When Andrea Xu started gauging interest in an online Asian grocery store to potential investors a few years ago, she was met with skepticism: Asian groceries seemed too niche, they said—was the market big enough? Did people really need this?
Xu didn’t understand the reluctance. As Chinese immigrants in Spain, her family had difficulty getting Asian ingredients during her childhood; grocery shopping sometimes meant taking day trips to other towns. Access got easier when she moved to New York 10 years ago and found herself near Chinatown and Koreatown. But while delivery services had made it possible to get avocados from Whole Foods or mac and cheese from Foodtown with just a few taps of your finger, Xu found that ease didn’t extend to Asian groceries.
Her Asian American friends echoed similar experiences. “We always love going to Chinatown,” she said. “But at the same time, it was shocking that we didn't have the same level of convenience for something that was so huge in our daily lives.”
With the COVID-19 pandemic making the demand for easy grocery delivery more clear—and online grocery sales shooting up over the course of 2020—Xu and co-founder Will Nichols started Umamicart, which launched on March 1 of this year with over 500 ingredients. With fresh produce, pantry staples, and frozen meat and fish, Umamicart wants to be a one-stop online shop for Asian groceries. It currently delivers to New York, New Jersey, Connecticut, Delaware, Pennsylvania, Virginia, Maryland, and Washington, D.C., with same-day delivery in New York City, and hopes to expand nationwide.
Xu and Nichols aren't not the only ones trying to solve the problem of access and convenience. As additional entrepreneurs enter the growing online Asian grocery space, and large chains like HMart and 99 Ranch start widening their delivery options, specialized ingredients may soon be more accessible than ever.
With major food platforms like the New York Times and Bon Appétit diversifying their recipes in recent years, home cooks are finding themselves needing to track down ingredients like Japanese yuzu kosho or Taiwanese sacha sauce. But unless you live in an area with a large Asian population, these options can still be hard to find. The “Asian” aisles at mainstream grocery chains offer only basic ingredients, and in many parts of the United States, Asian grocery stores are sparse. And even where they do exist, they might be unavailable on delivery platforms like Instacart, or have a different specialty than what you’re looking for—a Korean supermarket generally has fewer options for Thai cuisine. As a result, you often have to make do with whatever you can find.
In the absence of Asian grocery stores, you can try the internet. You might find what you’re looking for on Amazon, but that’s primarily shelf-stable pantry items, often with jacked-up prices and with little clarity about sellers. You could buy one or two things straight from the producer, if they have their own online shop, or try an older marketplace like Asian Food Grocer or Yamibuy—but neither of those places offer things like produce or meat, so you'd still have to round out your shopping elsewhere. This is certainly more difficult than being able to buy everything you need in a single Safeway trip, and that is the problem that the entrepreneurs in the emerging online Asian grocery market want to solve.
Based in Fremont, California, Weee! is one of the top contenders in the online Asian grocery space, with over 7 million registered users and an estimated valuation of $2.8 billion as of this March. CEO and co-founder Larry Liu says the idea was born out of his difficulty finding Chinese groceries after moving to the United States from China in 2003.
In 2015, Liu noticed the popularity of grocery-buying groups within the Chinese community on the messaging app WeChat. One time, a woman in one of his neighborhood groups had a connection to a fisherman in Half Moon Bay; after gauging interest from the WeChat group, she was able to source thousands of dollars of Pacific black cod to be caught and delivered to their neighborhood.
Realizing he wasn’t alone in his search for Chinese ingredients, he set out to solve the problem of the “primary grocery trip,” envisioning a destination where Asian American shoppers could get everything they needed without having to shuffle between stores. The way the thinking went, Liu recalled, was: “We should not think about only selling Chinese groceries; we should think about [it like] we're selling groceries to Chinese Americans. It's very different—Chinese Americans shop everywhere.”
Since it opened for business in 2015, Weee! has grown by around two-and-a-half times annually, with its largest growth in 2020, and recently launched nationwide shipping. And though it started with a focus on hard-to-find Chinese ingredients, Weee! has since expanded across a number of different Asian cuisines and sells staples like milk and eggs. Customers now shop through the platform an average of 1.4 times per week, Liu said.
For Ryan Kim, who started the Brooklyn-based Kim’C Market in 2019, the goal isn't just selling Korean ingredients. It's making high-quality, well-sourced Korean products available online—the sort of small-batch, premium ingredients you’re less likely to find at Asian grocery chains. Before starting the company, he’d see “lucky” friends of his get shipments of these items from their families in Korea, but because they're more expensive and come from producers with less name recognition, large stores are less likely to sell them, Kim explained.
The company imports everything from Korea and visits each producer and farmer to ensure that every item they sell is well-vetted. “Our goal was to become like a Whole Foods of Asian groceries,” he said. Kim’C Market—which now delivers all over the country—has gone from five products to 180. The store's most popular item, Kim says, is a 1000-day-fermented gochujang, a red pepper paste.
Where newer online options like Weee! and Umamicart excel is their ability to deliver fresh items like meat and produce. Enabled by the company’s investment in infrastructure, produce is Weee!’s biggest category, and the store sells vegetables that can be harder to find in mainstream supermarkets, like chrysanthemum greens and nagaimo, mountain yams that are native to East Asia. Produce was also a priority for Umamicart co-founder Xu, who found in her market research that people cooking with Asian products often go through produce quickly. Fruit has been particularly popular—Umamicart now sells options like limited quantities of Hami melons and trendy Dole Pinkglow pineapples, which go for $18 each—as are harder-to-find cuts of meat, like pork ribs that are cubed instead of racked.
These categories can be a challenge for smaller sellers, though. Katrina and Kenny Camarillo, who started the online Filipino grocery store Sarap Now in 2018, started selling frozen foods this year. But because of the cost and complication of ensuring that items stay cold when shipped, they’re only able to offer them for West Coast delivery. “We just don't have the resources that Amazon does, and we don't get the same rates that all these big companies do,” Katrina said. “Shipping can get really very costly, and I think that as much as people still want convenience, there's still that price aspect.”
In 2020, Weee! added Hispanic groceries—which are also generally relegated to their own specialized stores or a small aisle in mainstream grocery stores—as it moves toward becoming, per the company’s media kit, “the primary source of groceries for Asian and Hispanic communities in North America.” One reason these niches have, to this point, been underserved by grocery delivery is that investors don't always understand the space, Liu suggested, because they’re not from these communities or in touch with their conversations. “When I first started, it was very difficult to raise capital, for example, because people were like, ‘What's 99 Ranch? I've never heard of it.’ If they don't even know there's a problem, it's very difficult for someone to try to solve it,” he said. (According to a Deloitte survey of venture capital firms published earlier this year, white employees make up 72 percent of investment professionals, though this has decreased from 76 percent in 2018.)
“Because our company's extremely [diverse] [...] we all know this problem is very acute,” Liu said. But investors from similar backgrounds understood the need, he said, and even the investors who were hesitant changed their minds when Weee! proved it could grow fast and achieve scale.
As Umamicart grows, Xu says she intends to keep the focus on intentional curation. “If we wanted to expand our product to meet thousands of [products], we could do it easily, but we want to stay away from that,” she said. Umamicart's current offerings strike a balance between pantry staples employed by parents and aunties—Three Crabs fish sauce, for example—and newer options from Asian American founders, like Fly By Jing chili crisp and Us Two tea. “We’re willing to have a smaller catalog, so long as every single product on there, we are super confident that we love, and that we love the supplier and we trust the supplier.”
Sarap Now, Kim’C Market, and Weee! all reported a boost in sales during the pandemic. Compared to last February, Kim estimated that Kim’C Market’s sales have jumped about 450 percent. That growth, he said, has resulted in a transformation of the company's customer base: Before the pandemic, when they mostly pulled people in through tasting events, about 80 percent of their shoppers were non-Korean. Now, Kim says, the breakdown is more like 80 percent Korean and 20 percent non-Korean—a development he attributes to word-of-mouth promotion over the past year.
Xu says she still loves shopping in Chinatown, and encourages others to do the same. That’s especially important given the pandemic’s effect on Asian-owned businesses, who were hit the hardest of all demographic groups, with a 20 percent decrease in working business owners between last February and December, CNBC has reported. But these new online options seem to be for a certain kind of shopper: people who are used to instantaneous online shopping, those who aren’t able to go out of their way for ingredients, and those who are used to that increasingly popular style of well-branded, highly curated online shopping experience. (Despite Umamicart’s obvious appeal to millennial shoppers, though, Xu says that their consumer base spans all ages.)
Although the Camarillos initially thought their sales would be driven by areas with fewer Asian grocery stores, Sarap Now gets a large number of orders from California, New York, and New Jersey—places with large Asian populations and a higher density of specialized grocery stores. To Katrina Camarillo, this suggests that “people are actually really shifting to buying online, even for groceries.” This year, Sarap Now expanded to include non-Filipino ingredients like furikake and even new Filipino cosmetic brands, like Sunny’s Face.
Together, the stories of these online retailers are testament to the potential in catering to markets once deemed “too niche.” While other players in the grocery space market to the broad mainstream, Larry Liu sees Weee!’s success as a result of its focus on a specific audience. “Your best assortment means different things for different people, so our approach is [to] find the customer segment and source the best assortment for them, offer them the best price and convenience,” he said. Not everyone thinks that way, he added, but he attributed this perspective to the unique life experiences and backgrounds of the people who have built the company from the ground up.
“I feel like a lot of things happening in history [are] not because someone is super brilliant," he said. “It's because someone is uniquely positioned to see a mega-trend that other people are not positioned to see.”
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