Online supermarket Rayon launches with focus on local brands

Smartmat, the company behind the Foodbag meal boxes, is launching an online supermarket called Rayon. The supermarket offers the lowest delivery charge on the market, but the product range is not like any other typical supermarket.

Not a price breaker

The new pure play company wants to cover the whole of Belgium, with next-day delivery in Flanders and Brussels. In Wallonia, the new player offers delivery three times a week. Manager Mattias Decuypere told Belgian newspaper Het Nieuwsblad that “the whole of Belgium” is taken literally, up to the borders with France or the Netherlands. And all that for a delivery fee of just 4.95 euros, the lowest rate on the market.

According to the meal box delivery company, this is a logical step: Rayon uses the same supply chain and couriers as Foodbag and can therefore cover the entirety of Belgium, Belgian newspaper De Tijd notes. Moreover, the company has gained a lot of know-how and data about the food market. The newcomer does not want to be a price breaker: “We want to position ourselves between Carrefour and Delhaize” – somewhere in the above-average (but not near the highest) price scale.

Local, organic and sustainable

Rayon does this with a product offering that is difficult to compare to other supermarket chains. The new online supermarket wants to distinguish itself with a strong focus on local and high-quality products. Several organic, sustainable and local suppliers are put in the spotlight on its website, such as dairy producer Hollebeekhoeve, organic bakery De Trog, sauce producer Natura, and butcher Millevaches.

The company makes distinctive choices: on the virtual crisps shelf, you will find small niche brands and Croky, but not Lay’s. The rice is by Lima, not Bosto or Ben’s Original. The only A-brand among the pasta offering is De Cecco, with two products. Soubry, Barilla and Panzani are not to be found. Nor can you find Coca-Cola in this store.

“Fresh food is the next wave”

This indicates that Rayon primarily aims at conscious consumers with a substantial budget rather than bargain hunters. In other words, families with the same profile as the users of meal kits – a market in which Foodbag has a 30 % market share in Belgium, delivering to 10,000 families every week. But the masses have not (yet) been reached.

Decuypere is convinced of the potential; he sees a major shift in purchasing behaviour: “Fresh food is the next wave in e-commerce, after electronics and clothing. We already see it in prepared meals: chips used to get picked up at the chip shop, but are now increasingly delivered to people’s homes. More people will also have their groceries delivered to their homes to save time.”

Challenges

Is the business model sound? According to retail professor Gino Van Ossel, the big question is whether it can be profitable to deliver everywhere. Many delivery services are limited to large, densely populated urban areas. Building brand awareness will also be a challenge: the newcomer does not have the same budgets as the established players.

Finally, there is the price issue. Rayon does not have the same purchasing power as the large chains and will, therefore, inevitably be somewhat more expensive, which is not an advantage in times of inflation and increasing price competition. On the other hand, the online supermarket aims at a specific audience that is willing and able to pay for service. Moreover, the company has interesting contacts: after all, Foodbag’s main shareholder is Korys, the Colruyt family’s investment fund. That may lead to new perspectives.