Mailpac Group, which is heavily in the business of e-commerce solutions, has, through its subsidiary Mailpac Local, launched an online grocery store to increase its market share, with a plan to retail approximately 5 products. at 15% less than traditional brick-and-mortar grocery chains and stand-alone stores across the island. Mailpac doesn’t seem to be put off by an increasingly crowded market space, reflecting confidence that its price-cutting business model will put it ahead of the pack.
Mailpac, admittedly agile and fast growing, is seeking a greater share of a market where online grocery shopping is already offered by existing and emerging players, and with the chains it seeks to sell at lower prices. , it has also stepped up its own online sales platforms over the past year. specifically. Bulk products seller PriceSmart and food manufacturing and distribution conglomerate Seprod are among the large companies already offering e-commerce services to their customers. Another major food manufacturer and distributor, GraceKennedy, said it also plans to add a delivery component to its online service that now stops at curbside pickup.
Mailpac Local Grocery hopes to gain a competitive price advantage over large supermarket chains through its investments in technology and infrastructure, which company chief Khary Robinson says helps the online store secure. products at a lower price reserved for large distributors. Mailpac will add its own mark-up to the products, but expects consumers to see what Robinson describes as “significantly lower prices” on their monthly purchase invoice, a hopefully branching off of its supply agreements and discounts and promotions that it plans to roll out. .
The company, which will also provide door-to-door delivery to its buyers, is a development on the online shopping, in-store pickup and delivery service it offered during the height of the COVID-19 pandemic, in partnership with the major grocery wholesaler and retailer PriceSmart. , buyers subject to a government-imposed foreclosure on the home or suspicious of crowds.
Prior to the Mailpac Local Grocery Store launch, the company invested in acquiring five new vehicles, implementing a virtual aisle navigation feature on its online platform, and adding 30 new hires for serving its delivery partnerships which also included Hi-Lo Food Stores and The Stationery Center.
Mailpac Local has halted deliveries to Hi-Lo grocery stores, but will continue its relationship with PriceSmart. Robinson says Mailpac Local Grocery will stock products in addition to those sold by PriceSmart.
“PriceSmart will remain a partner of Mailpac Local as they provide our customers with unique (products) and prices. However, we have terminated the sourcing agreement with Hi-Lo as we strive to provide our customers with a lower cost grocery solution coupled with the convenience of online shopping, ”said Robinson. , in response to Financial Gleaner queries.
Now, goods for sale to Mailpac customers are purchased by a company incorporated under the umbrella of Robinson’s investment holding company, Norbrook Equity Partners Limited. Robinson declined to name the new supply arm.
“We have a supplier, which is a separate Norbrook company, that was formed to provide consolidated wholesale items to business / retail customers. Mailpac Local is the company’s first customer, ”Robinson told the Financial gleaner.
In the first six months, the online grocery store is expected to add $ 600 million in revenue to Mailpac Local projects, Robinson.
For the six months ending in June, Mailpac Group, the Jamaica Stock Exchange-listed junior company which includes Mailpac Local and courier company Mailpac International, made $ 198 million in profit on revenues that have reached $ 896 million.
Mailpac Local became operational in February 2016 and claims to have invested approximately $ 180 million in expanding the e-commerce delivery business. Robinson estimates spending for the local Mailpac grocery store now at $ 30 million.
The company’s decision to add an online grocery component to its courier and delivery business comes months after Robinson, its chairman, expressed concern that Mailpac Group would potentially lose a part. business he had gained during the pandemic from historical customers who were traveling and shopping again, following the lifting of COVID-19 restrictions.
Since the pandemic, Mailpac Local’s customer base has grown from 700 at the start of March 2020 to just over 2,000.
Robinson said Mailpac observed how US e-commerce giant Amazon dominated the space in the United States. With Amazon’s progress in mind, Mailpac said it has made strategic investments to enable the company to deliver what it has called an “unmatched value proposition to consumers.”
Norbrook Equity, the holding company, recently received US $ 17.5 million in financial support to fund new acquisitions and expansion plans.
Norbrook Equity’s current operations include the Mailpac Group courier service, the Hertz car rental franchise and the Express Fitness gym chain. Its businesses and brands also include Pure National Ice Company, SNB Creative Group (Starlight Productions and Blueprint Events), Norbrook Water Company which markets JamAgua branded bottled water and Norbrook Transaction Services, operating under the ePay name.