Same Day Delivery Gets Hyped, Logistics Competition Went Tight

The growth of the logistics market in Indonesia is predicted to get better in 2021. This has taken into account the current situation in Indonesia as the implementation of social restriction policies in some areas.

Indonesian Logistics Association’s (ALI) Chairman, Zaldy Ilham Masita revealed several predictions and trends in logistics to occur in Indonesia this year. First, he observed that logistics service players had started to adapt during the pandemic. This is visible as the emerging new services and collaboration between startups and large logistics companies, especially to accommodate the needs of instant courier services (on-demand).

“In the fourth quarter of 2020, logistics will get more popular due to increasing public spending. In the first quarter of 2021, it is a bit worrying as the implementation of social restrictions. However, we are optimistic because during the last six months, [logistics players] have been trained to adapt. We predict that the logistics peak [increase] will occur in the third and fourth quarters of 2021 as more people get vaccinated,” he said in recent contact with DailySocial.

According to Ken Research‘s report, Indonesia’s logistics market is estimated to reach $200.3 billion with a CAGR of 7.9% in 2024. This value includes goods transportation, freight forwarding, warehouse, express and parcel (CEP) and cold chain logistics businesses.

Second, he estimates that the increase in the logistics business this year will be boosted by the same day delivery service. With the current situation, he estimates that this trend can spur logistics industry players to evaluate whether the current duration of same day delivery times has met customer expectations and is business competitive.

Zaldy, who is also the President Director of Paxel, even admitted that he would consider the findings. Moreover, Paxel, which is a technology-based logistics delivery service platform startup, started a same-day delivery service with a duration of up to 10 hours.

Service	Ja(bo)detabek rate	Duration
GoSend	Rp,.815/km (0-6km), Rp 18,000 (6-15km), Rp1,200/km (>15km)	Up to 4hrs since the pick-up
Grab Express	Start from Rp15.000 (0-5km)	Up to 6hrs (motorcycle) since the pick-up
Paxel	Flat s/d 5kg Rp8.000 (dalam kota), Rp15.000 (luar kota)	6-8hrs (within city), 10-12hrs (inter-city)
MrSpeedy	Rp8.000 for the first 4km	Up to 90 menit

Source: Official website of Gojek, Grab, Paxel, MrSpeedy / Organized by DailySocial

“Currently, Same day delivery within the city is only 2 hours. Over the last few years, customer expectations have increased significantly. [Paxel] is even evaluating whether the same delivery with a duration of 8-10 hours can compete. In addition, there is something more extreme at a lower cost. It means that the industry needs more innovation,” he added.

Same day delivery trend is driven by food delivery

Referring to the report The 2nd Series Industry Roundtable: Logistics Industry Perspective released by MarkPlus Inc in October 2020, the frequency of courier services increased rapidly during the pandemic. This increase was triggered by a number of main factors, including online shopping activities, prices, and delivery times.

Sumber: MarkPlus Inc / Diolah kembali oleh DailySocial — Source: MarkPlus Inc / Organized by DailySocial

In addition, same day delivery services are expected to get rapidly increased after the pandemic (67.2%) compared to regular delivery services (78.7%) even it has a larger portion. The research was done with 122 respondents from the Greater Jakarta area (59.8%) and non-Jabodetabek (40.2%).

Then, respondents have a main expectation for the delivery of services on time (36.7%) and logistics service providers are considered to need to improve pick-up services in the future.

Third, in Zaldy’s observations, the B2B logistics market is getting decrease due to the shifting of shopping behavior from offline to online. The effort is getting stronger as the pandemic and increasing customer expectations are considered increasingly extreme. He estimates that the composition of the logistics business in the B2C segment will increase from 10% to 25% this year.

“Fourth, this year is also a proving ground to see which logistics business models are successful and which are not. New business models may emerge because many new markets are yet to open, such as food delivery services,” Zaldy explained.

Several giant startups, such as Gojek (GoFood), Bukalapak (BukaFood), and Shopee (ShopeeFood) are started to tighten its position in the market segment. The large logistics company SiCepat also acquired 51% shares in the DigiResto food delivery platform to boost revenue contribution from the food delivery market in Indonesia.

Quoting Momentum Works’ research, GMV food delivery services experienced accelerated growth during the pandemic. The report noted the GMV of food delivery services in six countries in Southeast Asia reached $11.9 billion in 2020.

In terms of the Indonesian market, the number has reached $3.7 billion or equivalent to Rp52 trillion, dominated by two big players, Grab and Gojek, with a share of 53% and 47% of the total market share, respectively.

Challenges for legacy logistics

Fifth, Zaldy continued, he said that older conventional logistics companies would find it difficult to catch up with future trends. This is because it is not easy for companies to transform or build infrastructure in a short time. The key is in collaboration.

At least, throughout 2020, there will be many collaborations between startups and corporations. For example, Ninja Xpress partners with Grab and Gojek partners with Paxel. The partnership was due to strengthening inter-city freight forwarding services (intercity).

According to Zaldy, the pandemic is an eye-opening experience, therefore, conventional logistics companies are willing to collaborate. “Many conventional legacy companies find it difficult to catch up with business as customer expectations getting higher now. We see some conventional companies, their service may be threatened by the same-day delivery,” Zaldy said.

In fact, he also saw an emerging new trend due to the pandemic, non-logistics companies entering the logistics sector. Blue Bird is one of which that executed this idea.

The company has made maneuvers in logistics since the second quarter of 2020, powered by the fleets. Blue Bird has started to expand its logistics services by partnering with Paxel for large package shipments with a same-day delivery service.

“We are using the existing fleet for cost-efficient. In essence, we want to contribute to logistics services during a pandemic, regarding hygiene in particular, we apply protocols according to our standards,” Blue Bird’s Chief Strategy Officer, Paul Soegianto said to DailySocial.

Zaldy also gave an example of how this will be a challenge to PT Pos Indonesia. He said the infrastructure is no longer possible to catch up with logistics service providers, SiCepat, for example.

“However, [models such as] PT Pos Indonesia can take advantage of infrastructure from other platforms, such as Anteraja. This means that the first and middle miles can collaborate with each other, while the competition is in the last mile,” he added.

Gojek and Tokopedia’s Merger to affect logistics industry

Sixth, he estimates that the plan of Gojek and Tokopedia’s merger can have a big impact on the Indonesian logistics industry. Also, he added, conventional logistics companies will be significantly affected.

“The merger of the two will struck the legacy companies. Why? It’s hard to get legacy companies to change their business models, especially those that already have thousands of courier fleets and hubs. Unless they have good IT systems or technology, this will be difficult. Blue Bird is an example of a legacy company with a ready system. The question is have they done the ‘homework’?” Zaldy said.

In a separate article, DailySocial Founder and CEO Rama Mamuaya said that the merger of the two can have a big impact on consumers and the industry. Rama said, cross-breeding of complementary products would be fantastic for consumers. Moreover, both of those have integrated e-commerce, transportation, and financial infrastructure in one application.

“Today, we have same-day delivery which works most of the time. The integration between Gojek and Tokopedia can produce something even better, Amazon Prime-style instant same-hour delivery, helping push e-commerce transaction and customer satisfaction even more while increasing driver utilization rate making it more economical as a business,” he explained.

–
Original article is in Indonesian, translated by Kristin Siagian

Traveloka Drops Strong Signal to Go Public on The New York Stock Exchange

Traveloka’s plan to go public on the stock exchange is getting obvious. In an interview with Bloomberg, Traveloka’s Co-Founder & CEO Ferry Unardi said, after going through his most difficult period at the beginning of the Covid-19 pandemic, this year is the right time for companies to go public. He believes that the company’s current state is great and the market is quite welcoming.

He said Traveloka’s business model has a clear profit path. Currently, its main business (travel and accommodation) is claimed to be profitable, while continuing to explore other business models, such as fintech. One of Traveloka’s focuses is providing paylater services.

He also implied that the company has been prepared to go public this year. Ferry has mentioned that Traveloka is to go public on the New York Stock Exchange (NYSE), then the local stock exchange.

The SPAC scheme may be an option due to its efficiency in terms of time. He emphasized that companies like Traveloka need an agile approach, therefore, they can focus on executing business growth post going public.

Previously, a Bloomberg source said Traveloka had chosen JPMorgan Chase & Co. as a strategic partner to explore potential IPOs on the NYSE. In addition, a Reuters source said, several blank check companies were in discussion to help with this process, including Provident Acquisition, COVA Acquisition, and Bridgetown Holdings.

SPAC is becoming a startups’ choice to go public on the NYSE. In a simple way, a blank check company that already goes public will conduct M&A on startups in need to go public on the stock exchange, therefore the startup is automatically listed on the exchange (direct listing). The process is faster, it can be within weeks as it doesn’t require a complex financial reporting process like the traditional IPO.

Traveloka is a leading regional OTA platform that is available in 6 Southeast Asian countries and Australia.

Is it the right momentum?

The pandemic had stopped the OTA business globally. Traveloka transaction volume was seriously affected. Ferry claims, the company started to climb back up in July 2020, and the transaction volume has getting recovered, reaching 50% pre-Covid-19, making their core business profitable.

Last year, Traveloka has secured new funding of $250 million or the equivalent of 3.6 trillion Rupiah. In order to raise the fund, Traveloka’s valuation is estimated to drop to $2.75 billion (nearly 40 trillion Rupiah). This down round action was taken because the company’s business was hit by Covid-19 and experienced a decrease in service traction.

There are some risk mitigation acts as the impact of Covid-19, one of which was performing business and operational efficiency. The company reportedly made a significant number of employee layoffs. Domestic travel is being optimized to maximize sales potential amid the relaxing massive social restrictions implemented in many regions.

It becomes an interesting question, after the business dropping and conditions are yet to fully recovered (especially in the travel industry), is this the right time for an IPO? What is clear is that Traveloka’s IPO plan has been revealed since before the pandemic. At the end of 2019, Ferry said that the startup is to perform an IPO in the next 2-3 years.

We had a chance to talk with Traveloka’s early investors, Willson Cuaca, Managing Partner of East Ventures and EV Growth, regarding the startup’s IPO process. He said that the pandemic will not affect the IPO plans. He said Indonesia’s startup current situation is quite ready.

“Whether there is a pandemic or not, the IPO is about time. For example, Tokopedia is 11 years old, Traveloka 8 years old, and others. Besides, monetization has getting visible, many have started to be profitable, the roadmap is getting clear, it’s only a matter of means. However, due to the pandemic, the government has issued more initiative. [..] It can accelerate the opportunity for IPO,” Willson explained.

Apart from East Ventures and EV Growth, Traveloka is also supported by some other investors, such as GIC, Expedia Group, and Rocket Internet. The company’s valuation is estimated at $3 billion and they want to go public on the stock exchange with a market capitalization of $4-6 billion.

–
Original article is in Indonesian, translated by Kristin Siagian
Header: Depositphotos.com

XWORK and New Business Opportunity Amidst Pandemic

The pandemic has directly affected the dynamics of the marketplace business to the platform for providing office space or coworking space. However, as a marketplace for providing space in Indonesia, XWORK claims to have experienced positive business growth.

XWORK’s Co-founder, William Budihardjo revealed to DailySocial that there was an increasing demand for certain needs during the pandemic, including content creation, casting, and video products, and live streaming.

“This change is powered by the acceleration of creative digitization during the pandemic. Our services are not reduced. We are getting focused on serving the increasing demand for this new need. We are also doing several promos for customers in the midst of a pandemic such as a 6 months free 6-month virtual office promo and others. Also, we’ve collaborated with ShopeePay to provide cashback.”

To date, XWORK has a total of 6 thousand rooms for rent, from 650 partners. XWORK has served more than 3 thousand B2B clients, consisting of companies (58%), MSMEs (15%), and early-stage startups (14.8%).

“XWORK is here to bridge the void that exists in the market. We see an opportunity to help venue providers in Indonesia to maximize their potential assets. In a way by providing an easy and practical online booking system for prospective tenants, as well as expanding space utility – for example, from which is usually a wedding venue, can now be a meeting venue as well,” William said.

Developing new feature and fundraising plan

Until now, XWORK is still focused on serving the Jabodetabek area only. In terms of service and client trust who have taken advantage of the XWORK platform, there are several leading technology companies. Among them are Grab, Tokopedia, and corporations such as Deloitte, Astra International, and Ericsson. This is what differentiates XWORK from other similar platforms.

“In addition, I come from a family that focuses on developing property for events, therefore my experience and understanding of the industry is quite well,” said William.

This year, XWORK plans to prepare several new features to provide needs besides room rental. Currently, William is reluctant to elaborate on the feature’s function. Meanwhile, when talking about the fundraising plan, William said that he is still in the process of raising funds.

“We want to invite all players with property assets to XWORK, from restaurants, sports fields, to business premises. This will complement our digital assets and offerings to make them more optimal. We will also strive to improve ordering, payment, and comparison capabilities, the venue, even scheduling a site survey, making it easier for all parties interested in renting a room,” William concluded.

–
Original article is in Indonesian, translated by Kristin Siagian

Discovering the Mission Behind Northstar Group and Google’s Joint Business Plan

In 2021, Northstar and Google have agreed to form a joint business plan. It’s to focus on accelerating the growth of the digital economy in Southeast Asia.

Northstar Group‘s Director, Henky Prihatna said to DailySocial that the two companies will share roles. As a private equity firm, Northstar will focus on investing and allocating resources to provide local market knowledge. While Google will help a lot on the technology part, it also teaches best practices from global case studies.

“The combination is necessary for entrepreneurs in Indonesia. A successful startup does not only need a good founder but also has to understand the ‘know-how’. At this point, we will share useful insights according to our experience and observations,” Henky said.

In the initial phase, Northstar and Google will first test it. Therefore, it’ll be focused on the existing portfolios. He also said that the big vision of this joint business plan is to deliver to a new unicorn in Southeast Asia for verticals outside the existing ones.

“The stage [startup] is actually flexible, but because it is still new, we want to pilot the project to startups that are already running [later stage]. Because this is also Google’s first collaboration with venture capital,” he added.

Apart from nurturing their existing businesses, they will also assist traditional companies to run digital transformation. As a general note, Northstar not only invests in technology companies but also embraces consumer and financial sectors.

“This collaboration is expected to generate new entrepreneurs. As we all know, Google has various accelerator programs and business education. We are also often involved in startup development programs. We are discussing joint programs that can later be implemented for this purpose,” Henky said.

In an official release, Google Indonesia’s Managing Director Randy Jusuf said, “At Google, we want to continue to support digital transformation through collaboration with stakeholders and encouraging the development of the startup community through the Google for Startups initiative. It is an honor for us to work with Northstar Group and support their investment in startups through platforms such as Google Ads and Google Cloud. ”

Northstar Group’s Chief Investment Officer Tan Choon Hong also gave his speech, “With the support of partners of the caliber of Google, we hope to help our portfolio to continue to adapt and maximize new opportunities in the future. This collaboration with Google is also part of our commitment to drive the Northstar portfolio’s growth. ”

Northstar alone since 2003 has managed about $2.2 billion in funds and is one of the largest investors in the region. In the Indonesian startup ecosystem, they invest in several startups such as Gojek, Zenius, and eFishery. They also have a Northstar Foundation unit that focuses on investing in social impact enterprises.

–
Original article is in Indonesian, translated by Kristin Siagian

Carro Starts Selling New Cars, Strengthen Collaboration with Tokopedia

The car trading platform Carro expands its collaboration with Tokopedia. Recently, the collaboration that was formed in 2020 has provided more than 50 payment options for purchasing certified used cars on Tokopedia.

In recent contact with DailySocial, Carro’s Co-founder, Aditya Lesmana said consumers can enjoy more flexible financing options at Tokopedia. Carro is working with a number of finance companies in Indonesia to facilitate the payment options, both cash and credit with various types of down payment (DP) tenors, and the desired insurance.

“Last year was a year full of challenges for us. However, the Covid-19 pandemic has actually triggered the automotive industry to innovate. We are taking strategic steps, one of which is with Tokopedia. This has had a positive impact where the demand for certified used cars has jumped up to 600%,” Aditya said.

In July 2020, Carro expanded access to certified used car purchases by opening Carro Automall through the Tokopedia platform. This collaboration allows more than 100 million active Tokopedia users to view and buy certified used cars on the platform.

For Aditya, the trend of contactless car purchases has increased 100% from month to month. As of September 2020, three out of ten cars were sold, through the contactless process. With the increasing trend of online car purchasing, Carro keeps the door open for collaboration with marketplace platforms in Indonesia.

“Sales of new used cars show a positive trend, especially in the midst of a pandemic. This change has an impact on the automotive sector in Indonesia in line with the increasing online demand for cars,” he said.

Apart from financing options, Carro also announced a new chapter by entering a new car market segment. This step was taken in line with optimism for Indonesia’s economic growth this year.

Quoting data from the Association of Indonesian Automotive Industries (GAIKINDO), Aditya said that domestic sales of new cars are predicted to reach 750 thousand units in 2021. This has taken into account Indonesia’s economic growth potential which is projected to grow by 3% -4%. GAIKINDO also believes that people’s purchasing power for new cars is to improve this year.

“We are optimistic that the automotive industry in Indonesia and Southeast Asia, both the used car and new car market sectors, will recover in 2021. Technological advances, collaboration, and adaptation made by various stakeholders in the automotive industry to develop online businesses will encourage car sales,” he explained.

He considered that the automotive industry continues to develop and transform over time. Transactions through digital platforms certainly make it easier for consumers to find out more detailed product information, prices, payment options, features, and complete car history.

Meanwhile, in a written statement, Tokopedia’s AVP of Business David Kartono said the partnership with Carro is an ongoing effort to encourage all opportunities for the Indonesian people. He expects this collaboration can help promote economic recovery in Indonesia through digital platforms.

Carro is a car buying and selling platform in the Southeast Asia region with transactions of more than $1 billion in 2019. The company offers the convenience of buying cars with online transactions and checking cars offline at Carro Automall located in Bekasi.

Carro claims the Automall is the largest certified used car showroom in Indonesia. In addition, it also offers contactless sales of used cars and trade in new cars from various brands on its platform. In order to improve the offline experience before consumers make transactions, Carro also provides a test drive facility that can be ordered through the Carro and Tokopedia platforms.

This startup was founded in 2015 and used the C2B and B2C business models where consumers can sell used cars through the Carro platform and offer them to consumers. In this vertical, Carro competes with a number of players, such as OLX Autos and Carsome.

–
Original article is in Indonesian, translated by Kristin Siagian

Introducing BaaS, a Modern Way to Enter the Digital World

Banking-as-a-service (BaaS) becomes a hot topic on how banks try to innovate into the digital world. Earlier this year, Standard Chartered Bank (Stanchart), through Nexus, pioneered this method through partnerships with Bukalapak and Sociolla. Nexus was developed by SC Ventures, a Stanchart investment company.

BaaS term is different from open banking or digital bank (neobank) which has commonly known. DailySocial interviewed some industry players regarding their respective differentiation.

Before BaaS, Indonesia had already been familiar with the concept of a financial product marketplace such as those implemented by CekAja and Cermati in its debut. The concept is similar to when accessing e-commerce pages, consumers can access various financial products from marketplace partners and make transactions.

“BaaS, open banking, and financial product marketplaces are different things, where BaaS can give providers the ability to build systems that will be owned by the provider itself, based on the infrastructure and expertise of the bank,” CekAja’s Director of Legal, Compliance, Governmental Relations and Human Capital, Marthina Natalyna said.

Meanwhile, Finantier’s Co-Founder and CEO, Diego Rojas said that BaaS is different from other API concepts because it provides a licensed and regulated infrastructure for core banking services. Out of the box, almost all companies can now become fintech companies without going through the long process, thanks to the existence of open finance companies such as Finantier.

Finantier is a startup that provides an open finance ecosystem to support collaboration between various types of companies in providing financial products specifically designed for their consumers.

“Innovators must focus on the customer experience and on their core digital products, while the basic complex infrastructure and regulatory side are fully covered by BaaS,” Rojas said.

Nexus Indonesia’s Country Head, Hermawan Tjakradiwiria shared his views. Quoting KPMG, open banking generally refers to the ability of banking customers to authorize third parties to access their bank account data to collect account information or to initiate payments.

Meanwhile, Investopedia stated that access is done through the use of an application programming interface (API). On the other hand, neobank, according to the interpretation of Fintech magazine, is physical banking that offers a completely digital experience, such as a savings account or debit/credit card service.

“Sometimes these new banks provide services under their own banking license, but they can also take advantage of the BaaS solution as a client to act as a new bank.”

He defines nexus as a BaaS which enables non-bank players to offer financial services to their customers by connecting directly to the bank system via an API. They can provide banking offerings on top of a bank regulated infrastructure. As a result, the platform can launch financial services in its ecosystem.

BaaS global trend

Sumber: Depositphotos.com — Source: Depositphotos.com

In 2018, regulators in European countries issued a Second Payment Services Directive (PSD2) which inspired the standardization of open banking in the United Kingdom to encourage synergies between banks and fintech instead of intensifying competition. The innovative era driven by API and the arrival of BaaS technology allows banks to invest sufficiently while providing better services for mobile-first consumers and remaining in the industry.

The BaaS initiative has been widely used in Europe, then expanded to other regions, such as the United States, Mexico, Brazil, Australia, Singapore, and Nigeria. In Germany, for instance, there is solarisBank that powers many neobanks in Europe. Then in the UK there are Bankable, Pi1, and Starling Bank, while in the United States they operate Green Dot and BBVA. The concept they offer is acquiring multiple partners to offer financial services.

solarisBank has collaborated with 70 companies and managed to acquire 400 thousand new users. One of the solutions offered, along with American Express, is the Splitpay feature to simplify the consumer check out process on an e-commerce platform in Germany with an installment option for several months.

solarisBank earns revenue from partners when they pay for the API services used to activate accounts and cards. The company also collects exchange fees for card transactions (interchange fees) and shares revenue with these partners. In addition, solarisBank can offer income sharing on credit interest with partners.

This condition, for Rojas, is a win-win solution for everyone because banks and financial institutions try to remain relevant to current conditions to reach new consumers. Financial services, which are at the forefront of the company’s business, can still be adapted to certain segments in the market.

“In order to increase their income by allowing other players to take advantage of their services. Bring more AUM (Asset Under Management) and keep the bank relevant,” Rojas said .

“Some of these neobanks focus on very specific markets, such as millennials, with sustainable-oriented business, or even target specific geographic or social groups,” he continued.

Indonesia’s groundwork

In Indonesia, regulations related to open API are currently being prepared by Bank Indonesia. There is no final word yet when the central bank will officially release it. The Open API standard is an embodiment of Vision 2 and Vision 3 of the 2025 Indonesian Payment System Blueprint (BPSPI) to support the implementation of open banking in the payment transaction area in order to encourage digital transformation by banking, as well as interlink between banks and fintech.

Even though there is no standardization yet, Rojas believes that the central bank is taking the right steps to read global trends, learn the kind of mistakes and shortcomings in its application, then adjust it to the practice and guidelines in Indonesia. “There are benefits if you don’t become the first player in this area because banks, businesses, and regulators can learn.”

Moreover, the journey of the fintech in Southeast Asia is quite broad to grow in line with global trends. Creating opportunities for innovators to help banks developing services according to consumer needs. The first players started in Europe and the US, then entered Southeast Asia, slowly starting many financial institutions to transform digital and take approaches through BaaS.

Sumber: Standart Chartered — Source: Standard Chartered

Tjakradiwiria expressed his gratitude for the support from regulators because Stanchart was able to bring Nexus and activate BaaS in Indonesia. He also ensured that Nexus would always comply with local regulations and be ready to implement them with partners.

“There is always room for growth and innovation in banking. We are confident that we are in a new era of finance, especially with the growing digital and mobile penetration in Indonesia.”

Today, there are many digital companies with a user base looking to expand their capabilities and revenue streams by targeting specific issues experienced by users. This is where the Nexus comes in. Providing technology, financial institution support, risk, and compliance expertise will help partners to grow further and increase brand stickiness.

“Nexus will provide partner’s users with access to financial services through a platform, which has become part of their daily lives, therefore, accessing banking services will be as easy and seamless as any other digital engagement in the partner’s ecosystem.”

He said, when consumers feel that financial services are easily accessible through the palms of their hands, that’s a form of victory. Banking digitization embedded in financial services plays a very important role in improving access to finance for the underbanked and unbanked population.

He believes that Nexus can bring Stanchart into a new segment that has never been utilized before. Previously, Stanchart was attached to the perception of commercial banks as affluent middle to upper-class customers.

Nexus targets strategic partnerships with major ecosystem players on social media, ride-hailing, beauty, and others to formulate financial products through co-creation. Eventually, the financial products produced are in line with what consumers need. Therefore, Nexus did not all of a sudden offer the existing banking solutions presented by Stanchart.

“We are iterating product development, conducting research and testing to customers on a regular basis. In order to evaluate product readiness, we consider whether this product satisfies the user’s needs and achieves our goal of increasing access to finance. We adapt it accordingly to solve our partners’ problems.”

Rojas expressed his optimism about the future of BaaS because it could spur innovation. The banking infrastructure will become a commodity, therefore, many innovators can embed financial services into their products, providing a better end-to-end experience for consumers.

The financial product formulated by Nexus with Bukalapak and Sociolla is worth waiting for. It is to be released this year. “We are committed to launching commercially with the first 2 partners we announced,” Hermawan concluded.

–
Original article is in Indonesian, translated by Kristin Siagian
Header: Depositphotos.com

Collaboration of Startup and Digital Bank to Ramp up Innovation and Financial Inclusion

There was a time when corporations saw startups as a challenge. However, as years passed by, this assumption is getting hazier when the two parties are now collaborating with each other, to complete each other out in winning the market.

In the banking sector, a new phenomenon has occurred, that large startups have started to invest and become majority shareholders in banks that have just transformed into digital banks. For example, Akulaku joined Bank Neo Commerce (BNC), then Gojek invested in Bank Jago, and Sea Group, Shopee’s holding company, which reportedly entered the Bank Kesejahteraan Ekonomi (BKE).

Currently, Akulaku, through PT Akulaku Silvrr Indonesia, is trying to extend ownership in BNC through the rights issue scheme. Therefore, Akulaku’s ownership is to increase from 24.98% to 27.25%. Akulaku has been a shareholder of BNC since 2019.

Moreover, in mid-December 2020, Gojek Group through its subsidiary GoPay (PT Dompet Anak Karya Bangsa) has invested into Bank Jago in the form of 22% equity at the end of 2020.

Meanwhile, there has not been any confirmation regarding the involvement of Sea Group in BKE. However, there is already strong evidence based on information from the recruitment website which says there is a new placement at “Sea Money-Bank BKE”.

Overseas, the dynamics of digital banks are escalated quickly. For instance, the Monetary Authority of Singapore (MAS) has issued digital bank operating licenses to four corporate groups. The four companies receiving these licenses are (1) Ant Group, a subsidiary of Alibaba Group, (2) the Grab-Singapore Telecommunication Limited (Singtel) consortium, (3) the parent Sea Group of Shopee, and (4) a consortium consisting of companies from China, including Greenland Financial Holdings.

Thus, what is the meaning of this synergy between startups and digital banks? How can the synergy between the two be mutually beneficial without breaking the existing rules? The banking sector is a highly regulated sector with high-risk management when it comes to product and service development.

Strong capital and innovation development

Although the terminology for digital banking and the supporting regulations is still unclear, the sign for digital banks has occurred when BTPN launched Jenius. This step was followed by DBS through Digibank. It’s just that Jenius and Digibank are not quite legitimate as digital banks as their business processes are still under the owner’s company.

Therefore, digital banks such as Bank Jago and BNC are experiencing a massive transformation by changing faces and new branding in order to strengthen their position as a digital bank. Bank Jago is a new identity (previously Bank Artos), while BNC was previously named Bank Yudha Bhakti (BYB).

Bank Jago changed the name in June 2020 following its acquisition by a group of investors led by Jerry Ng and Patrick Waluyo through PT Metamorfosis Indonesia (MEI) and Wealth Track Technology (WTT). Jerry Ng is the former President Director of BTPN for a decade and also the person behind the development of Jenius, while Patrick Waluyo is the Co-Founder of Northstar Group, one of the former BTPN owners.

Next, Akulaku became a shareholder in BNC for the first time in March 2019 with 8.9% ownership of the current controlling shareholder, PT Gozco Capital. This fintech platform continues to increase its share ownership to become the controlling shareholder.

In previous reports, Bank Yudha Bhakti’s President Director, Tjandra Gunawan emphasized that his team is transferring the entire work process and business model from a conventional bank to digital, including the existence of branch offices with limited numbers.

In developing internal human resources, BNC recruited many talents in the technology sector, assisted by the collaboration of two giant technology companies, namely Huawei and Sunline.

In recent contact with DailySocial, Gunawan highlighted that BNC is trying to come up with a different positioning through its collaboration with Akulaku. It will target the retail and MSME segments through a number of digital banking products.

“Akulaku as one of the shareholders in BNC is a fintech company that focuses on e-commerce, B2B financing, and other digital financings, therefore, BNC and Akulaku is to combine market segments in the future,” said Tjandra.

Meanwhile, it is still unclear why Sea Group entered through BKE. If it is true, it is possible that BKE will have the same fate as the two banks mentioned above, coming with a new identity. It seems difficult to move forward without a new identity for legacy companies looking to undertake a major transformation.

Product development and integration to the ecosystem

The involvement of Gojek, Akulaku, and Shopee (Sea Group) has the same common thread, namely efforts to integrate innovation into a digital service ecosystem for people who are yet to be exposed to banking services.

Banks are a business of trust, while digital platforms have the strength in technological innovation. In this case, banks can push financial services into a broader platform services ecosystem with a large customer base.

Gojek already has an A to Z service ecosystem. Likewise, Shopee, according to iPrice data, is the e-commerce with the largest monthly visitors in Indonesia in the first quarter of 2020. Meanwhile, Akulaku is targeting a comprehensive financial ecosystem, from marketplaces, P2P lending, to financing.

Quoting KrAsia, Akulaku’s CEO, William Li said that the potential of digital banking in Southeast Asia is enormous. “There are 400 million workers, but only 5% -10% are using digital banking services. That means, we have 300 million potential customers,” Li said. He thought, if Akulaku can work on around 5% -10% of the market share, the company could potentially reap greater achievements.

In terms of technology, Tjandra also said that his team would optimize technology development and digitization of the loan origination system and online financing related to granting approval and lending. In the future, this coordination and integration can become a pilot ecosystem that can be replicated to other marketplaces.

In addition, BNC will develop open banking in the payment system through the formulation of Open API Standards, therefore, the transaction and identification process will be more seamless. “This is a piloting project of the digital product on Akulaku platform as well as the use of the BNC Virtual Account to make it easier for customers to make payments,” Gunawan added.

Platform	Category	Service Ecosystem	User/Visitor
Gojek	Ride-hailing	Food Delivery & Shopping (GoFood, GoShop, GoMart, GoMall News and Entertainment (GoTix, GoPlay, GoGames) Payments (GoPay, GoInvestasi, GoPulsa) Transport & Logistics (GoCar, GoRide, GoSend, GoBox)	29,2 million (Nov 2019)
Shopee	E-commerce	Shopping (Shopee Mall, Shopee Mart) Payments (Shopee Pay, Shopee PayLate) Logistics (Dikelola Shopee)	71,5 million (Q1 2020)
Akulaku	Fintech	Marketplace P2P Lending Multifinance	6 million (2020)

Meanwhile, Gojek’s Chief Corporate Affairs, Nila Marita revealed that Gojek and Bank Jago are currently preparing a synergy for digital banking services. This is in line with the company’s efforts to increase financial inclusion at all levels of society.

Based on reports from Google, Temasek, and Bain & Company, as many as 52% or around 95 million adults in Indonesia do not have bank accounts and more than 47 million adults do not have adequate access to credit, investment, and insurance. On the other hand, smartphone penetration in Indonesia has reached up to 70% -80%. This indicates that the Indonesian people are ready to accept digital banking services.

“The number is quite large of people who do not have a bank account in Indonesia. Therefore, Gojek and Bank Jago will provide digital banking services on the Gojek platform to facilitate access to financial services,” she told DailySocial.

Referring to this, collaboration between startups and digital banks can encourage penetration of financial inclusion. One use case is that the digital platform can be a front-end channel for opening an online account. This is what Gojek and Bank Jago are currently preparing as their initial synergy plan. A number of banks in Indonesia have implemented a similar concept, such as opening a BRI online account on the Grab platform.

By utilizing the platform as an entry point, the public can be exposed to the integrated platform service ecosystem. Bank Jago can take advantage of the Gojek service ecosystem to increase its service penetration, as well as BNC-Akulaku and Sea Group-BKE. This means that the government’s efforts to encourage financial inclusion at all levels of society can be realized more quickly.

The next step is technology transfer. This is an expensive price to pay to leverage the technological innovations that have been built by Gojek, Shopee, and Akulaku. It will be free to develop innovations than to work together without investment commitments.

However, considering the current regulations have not accommodated digital banks, financial innovation players are still waiting and wondering about the limitations and potentials for future business development.

–
Original article is in Indonesian, translated by Kristin Siagian

Fintech Startup GajiGesa Provides Early Access to Salary for Employees

The thing is, the monthly payroll system in Indonesia held an issue for most workers. According to BPS data, Indonesia has at least 129 million workers, many of whom face financial pressures and difficulties caused by irregular cash flow, monthly payment schedules, unexpected expenses, and limited financial access.

The World Bank FINDEX estimates that 70% of Indonesians borrow money from informal institutions, often with high-interest rates and super-tense collection systems. GajiGesa intends to solve this issue, which was initiated at the end of 2020 by Martyna Malinowska (previously Standard Chartered Bank’s Product Lead and LenddoEFL’s Product Director ) and Vidit Agrawal (formerly APAC Strap’s Head of Business Development, CARRO’s COO , and Uber’s first employee in Asia).

In an interview with DailySocial, Agrawal explained that the idea was first initiated by Martyna, she had to work extensively with blue-collar employees at LenddoEFL, most of whom were unbanked since 2016. Martyna saw firsthand that the challenges to factory workers in gaining financial access were very limited, especially when getting additional capital.

If possible, they choose to take short tenors because of liquidity problems. However, this is contrary to the principle of loans in financial institutions in general, they are required to take long-term loans with higher nominal loans or short-term loans with high-interest rates.

At the same time, Agrawal was working in Southeast Asia for Uber. The average driver earns $250 per month, excluding Singapore. The main issue also concerns harassment by lenders. “Observing the many challenges faced by blue-collar workers to complete short-term access to capital that is fair and reliable is an inspiration for GajiGesa,” Agrawal explained.

GajiGesa provides services for employers and employees in speed up cash flow with financial products, including flexible salary access or what is known as Flexible Earned Wage Access (FEWA), financial education, bill payments, real-time analysis, and more.

For employees, GajiGesa provides real-time access to early salaries for employees for the current month, which can be used to pay bills, buy credit and data packages, and access financial education.

Meanwhile, for employers, the GajiGesa analysis platform provides the HR team to measure the effectiveness of financial health strategies, get real-time visibility into engagement, maintain retention and productivity, and employee financial health.

Employers have the flexibility and control to offer FEWA to all employees, able to decide whether they want to take this service to employees for an additional fee or as part of a benefits package.

Agrawal emphasized that the GajiGesa concept is different from cash loans like those run by most lending companies in Indonesia. The company actually collaborates with various multi-industry companies, integrating with corporate partners HRIS and payroll systems, ensuring efficient and fast integration.

Regarding license, he said that the company currently has a good relationship with OJK and is eager to continue working with regulators to ensure that the technology can benefit as many Indonesians as possible.

Currently, the company has partnered with 30 companies with tens of thousands of employees served in Indonesia.

Seed funding

GajiGesa announced seed funding of $2.5 million led by defy.vc and Quest Ventures. GK Plug and Play, Next Billion Ventures, Alto Partners, Multifamily Office, Kanmo Group, and several strategic angel investors participated in the round.

In an official statement, devy.vc’s Partner Bob Rosin said, “Lack of safe and reliable access to consumer credit is a critical problem in emerging markets. The majority of Indonesia’s 129 million workers are in the unbanked category. It is an honor to work with GajiGesa to support their mission of helping millions of hard workers achieve prosperity and financial security at work.”

Quest Ventures partner, Yiping Goh added, “GajiGesa helps middle to lower-income workers who live from paycheck to paycheck, deal with often stressful cash flow problems by providing the financial stability that employers and their employees urgently need, during times of the current economic uncertainty.

With this fresh fund, Agrawal will use it to expand its range of services, including investment in sales and customer success, and expand its technology team in Jakarta. “GajiGesa wants to add more wellness features for employees to provide a better experience when using the platform,” he concluded.

Global trend

A study conducted by Gartner predicted there will be 20% of US companies with the majority of hourly-paid workers by 2023, implementing flexible salary access solutions as part of efforts to improve worker experience, engagement, and retention.

Various companies have responded to this initiative through partnerships with fintech. Among other things, Square launched salary on-demand products, Visa and PayPal in collaboration with flexible payroll access providers, and Wagestream which also took advantage of this opportunity in Europe.

A study conducted by GajiGesa showed that more than 85% of workers admitted the ease of financial stress after getting access to flexible wages whenever they needed it. Then, the most common reasons for workers to access immediate salaries, including for investment purposes, paying debts, home renovations, vehicle repairs, and medical expenses.

Unfortunately, not all companies can provide this because it is thought to threaten the sustainability of the company’s cash flow. With the same spirit, KoinWorks has also explore this solution, through KoinGaji.

In terms of stage, KoinWorks, which is now a Super Financial App, has been registered as an IKD organizer in the Aggregator cluster at OJK. For the p2p lending product alone, we already have a license.

–
Original article is in Indonesian, translated by Kristin Siagian

Grab Partners with Yummy Corp to Expand Cloud Kitchen Coverage

Grab announced a partnership with Yummy Corp to expand the business scope of culinary entrepreneurs in Indonesia. As combined, the two companies now operate more than 80 cloud kitchens throughout Indonesia.

In a virtual press conference today (8/2), Grab Indonesia’s Country Managing Director Neneng Goenadi emphasized that Grab doesn’t provide any investment for Yummy Corp in this collaboration. It’s only in the form of an MoU from the two companies to support culinary in Indonesia.

“The collaboration with Yummy Corp is based on a shared vision to offer new concepts in the culinary industry as a form of Grab’s support for this industry in Indonesia,” she explained.

In a separate official statement, Yummy Corp’s Co-Founder & CEO, Mario Suntanu said, “Our mission is to support culinary entrepreneurs to grow in the new digital era by providing managed expansion solutions through cloud kitchens. We are very pleased to be working with them. Grab to take the mission of the two companies to the next level, where the speed of expansion, quality of food, and customer satisfaction will always be our main focus.”

The next implementation of the collaboration is that Yummy Corp will provide operational management including recruiting more staff at GrabKitchen, Yummy Corp merchants are incorporated into the GrabFood platform and access the features in it, so they can receive maximum benefits.

Eventually, encouraging innovation in the culinary industry through collaborations with brands and chefs. Grab and Yummy Corp plan to work with culinary entrepreneurs to create new concepts, test them on the GrabFood platform, and develop them in the cloud kitchen networks of Grab and Yummy Corp.

Country Managing Director Grab Indonesia Neneng Goenadi dan Head of Marketing GrabFood Hadi Surya Koe / Grab — Grab Indonesia’s Country Managing Director Neneng Goenadi and GrabFood’s Head of Marketing Hadi, Surya Koe / Grab

The concept of cloud kitchens alone is currently very popular among food delivery service providers. Gojek as Grab’s main competitor in Indonesia also performs the same approach. Through its investment in a cloud kitchen startup from India, Rebel Foods, Gojek brought the service to Indonesia through PT Rebel GoFood Indonesia (GoFood Kitchen).

Research of Momentum Works said that in Indonesia GMV food delivery services had reached 52 trillion Rupiah in 2020. The result is dominated by Grab and Gojek dominated, respectively holding 53% and 47% of the total market share.

The biggest business contributor

Neneng also said that the GrabFood business supports 50% of the entire Grab business. There was no further detail on how the contribution from Indonesia, or others. “We are proud to say that Grab is a super app company because 50% of our business, be it transactions, revenue, and so on, is contributed by GrabFood.”

Grab changed its strategy to no longer rely on the transportation business, especially in the midst of an ongoing pandemic. Since last year the company has invested heavily in food delivery services, including delivering daily necessities with GrabMart and GrabAsisstant.

Without clearly stated the numbers, it is said that the growth of active merchant partners at GrabFood on the platform over the past year has increased significantly. GrabMart merchants also continue to grow, starting from supermarkets, convenience stores, pharmacies, and startups such as Sayurbox, TaniHub, and WarungPintar. Thanks to this partnership, GrabMart has reached 19 cities.

In addition, it provides GrabMart Daily to meet daily needs thanks to the collaboration with a number of FMCG brands. This service is only available in nine locations in the Jakarta area, for example, Duren Sawit, Kemayoran, Lebak Bulus, Setiabudi, Daan Mogot, Tendean, and Kebayoran Lama.

As for GrabKitchen locations, it has spread across 46 locations in seven cities, including Jakarta, Bandung, Surabaya, Medan, and Makassar. There are more than 200 brands that are members of this cloud network.

Aside from focusing on increasing merchant partners, but the company also developed a number of features to make it easier for consumers. Among them are Take Yourself, Scheduled Order, Order With Friends, Multi Order, Order Again.

Next, Pesan Sekaligus from various merchants located in one building/street; Promosi Terbaik to filter the list of merchants participating in a particular promotion; expand the non-cash payment options for GrabFood; tips before the transaction is complete.

–
Original article is in Indonesian, translated by Kristin Siagian

Application Information Will Show Up Here

SuperHelper Arrives as an On Demand Application for Various Services

The potential of on-demand services remains interesting to be explored. From the consumer side, this application helps to speed up and facilitate the process of ordering service transactions quickly. Starting from a personal experience with difficulty in getting information and service assistance, Mel BJ then launched an on-demand service called SuperHelper.

“After experiencing some of these moments, I did market trials about this demand and got responses from thousands of people regarding similar problems. That’s when I was sure and started forming SuperHelper, which could be a platform for this kind of demand and other demands,” Mel said.

Even though it is recently launched and only available in Jakarta, it is said to experience quite good business development, especially during the pandemic. SuperHelper has launched the app and hired teams to help grow the business. The current number of partners (Helper) is nearly 1000 people, which they managed to recruit within a few weeks.

In Indonesia alone, there are lots of on-demand platform model that provides similar services. In Jakarta, there is JD Life from JD.id with options for various needs. In addition, there are other applications such as Help Indonesia. Outside Jabodetabek, there are also regional startups trying to develop similar services to reach the local market, such as TukangBersih in Bali.

Monetizing strategy

Currently, SuperHelper’s monetization strategy is through commission fees for each transaction. Partners will get 80% of the total bids received by users (Posters) on the assignment. While 20% is for SuperHelper. Previously, SuperHelper held all transactions from users to be given to partners when the transaction completed.

“At this time, Poster can pay via the application using GoPay and bank transfer virtual accounts. In the future, Poster will be able to pay using other favorite payment methods such as OVO, DANA, and others,” Mel added.

Regarding subscription options, SuperHelper plans to apply a subscription/membership model for Helper who demands many additional benefits. For instance, more exposure on the application and media, a special badge that makes the Helper profile more reliable, direct purchase of services (without bargaining), and others.

“The bottom line is, we will help member-type Helper to get more jobs in the future and to have a higher income,” said Mel.

This membership is optional, Helper can still have an account and proceed with offers as usual without paying anything (except commission fees), without any additional benefits when you join as a member. In order to access SuperHelper services, users can download the app on the Play Store. There are various options, starting from the driver, cleaning staff, letter management, repair, delivery to design and photography.

Regarding the differentiation from other similar services, SuperHelper is said to be the first mobile application in Indonesia that makes it easy to ask for any help without being limited by categories that sometimes limited to unique and unusual needs.

The partner selection system is also claimed to be very strict, thus increasing the number of quality and trusted partners. In addition, SuperHelper also provides a feature for users to determine how much they can afford for any assistance they need.

“Every partner in SuperHelper has the ability to offer prices that match their expertise. Every partner in SuperHelper also doesn’t have to spend any upfront money to get assignments from Poster (SuperHelper customers),” Mel said.

Business plan in 2021

The shutdown of Go-Life has not discouraged SuperHelper to targeting services that are quite difficult to be scalable until now. The usual size for regional expansion and the low commitment from partners makes it difficult for on-demand services to produce dominating players in this sector.

“Regarding the recent shutdown of a big brand, this does not mean that the existing industry is not promising. We have to see the positive side, in times of a pandemic, many businesses are prioritizing the most profitable business models. Therefore, they may have to cut back. secondary business model,” Mel said.

SuperHelper has several targets to achieve this year, including to launch the application on the App Store, extending coverage outside Jakarta, expanding the business model, and added new features such as Helper Membership and others that will make it easier for Helper to get offers.

“We will also continue to develop new features that will make it easier for Posters to get helpers in a much faster and cheaper way. Currently, we are not actively looking for investment because our focus is still developing business models, user experience, and user base. The fundraising plan will be revised in the middle or end of 2021,” Mel said.

–
Original article is in Indonesian, translated by Kristin Siagian

Application Information Will Show Up Here