Postcard from Jakarta: Monika Rudijono on e-commerce and tech start-up scene in Indonesia

Monika Rudijono, President Director, Grey Group Indonesia, shares her perspectives about the E-Commerce and Tech Start-Up scene in Indonesia, and how it has revolutionized the landscape.

Picture this: it’s D-Day, and Hari Raya Lebaran (the biggest Moslem holiday festival) is in full swing. No maids, No drivers. The mall is packed to the brim, but half the shelves in the supermarket are empty. Mother-in-law is in panic mode as she realizes that she has no Ketupat (rice cakes) for her Opor and Sayur Labu dish (traditional Lebaran dishes). Of course, that means no quiet time in front of the TV till the issue is resolved. Donny (not his real name) therefore has to bite the bullet and take care of it. Unfortunately, four phone calls later, he realizes that no restaurant will sell him just Ketupat, and he is unwilling to brave an hour of traffic jam to get to the mall.

Fear not, YesBoss is here to help! Donny texts: “I need 20 Ketupat delivered to my house” to Cindy of YesBoss. A few text-messages later, Cindy confirms Donny’s order with: “Boss Donny, a Go-Jek is on the way with the 20 Ketupat at Rp 100,000 (US$8), #YourTimeMatters”. Later, in the pouring rain, a drenched Go-Jek driver rings the door and delivers the goods – all fully paid for with the Go-Pay wallet, of course.

Jakarta used to be quite different three years ago. There were no Tokopedia with its 300,000 merchants that stock all kinds of Anna (of Frozen fame) costumes and knick-knacks from China, as well as dried salted anchovies (local delicacies) from Medan. No Go-Jek drivers (the 200,000-strong army of Uber on motorcycles) to weave you in and out of traffic-jams, and certainly none of its Go-Food service (food from any restaurant YOU know, at your fingertips, delivered within the hour). “Go-Jek” was a virtually unknown brand, not a popularly recognized verb (“Just Go-Jek it, laah!”) today. A year on, Go-Food now delivers more food each day than the ENTIRE food delivery startup scene in India combined.

The real impact goes beyond merely (and metaphorically) feeding the consumerism-minded Jakarta upper-class.

Anna (not her real name) was a housewife, till she decided to supplement her husband’s meager income with her online business. Four years and 30 employees later (including her husband), she is among the top 1,000 sellers in Tokopedia.

Amir (not his real name) was laid off when his company closed down. A friend suggested a stint as an Uber driver. Now, he braves 10-12 hours of crazy Jakarta traffic to take home Rp 12 million (US$950) a month, a sum far exceeding his previous income.

Joko (not his real name) used to be amongst the thousands of Ojek (motorcycle taxi) drivers hanging around at street corners, waiting for the occasional customers. Today, he makes up to 8-10 million (US$600-750) a month onboard the Go-Jek platform – about three times Jakarta’s already high minimum wage standard. This demonstrates how a man with no high-school education can be perfectly savvy with using a smartphone, given sufficient incentive.

The Tech transformation has spread its reach far beyond Jakarta, and embraced up to 150 million Indonesians on the other 13,600 islands. Here are some hard facts:

·      More than 60% of Tokopedia’s active merchants are from outside of Jakarta, with a lot of them being part-time sellers without a physical store. Similarly, 80% of Tokopedia’s purchasing customers live outside of the capital city.

·      Sale Stock, a fashion-centric online store, moves almost $3m worth of goods monthly. Half of them to customers outside of Java, with a majority having never purchased online before. Almost all of the purchases were made via mobile, with even far-flung Timika in West Papua making it onto the list of top-purchasing hotspots.

·      E-commerce has grown 70% year-on-year in 2014 and 2015, and it is expected to maintain that pace till 2020, where it will comprise almost 8% of Indonesia’s total retail figures.

Therefore, to say that Indonesia is going through an E-commerce revolution is an understatement.

Finally, the government has also starting to pitch in – President Jokowi has recently announced his “Indonesia – Digital Energy of Asia” Plan and E-commerce Roadmap initiatives, which will coordinate efforts from 8 government ministries to push Tech as an avenue to empower SME growth. The Tech revolution, will be used to empower SMEs and individual self-employed entrepreneurs for greater outreach, and expand at twice the rate possible. The anecdotal examples above demonstrate how a vision of Indonesia as a Tech utopia is more than a mere pipe dream.

There has never been a better time for tech startups in Indonesia. Everyone, and their taxi drivers, know what a tech startup is. Every university has an incubator, and every other day carries news of another tech startup getting funded. We can look forward to someday soon when a father will not kick out his daughter’s boyfriend when he says “I’m working for a startup”. If examples from China and India (and USA, and Europe, and the rest of the world, actually) are anything to go by, Indonesia’s journey is just beginning.

The Tech revolution has gathered full momentum in Indonesia. In the space of two short years, it has altered the ways which Indonesians do, think, talk, and make a living. Its impact on the public is particularly significant on the rapidly-growing middle class largely-based in major urban centers throughout the Indonesian Archipelago. Truly, this is the age of E-commerce, and we await with bated breath in anticipation of how FinTech will continue to drive positive change.