HappyFresh M’sia halts operations temporarily due to $$ issues & internal restructuring

Grocery delivery service HappyFresh has seemingly suspended its operations temporarily in Malaysia. 

On September 6, Rnggt reported that a notice under the HappyFresh app’s promotions tab stated that all stores on its platform will be temporarily closed until it can “resolve the issue”.

The online grocery delivery platform did not state what the issue is, nor did it provide a tentative time for when customers can expect the service to return to normal. 

Its notice only highlights that the company is taking longer than expected to resolve it, and requested customers’ patience while it continues its efforts.

Customer queries left up in the air

Founded in 2014, HappyFresh is operational in Indonesia, Malaysia, and Thailand. 

The e-grocer was formerly present in the Philippines and Taiwan, before pulling out of those markets in 2016, aiming for sustainability.

Now, HappyFresh isn’t just halting its operations in Malaysia, but it also suspended deliveries in parts of its Jakartan home turf, signalling deeper issues.

According to customer queries on a HappyFresh Facebook post, “technical issues” may have already been ongoing since the tail end of August. 

While HappyFresh has been addressing the comments online, the startup’s answers lack clarity on the reason behind its pause in the Malaysian market.

A commenter on the r/malaysia thread who’s been using HappyFresh since 2020 said, “Started noticing something weird when their own mart closed. Then they quietly also raised the delivery price from RM4 to 6 without telling consumers.”

However, we couldn’t verify what the Redditor meant by “when their own mart closed”, as HappyFresh never officially announced the permanent closure of its dark store operations, at least in Malaysia.

For context, the e-grocer introduced HappyFresh Supermarket, at MAHSA Avenue, KL in July 2022, promising cheap prices amid rising inflation. 

The brick-and-mortar dark store aimed to provide easy and convenient online grocery shopping with “free delivery and no out-of-stock moments”, while operating alongside other Malaysian supermarket chains. 

Slow down on the e-grocery boom

It can be said that the market for grocery delivery services has soured amid slowing economic growth, surging inflation, and higher interest rates, stated Bloomberg. 

This goes on top of customers no longer needing to rely on e-grocers as much as they did during the pandemic’s lockdowns.

Even Grab, which strategically acquired Malaysia’s Jaya Grocer in early 2022 has decided to shut its dark store operations in Singapore, Vietnam, and the Philippines. 

This move was to cut costs and streamline its delivery operations, retreating from the earlier strategy. 

Another Redditor on the r/malaysia forum implied that HappyFresh may suffer the same fate as the now-defunct honestbee. 

In July 2019, the Singaporean-founded e-grocer honestbee announced that it was suspending its operations, and eventually shuttered soon after due to troubling financials.

According to Bloomberg, Jakartan-based HappyFresh is also going through financial problems. It recently hired turnaround firm Alvarez & Marsal to review its accounts as it has been struggling to raise additional funds for its operations.

With at least US$97 million (about RM437 million) in debt financing, some of the company’s senior executives have allegedly stopped handling their day-to-day duties. 

We’ve reached out to HappyFresh Malaysia representatives to learn more about their situation, and they replied to us saying:

Apologies for the inconvenience as we are undergoing an organisational restructuring and strategising to ensure business continuity.

As we rechannel our efforts to reshape our company accordingly, our business operations will be placed on hold temporarily until we have reached a definitive and sustainable solution that would benefit and preserve the business interest of both parties.

It is with great honour to provide our services to our customers such as yourself and we hope that we can continue on giving our best effort to provide an excellent service for you. 

For Malaysians impacted by HappyFresh’s suspension and still depend on e-grocers for convenience, some alternatives you can check out include MyGroser, bawiq, GrabSupermarket, and pandamart.

Featured Image Credit: Vulcan Post