- Entrepreneur Andrea Xu’s third-culture upbringing inspired her to found online Asian grocer Umamicart.
- Umamicart launched on Monday and sells a mix of classic and new Asian brands directly to consumers.
- “The pandemic really showed that the time is now,” Umamicart COO Will Nichols told Insider.
- Visit the Business section of Insider for more stories.
Like many third-culture kids, Andrea Xu connected to her heritage through the food her family ate.
Born in Spain to parents from China, Xu grew up eating Asian foods with her parents at home. She loved not only Chinese foods, but a diversity of Asian cuisines, including Japanese and Korean. However, that love of Asian foods was also alienating at times – Xu was often the only Asian person in the room as a child growing up in Spain.
“There was a part of me that was unrelatable to everybody else,” Xu told Insider.
That changed when Xu’s family moved to New York City in 2011 and for the first time, Xu came into contact with many people who looked and ate like her.
“When I came to the US, it meant so much to connect with so many other Asians to whom these flavors also meant so much,” Xu said.
Then the pandemic hit, and Xu realized that existing grocery delivery services often didn’t sell the kinds of foods she was looking for. After talking to her friends, Xu proposed an Asian specialty online grocery business to FJ Labs, the New York venture capital firm where she remains an entrepreneur-in-residence. FJ Labs invested an undisclosed amount, and Xu brought on Will Nichols, another investor at FJ Labs, as COO and cofounder.
Together, they created Umamicart, an online Asian grocer that launched Monday in the New York metropolitan area and select zip codes in Delaware and Pennsylvania. The website will offer a combination of foods from classic Chinese, Japanese, and Korean brands, as well as newer brands founded by Asian Americans. The shopping experience will be supplemented by recipes and cooking kits for classic East Asian dishes like mapo tofu, dumplings, and hot pot.
According to Xu, Nichols was the obvious choice for COO. Nichols spent three years at Instacart working in operations, eventually rising to become the general manager of its New York City market. Xu and Nichols had worked together at FJ Labs for a year before founding Umamicart.
“Over the past year, we’re seeing consumers are increasingly buying groceries online and are more comfortable buying products based on a description or photos,” Nichols told Insider. “The pandemic really showed that the time is now.”
Last year saw the explosive growth of grocery delivery services like Instacart, which reported its first-ever profit in April after hemorrhaging $US25 ($32) million a month in 2019. A February 2021 Insider Intelligence report also predicts that online grocery will reach 55% of US consumers by 2024, citing segment growth accelerated by the pandemic.
That bodes well for Umamicart. But the upstart company isn’t the only Asian-focused online grocery retailer in the market. San Jose-based Weee! raised $US35 ($45) million in Series C funding in August 2020. One month prior, in July, Chicago-based Chowbus, which originally partnered with restaurants but has since expanded to grocery, announced it had raised $US33 ($42) million in Series A funding of its own – led by Umamicart investor FJ Labs. Weee! was founded in 2015 and Chowbus in 2016.
Appealing to both consumers and producers
Bill Bishop, cofounder and chief architect of Brick Meets Click, a consultant firm with clients in the grocery retail industry, anticipates that the growth experienced by the online grocery sector in the last year will persist even after the pandemic subsides. Supermarket News reported in September that the online grocery market was valued at around $US106 ($136) billion in 2020, and should grow to $US250 ($322) billion by 2025.
“Because of the convenience of online shopping, we find that people who have tried it don’t want to go back to the old way,” Bishop told Insider. “We see households shifting more of their spending online.”
At the same time, shipping groceries to customers’ homes can be especially advantageous for retailers and producers alike. Bishop said it’s more efficient for retailers to consolidate inventory in distribution centers and ship items directly to customers than to first ship stock to brick-and-mortar stores. And producers and manufacturers also have “substantial” incentives to cut out the middleman.
“A boost in the Asian grocery market to online selling is going to occur just because it’s very appealing to producers or wholesalers to skip the intermediaries and go directly to consumers,” Bishop said.
That appeal has worked in Xu and Nichols’ favor when it comes to sourcing. Umamicart works with largely immigrant-led businesses and mom-and-pop suppliers that don’t have an existing online presence.
“A lot of the businesses that we work with are mostly offline and have been disproportionately hit by the switch in consumer behavior during the pandemic,” Xu said. “For us, it’s really important to help them reach that end consumer in a way that benefits them as well.”
Xu says the variety and accessibility of ingredients distinguishes Umamicart from other online Asian grocers available in the market, and that Umamicart isn’t specifically targeted towards Asian Americans, but rather towards anyone who “loves Asian cuisines and loves more than one at a time.”
As of February 24, 2,000 people have signed up for Umamicart’s services, pre-launch. Xu and Nichols plan to expand quickly to other markets, and are working on adding Southeast Asian offerings to the website.