The Singapore court recently granted honestbee a four-month debt moratorium to 31 January 2020 so it can focus on restructuring its business.
In a company statement, honestbee CEO Ong Lay Ann said that a successful restructuring will help to recover its struggling business and gain a solid footing again.
Moving forward, honestbee will focus on its core grocery business in Singapore, namely its grocery delivery service and supermarket habitat.
Its key plan is to revamp the 60,000 square-feet habitat by late November, revealed Ong in an interview with The Straits Times.
For starters, it has added more variety to its food hall options such as a Korean fried chicken store, a bar and a Japanese rice bowl joint.
It is also “restocking the shelves with … more premium category items that you don’t really find elsewhere,” Ong told ST.
He adds that honestbee hopes to reposition itself in a more exclusive category instead of targeting the mass market, which no player has been able to “dominate” so far.
It’s not clear how much honestbee is investing in this revamping effort, especially since it still has an outstanding debt of over $280 million.
It owes 217 former employees close to $1 million in unpaid salary, but Ong assures that they will be fully paid by the end of January 2020.
For now, the firm is relying on shareholder support and key investor Brian Koo — ex-chairman who recently stepped down from the Board — for working capital.
It is also setting up a company in the United States, which will wholly own its business and assets through a new Singapore-incorporated firm.
According to Ong, investments would come in through the US company.
“Honestbee Is A Tech Company”
At the end of the day, Ong asserts that “honestbee is a tech company” so its no surprise that its long-term plans are tech-driven.
For one, it is looking to revamp its app, which currently houses honestbee’s online services and habitat’s physical store.
It is mandatory for habitat visitors to download the app, which is used to scan for entry and pay for for food and groceries on-site.
Ong feels having different functionalities in a single app can be confusing for users so they are now building a standalone app for habitat.
About 30 people in Vietnam are currently working on the app, which will be redesigned to streamline scanning and payment functions.
Honestbee expressed its intentions to invest further in tech development to reduce reliance on human labour and manual processes.
Reflecting on past mistakes, Ong said honestbee used to always “throw money … or people … at the problem,” which results in a high cash burn rate.
It lost close to US$100 million last year, and its average monthly cash burn rate for the first half of 2019 was US$6.3 million (S$8.7 million).
Some Former Employees Returning To Honestbee
Currently, honestbee only has 10 employees at its Singapore headquarters, 177 habitat staff and 54 regional employees.
Their staff headcount has significantly reduced, but Ong said that some former employees are returning to honestbee.
He added that they used to have a large tech team in Singapore, but it was not “cost-efficient” to continue to have them based here because majority are foreigners.
It’s now considering to hire full-time and contract staff to expand its tech team, though Ong did not disclose how many people it intends to hire.
Regardless, honestbee’s priority now is to regain the confidence of investors, employees and staff through this revamp.
Featured Image Credit: honestbee