include the capital Warsaw, Gdansk and Lublin, but almost every big city in Poland has a beautiful old town and lot of historical monuments.”
He says another top attraction is Malbork, with has one of the biggest medieval castles in the world and is a also Unesco World Heritage Site.
“For people who like mountains, I would recommend Zakopane, which is called the winter capital of Poland,” he says.
Sagan says the best time to visit Poland is in summer, from May to September, when the temperature is usually between 20 and 30 degrees.