And in April, during the Easter week holiday rush—a peak business period—Honestbee’s business in Catholic-majority Philippines paused indefinitely. The situation has only worsened since.
Restoring investor confidence
Honestbee is said to have just 10 remaining employees in its Singapore headquarters, 177 employees at its Habitat supermarket, and another 54 spread across the rest of the region—some of them supporting the Singapore operations.
Sng and co-founder Jonathan Low resigned as the full scale of the company’s mismanagement emerged this year. The Ken contacted Sng for comment on what reportedly transpired under his leadership, but received no response.
The third co-founder, Isaac Tay, may well have seen the writing on the wall when he left the company in 2018 to become a standup comedian, according to reports.
Facing demands from creditors and suppliers, Honestbee eventually sought a debt moratorium from the Singapore High Court, which gave the company until 31 January to get its house in order.
Honestbee’s newly installed CEO, Lay Ann Ong, is spearheading the restructuring of the company’s debt, the plans for which were earlier laid out as follows:
repay small creditors owed less than $370
transfer Honestbee’s assets to a new Singapore-registered company and set up a US parent firm
all other creditors to swap out their claims for shares in the US entity
Honestbee’s major creditors—Koo and entities linked to him—to provide additional conditional equity investment in the US entity
Ong’s team had earlier revealed plans to strike partnerships or joint ventures to help pull Honestbee out of the rut.
That means the possible deal with JG—at least in the Philippines, if not at the parent level—may be the first of a string of investments the grocery delivery service may secure.
Honestbee declined to comment when sent a detailed set of questions for this story. JG did not respond to The Ken’s request for comment.
JG, however, is keen on the deal, said one of the people familiar with the negotiations. Honestbee had become a huge sales channel for affiliate Robinsons, a company worth $2.3 billion. The person explained that with Honestbee’s pullout from the Philippines, Robinsons lost almost a billion pesos ($19.8 million) in annual revenue, having accounted for most of Honestbee’s GMV in the country—and it wants that sum back.
Honestbee also complements Robinsons’ wide range of sales channels for fast-moving consumer goods. Apart from supermarkets, Robinsons is in the business of convenience stores and drug stores, among others. It also supplies goods to another JG investee Growsari, a homegrown business-to-business startup that delivers to family-run village stores, popularly known as sari-sari stores. Such outlets dominate the food retail market, which accounts for 58% of total retail in the Philippines.
But the Gokongwei family’s ambitions go way beyond online groceries.
“The group has been late to the e-commerce game and they see Honestbee as a quick route to the online market,” said one of the people close to the talks. In other words, Honestbee will serve as training wheels for JG’s own e-commerce arm.
Robinsons already has an online store on Lazada. But JG and its retail affiliate both want to put all their goods behind their own dotcom store, and blend that with their offline offering to build what the industry calls omnichannel retailing.