ETHNICGROCER HOPES TO BECOME THE 'AMAZON' OF ETHNIC GOODS

JON SPRINGER

EVANSTON, Ill. -- EthnicGrocer.com here is literally taking on the world.

The year-old e-commerce firm intends to become the largest retailer of specialty foods on the Internet with a two-tiered strategy that targets adventurous cooks as well as U.S.-based immigrants seeking authentic foods from home, Sami El-Saden, vice president and general manager for EthnicGrocer, told SN.

The site offers more than 20,000 items, which customers can locate by product or any of 15 countries. The company also operates subsidiary portals targeting its three most popular groups of ethnic shoppers: QueRico.com, which sells Latin foods and related products; Gongshee.com, which sells Chinese foods and products; and Namaste.com, for Indian foods and products.

El-Saden said each of the portals is a potential $1 billion business, including not only groceries, but books, videos and items for the home.

"We want to take an Amazon strategy to ethnic groups," said El-Saden, referring to the Seattle-based on-line bookseller that has evolved into a multiproduct retailer. "We feel we could become a mall for consumer products for these shoppers. No one has done that yet."

El Saden said the portals, Gongshee for instance, has caught on with foreign students attending U.S. colleges.

"The college-age Chinese tend to be very attached to their homeland and want to live the traditions of China while they're living in the United States," El Saden said. "There's a power in targeting people with such common needs."

EthnicGrocer's subsidiaries are staffed and run by people fluent in the language of -- and in many cases, originally from -- the areas served, said El Saden, who spent eight years working with ethnic products at Nestle USA's culinary division. Bilingualism is a requirement of all the job openings listed on the company's Web site.

The company sees the cooking enthusiast as a different kind of niche customer, El Saden explained. "We're not only targeting ethnic people but also people who love to cook," he said. "We want the kind of people who are the first to dine at the new restaurant in town. We also try to demystify ethnic foods."

The EthnicGrocer home page allows consumers to select a "destination" page featuring recipes, information and featured products from a particular country. Product descriptions are hardly necessary for an on-line shop selling cornflakes or white bread, but important when the offerings include peeled sugar palm fruits from the Philippines or Vietnamese Nem Fish Sauce.

Its wide array of products and unique positioning will help carve EthnicGrocer.com a niche in the business-to-consumer market, said Binod Khosla, general partner for Menlo Park, Calif.-based venture capital firm Kleiner Perkins Caufield & Byers, an EthnicGrocer investor.

"There is no simple way for consumers to get a large variety of product options using any other means when it comes to ethnic grocery products," Khosla told SN. "There is not enough volume of sales in any geographic area to justify such a large SKU count."

El Saden said the distinctiveness will make EthnicGrocer attractive to other e-commerce companies.

"Companies like Webvan are going to need us because no one else is going to have the expertise and the supplier relations that we do," said El Saden.