Weee! The $4B Go-to Ethic E-Glocer
Over the year, Weee! has created incredible values as the Go-To ethic E-glocer in the U.S.
Where can I get Chinese food?
As an international student who grew up in China, where food is a big part of life, I have always been craving hometown food. As going to local authentic Chinese restaurants is expensive and often limited in choices, I want to cook the food myself. Fortunately, I have lived in places (L.A., San Diego, and Boston) where Asian grocery stores like 99 Ranch Market, Super 88, or H-Marts are nearby, and I can go for a quick grocery trip when I have time. However, for many of my friends who live in less populated places in the U.S., they do have the luxury of mine. In addition, I often do not have time to drive to Asian grocery stores, which are usually further away from American grocery stores. What should we do now?
Weee! Comes in Clutch
In 2015, a first-generation Chinese immigrant named Larry Liu discovered this struggle, and he figured out a solution: Weee! (exclamation mark included in the name). Weee! is a platform and an E-glocer that combines ethnic grocery stores and Amazon Fresh. Essentially, Weee! sells ethic-specific groceries, such as raw materials and read-to-eat snacks similar to those sold in typical markets in China and Mexico, on their mobile or web applications. It also provides delivery service right to your door from its warehouses.1 While most popular products on the platform are sold directly by Weee!, third-party individual sellers or distributors are also selling their products using Weee!’s platform for a 10% fee for the delivery service (plus some mischievous fees such as re-delivery fees, etc).2 Weee! is not only able to provide competitive prices but also able to provide free 2-day delivery for orders over $35. They do not use any package delivery providers like UPS or FedEx but use their network of local drivers to deliver fresh items through the pre-planned delivery routes, given that the 2-day delivery provides flexibility to make such pre-planned delivery routes easy. Furthermore, given the perishable characteristics of the groceries delivered by Web!, the company provides sealed and insulated packaging with dry ice for the items that need such conditions.
For those who live far away from their ethnic grocery stores, Weee! provides solutions by targeting the specific needs of authenticity. For those who have access to nearby ethnic grocery stores yet do not have the transportation or time to go for a trip, Weee! deliver what they want right to their door. Based on my personal experience as an international University student, most of my international student friends, one of the main targets for Weee!, are using the company on a weekly or even daily basis.
Scalability and Sustainability
Weee! was a hit as the business has excellent scalability and sustainability. Since its creation in 2015, it has experienced significant growth in monthly active users on average, exceeding 100% year over year. It has served more than hundreds of thousands of households across over 40 states (up from initially five states in 2017) with millions of order fulfillment.3,4 Interestingly, the COVID-19 pandemic also boosts their year-over-year growth to 150% as they provide contactless delivery of fresh groceries right to customers’ doors.1 Such growth has been accompanied by heavy V.C. investments through multiple Series funds led by well-known investors such as SoftBank, marking the valuation of Weee! over $4B in 2022.5
Weee! invested heavily in the technology of their platforms, supply chain, and inventory management systems to provide better and faster service. This focus on technology from “day 1” also helped with the company’s sustainability with infrastructures adaptable to new technology with less tech debts, an everyday thing shown to many traditional food companies.6
Security Breach
As a technology-based company, Weee! suffered from data breaches. In early 2023, a cyber attack on Weee! led to the exposure of personal information of 11.3 million orders, including full names, email addresses, phone numbers, device types, etc.7 In fact, two of my close friends personally experienced the consequences of the breach, with many scam calls or advertisements sent to their phone numbers, email addresses, and even home addresses that essentially drove them away from using Weee!
Citations
1. https://www.cnbc.com/2022/05/20/weee-taps-crazy-rich-asians-director-jon-m-chu-in-push-for-grocery-growth.html
2. https://www.sayweee.com/en/about/terms-of-service
3. https://www.grocerydive.com/news/online-grocer-weee-aims-top-grocer-for-asians-north-america/586161/
4. https://www.grocerydive.com/news/how-weee-is-leveling-up-to-become-the-go-to-ethnic-food-company/610635/
5. https://www.cbinsights.com/research/weee-competitors-freshgogo-umamicart-yamibuy-asian-family-market/
6. https://progressivegrocer.com/how-e-grocers-are-setting-pace-change-grocery
7. https://www.bitdefender.com/blog/hotforsecurity/hackers-who-breached-grocery-service-weee-leak-details-of-over-11-million-orders-online/
Great post, Sam! As a user of Weee!, I can vouch for the convenience of getting Indian groceries through it.
I’m curious about their future expansion plans. Do they have intentions to diversify their offerings by adding more types of ethnic groceries, or will they focus on further enhancing their existing selection, particularly in high-demand categories like Chinese and Indian? Additionally, are there considerations for entering markets with lower demand for ethnic groceries, or do they plan to target specific regions with a strong demand for their current offerings?
Thanks Sam! I think the diversity of things for target users and the delivery speed are keys to those E-glocer platforms. I used to like the platform a lot. With such low commission fee but rich diversity and high supply chain efficiency, does Weee! get enough profits for maintaining its cash flow? Do Weee! only target Chinese people, Asian people, or all people in US? Besides, I’m also a victim of Weee!’s security breach and never used the platform after the event. How big is the impact for Weee!? Does the event indicate that data security and reliability is the top consideration for people when using all kinds of platforms?
Great post, Sam! What are their different categories of target consumers – is it international students, immigrant families, immigrant workers? If so, are they building out different value propositions and monetizing strategies for each of these? I see the possibility for a subscription service here for all of these categories to ensure recurring revenues. Also for the student and worker verticals, there might be a possibility for partially cooked meals sold by the week, given their lifestyles. There also might be a possibility to bundle ingredients for meals to easily up sell. Are they thinking of verticals in this way rather than the traditional grocery model?
Thanks Sam! Do you believe that Weee!’s biggest competitive advantage has been their supply chain management? Since you mention that they mostly cater to audiences that typically don’t have access to local ethnic groceries, I imagine they must manage a complex system of delivery operations that would be hard to centralize across a wider (and likely less dense) geographic area. However, as with most networks, once they get to a certain scale, it actually allows them to attack the incumbents (in this case, more traditional grocery stores in cities), so perhaps they’ve simply outgrown this problem. Do you know if they are still leveraging small, third party delivery services? As the company has scaled significantly, I imagine that it would be hard for them to find vendors to keep up; but while it may make sense to operate an in-house delivery team, that also dramatically increases their expenditures and operations.