Welcoming the Digital Bank in Indonesia

Banking, the oldest financial industry in the world, is now demanded to transform towards digital, both in service to consumers and in its operations. While on the external side they are also required to work closely with fintech startups so as not to be increasingly eroded by technological trends.

Many recognize, by utilizing digital technology can provide efficiency, because it does not merely rely on the quantity of physical and non-physical assets. So most of the solutions offered are disruptive, disrupting old habits.

Banks cannot rely on cooperation with third parties forever so that business does not erode. They are demanded to be more efficient by fully adopting digital, finally a newer banking model is known as digital bank (or virtual bank).

According to IBM, digital banks are different from other forms of digital banking because they are only online, do not have branch offices in a country. Consumer expectations from here are savings on bank facilities and staff which ultimately translates into higher interest rates for savings and lower interest rates for loans.

The most noticed difference is the emotional connection when visiting the branch office to interact, rent a safe, ask for bankers’ advice and so on.

Digital bank in Indonesia: Awaiting for legal umbrella

Indonesia is yet to have a legal umbrella related to the digital bank. The discourse has been spoken yet the formal framework is yet to be drafted. Currently, the most active digital banks are still under the name of conventional banks, such as BTPN Jenius (2016) and DBS Digibank (2017).

Legal regulation regarding digital bank is accommodated by POJK Number 12 of 2018. As stated, the definition of digital banking services is a service developed by optimizing the utilization of customer data in order to serve customers faster, easier and in accordance with demands; and to be run independently by the customer, by taking into account the security aspects.

OJK also mentioned that providers are limited to banks that were at least categorized as commercial banks (BUKU) II or core capital ownership between IDR1 trillion to IDR5 trillion. Regulations regarding virtual banks or banks without physical presence have not been accommodated in the POJK.

The limitation aims for the regulator wants to ensure that all fundamentals carried out are in the guidelines of banking regulations. Entering the BUKU II category can influence the scope of business activities of the bank itself, the most influential is that they can start the payment system and e-banking activities without having to be limited if they are still in BUKU I category.

In terms of the services provided, either Jenius or Digibank have not really targeted the unbanked. The map of its distribution is strategically not directly mass but slowly entering big cities. For example, Jenius by the end of 2019, opened booths in Malang, Medan, Makassar, Palembang, Yogyakarta, Bali, and of course Jakarta in its pilot project.

However, this is no longer an issue because Jenius is now facilitated with video call KYC, therefore, one can create an account without having to visit the booth. It’s an innovative feature, but it does not enough.

There must be an impact on unbanked society. It’s different from the current situation, fintech lending or payment expansion intends to make fast customer acquisition because there’s business “pie” where the banking industry has yet to cover.

Although the legal umbrella is yet to be drafted, based on the issued regulation, the digital bank map is getting crowded. Marked by the entrance of conglomerates, big-name investors, and startups are acquiring small banks since last year.

Salim Group took Bank Ina Perdana, Jerry Ng (senior banker) and Patrick Walujo (Northstar Group) towards Artos Bank, BCA to Bank Royal and Rabobank (to be merged into one of BCA’s subsidiaries), Akulaku to Bank Yudha Bhakti.

All actions above are yet to come to its peak, except Akulaku and Bank Yudha Bhakti. However, the preparations have begun. BCA, for example, has targeted Bank Royal to start a pilot project in the second half of this year and is ready to add Rp3 trillion capital to boost up its movements.

Meanwhile, Bank Artos has been occupied by BTPN’s former employees, effective as per November 15, 2019. They are Jerry Ng (President Commissioner), Anika Faisal (Board of Commissioners), Kharim Indra Gupta Siregar (President Director), Arief Harris Tandjung (Deputy Directors Main) and Peterjan van Nieuwenhuizen (Directors). This succession marks great hope to repeat the success of Jenius under the same leadership.

The close relationship between Patrick Walujo and Gojek has started a rumor of Bank Artos to become GoBank (Gojek’s banking). He said the rumor was not true. In a panel discussion forum, he mentioned there was a discussion to make use of the Gojek ecosystem with the employment of Bank Artos with expertise in banking.

However, it turned out the concept of Bank Artos did not exclusively involved as Gojek bank. Although, banks are specifically directed to become digital banks. “Because we see a demand that market alone cannot fulfill, in terms of the digital bank,” Patrick said while being a speaker at a conference in late January 2020.

Before investing in Bank Artos, Patrick had previously invested in BTPN in 2008, through TPG Nusantara, a joint venture with Trans Pacific Group. He bought 71% of BTPN’s shares for $195 million (around Rp1.8 trillion then). The shares were released gradually until 2015, they secured Rp5.3 trillion by releasing 17.5% shares.

“I invite Jerry Ng to join and work on BTPN’s business. The bank entered the mass market, those small traders in traditional markets whose markets are large and well-developed, until the state-owned banks entered,” Patrick added.

When Bank Royal, Bank Artos, and Bank Yudha Bhakti have started, they’re expected to offer more variant products and facilitate the unbanked population.

According to the latest report of e-Conomy SEA 2019 by Google, Temasek and Bain & Company, there is 51% Indonesian population in the unbanked class, 26% underbanked, and 23% banked.

“There are lots of business players in need of funding, yet have difficulty in getting a loan from the bank due to collateral issues. The demand is quite potential for digital bank services,” Walujo said.

Hong Kong might be the best example, with eight digital banks actively run since the license has been issued in 2019. ZA Bank offers interest for a time deposit at a maximum of 6.8% for three months tenor for savings of 100 thousand Hong Kong dollar (around Rp176 million).

Unlike conventional banks, such as HSBC and Standard Chartered, which offers 2%-3% interest for high amount savings.

Managing Director VC Asset Management, Louis Tse Ming-Kwong said this is an effort of new players to increase brand awareness and acquire the customer base.

“the interest war is not limited to virtual banks, but encouraged conventional banks to respond in order to maintain market share,” he said.

Different cities, different growth

Regarding virtual banks, Indonesia is yet to create a legal umbrella. The requirement to create a digital bank can only available with a banking license. It’s unlike the two neighbor countries, Singapore and Malaysia.

Singapore issued five licenses for non-banking digital banks, two of those with full license and three for wholesale bank licenses. The announcement will be made in June 2020 and the five selected companies are expected to start their business immediately in mid-2021.

Requirements given by the Central Bank of Singapore are also different for each license. For a full license must meet the capital of 1.5 billion Singapore dollars and must be controlled by local people. They are allowed to provide a variety of financial services as well as to save savings from retail customers.

Meanwhile, wholesale banks allow those who want to serve SMEs and other non-retail segments. With minimum capital of 100 million Singapore dollars. Submissions are open to local and foreign companies.

There are 21 candidates competing for the license, both in the form of consortium and individuals. The interesting part, most of the submissions came from technology companies from China because the Central Bank of Singapore has opened this opportunity for non-banking.

The entrance of new players in the Merlion Country is not highlighting on the “new kid”, it’s rather the kind of service to offer. As the Professor of Information Systems at Nanyang Business School Boh Wai Fong said, new players are expected to be able to serve low-income people or new companies that cannot meet traditional bank credit requirements.

There are 38% of adults in Singapore who are underbanked, even though the country has been mature in terms of the financial industry, according to the 2019 e-Conomy report compiled by Google, Temasek, and Bain & Company.

In a helicopter view, the high interest of foreign technology players in Singapore indicates further penetration to the Southeast Asian market. Although this license will only be valid in Singapore, the business model is considered very feasible to be replicated in the region.

As important, Singapore does not have a digital bank at all. The country has been dominated by large banks such as DBS, UOB, and OCBC. The three, according to Boh, are already “too good for too long” and monopolize the market.

Malaysia also conducted the same contest by issuing five digital bank licenses. Submission is open to non-banks, bank is capable whether they want to separate the digital banks through joint ventures.

The neighbor country issued a draft exposure on the License Framework for Digital Banks as a way to promote the development of digital banks in line with directions taken by regulators in Singapore and Hong Kong. Both have issued similar work license frameworks in the past two years.

The Central Bank of Malaysia said the draft will be finalized in the first half of this year. At the same time, the application for a new license can be made for interested candidates.

Meanwhile, the Philippines has granted four digital bank licenses to CIMB Bank and ING Bank, Tonik and Rizal Commercial Banking Corporation (RCBC). Except for RCBC, digital banks are run by regional banks. Thailand has already formed a digital bank named Timo which was established in 2016.

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Original article is in Indonesian, translated by Kristin Siagian

JD.id Confirmed as the New Unicorn

The e-commerce platform JD.id confirmed to DailySocial that the company’s valuation has exceeded US$ 1 billion. Therefore, JD.id has added to the list as Indonesia’s 6th unicorn. Involved in this “elite” list are Gojek, Tokopedia, Traveloka, Bukalapak, and Ovo. Three startups listed are leading the e-commerce business vertical.

JD.id avoids elaborating further on the total funds obtained and the current valuation. They also did not confirm the rumor that Gojek has poured an investment to the company, which was widely rumored last year. According to our source, there are some parties involved in the latest funding.

Earlier last year, Gojek announced a joint venture with JD.id.

The e-commerce site, with the jargon “selling goods with authentic guarantees”, came to Indonesia as a result of strategic cooperation between Chinese e-commerce giant JD.com and private equity Provident Capital. Provident itself is a Gojek investor and together with JD.com also built a JD joint venture in Thailand.

According to the SEA e-Conomy report, the e-commerce market share in Indonesia has reached US$ 21 billion in 2019 and is projected to grow rapidly to US$ 82 billion in 2025. It’s no surprise the e-commerce giants continue to strengthen the business strategy.

The competitive landscape in the business vertical is very tight because JD.id is dealing with other unicorns such as Shopee, Tokopedia, Bukalapak, and Lazada.

In 2019, Tokopedia has reached Gross Merchandise Value (GMV) at 222 trillion Rupiah. While in the first half of 2019, Bukalapak announced GMV reaching 70 trillion Rupiah, while for the same period Shopee reached 20.1 trillion Rupiah GMV.

Meanwhile, observed from the statistic of the platform’s visit in the Q3 2019, iPrice research showed the following result.

Indonesia's business competitive map of e-commerce based on platform's traffic / iPrice — Indonesia’s business competitive map of e-commerce based on platform’s traffic / iPrice

There are lots of approaches used by e-commerce players to win the market. With platforms like Bukalapak and Tokopedia intensified partnerships, JD.id always stated on several occasions its focus to strengthen logistics, particularly the same-day delivery feature.

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Original article is in Indonesian, translated by Kristin Siagian

Application Information Will Show Up Here

User Loyalty Program: Between Loyalty and Temptation

When opening the GoPoints feature in Gojek’s app, You’ll no longer find spinner gamification with points that used to be popular. All transactions on Gojek platform will no longer gain points since last January. The remaining points can still be redeemed until 30 June 2020. Gojek is said to develop GoPoints with a different approach.

GoPoints, similar to Ovo Points, TokoPoints, or Shopee Coins. These programs were originally designed to maintain user loyalty, but in the long run, creates comparison variables that influence purchase decisions rather than price.

I tried to talk with several users of digital applications, millennials, and actually care for these points. Some are looking for more benefits such as discounts, some tend to love these points to be used for other things – balance top-up for example.

July Andrian uses and benefits from some loyalty program, such as GoPoint, GrabRewards, Ovo Points, TokoPoint, Shopee Coins, Ponta, and I-Pocket. Everything is collected in order to get other benefits.

“[User loyalty program] This is an advantage for me. Getting some feedback on our loyalty / the amount of money we spend. Therefore, we believe to gain more profit from the purchases we make,” Juli explained.

This opinion is also admitted by others. Including the existence of various points obtained, they become more selective of an item/merchant/service.

“Always, because [I am] very frugal and avoid many losses,” Galuh Intan added.

“[I am] very considering. Whenever I want to buy something, I’ll check which offers the biggest cashback,” Prilita Kamalia said.

Loyal to the points, cashback, and discounts

Indonesians are mostly price-sensitive people. The program should be an answer to loyalty, but vice versa. Most of the users now expecting “bonus” from every transaction they’ve made. Eventually, the brand constantly offers something to gain users.

This is not a very good deal for the sustainability of service/brand/trader. For those which offer no extra benefits for certain users. The benefits become an addictive habit that cannot be avoided to gain users. Being mistaken to implement a loyalty program.

GetPlus, a loyalty service provider program, agreed on this phenomenon. Everyone likes discounts/cashback/rewards/points. However, they still believe people who devoted or loyal to certain brands and traders are exist.

“Consumers [who like certain brands] value recognition, to get loyalty rewards from their purchases and enjoy the shopping experience through the offline store. This is the value proposition of the loyalty program, which is a well-designed program that will be as attractive as a discount offer,” GetPlus’ Co-Founder & COO, Adrian Hoon told DailySocial.

Andrian also explained that Indonesia currently has many loyalty programs by brands or merchants, however, some are not well designed in terms of technology, process, resources, marketing, and other investments. The management is not good enough, followed by poor user experience with a negative impact on the business.

Meanwhile, Co-founder & CEO Member.id Marianne Rumantir said, getting loyal customers is not only from the user loyalty program but through the company’s products and services.

She explained, there are such things as transactional loyalty and emotional loyalty. Transactional loyalty usually exists when a brand provides discounts or offer cheap prices, whereas emotional loyalty is a condition where customers remain loyal to a certain brand even though the price is increasing. It is because customers have trusted the brand, in terms of products and services.

“In terms of discount and cashback programs, this should be considered as an acquisition program, not for a retention program. Regular discounts and cashback usually [and should be] offered to get as many members/users as possible at first attempt, but there is a next customer journey where the loyalty program should be able to provide other benefits to reward its customers beyond discount/cashback. Here [we] offer the loyalty program as a retention program,” Marianne explained.

How should the loyalty program works

The user loyalty program is a long-term investment program that is related to good relationships between services or brands with users. In the system, besides being able to grow users, this program can be used to capture feedback, view demographics, and track user habits. This program should play an important role in the journey of business growth.

Marianne stated several challenges related to the loyalty programs in Indonesia. Two of them are less comprehensive program socialization and some user loyalty programs without a clear customer journey.

“The best loyalty program is the one with well-designed customer journey. If I were to describe, there are 4 phases, Aspiration, Earnings, Benefits, Rewards. Each phase has elements that must be designed and executed well depending on the brand of each industry,” Marianne said.

The point is, Marianne said, in order for user loyalty program to work well, it must be followed by the on-demand products, competitive price to the market, and well-developed service.

“Loyalty programs should run to complement products and improve existing services, therefore, they can provide consumer appreciation as well as helping brands to understand consumers thoroughly,” Marriane added.

Redefining loyalty program

The most noticeable impact of the user’s selective habits on prices and points occurs in the SME business. At first, they intend to provide appreciation and experience for loyal customers but changed the habits of users instead. They become addicted.

Redefining user loyalty programs must be done to prevent misinterpretation. Marriane and Andrian said the key is in the well-designed loyalty program. Not only providing points and cashback, but also a clear system.

A well-designed loyalty program, as for Marriane, is user loyalty programs designed in stages and have their respective phases. Marriane calls it a customer journey or simply a user loyalty initiative built with full consideration of the whole experience.

Each stage is adjusted with its own role in the user relation. It manages time for points, cashback, and other forms of appreciation. The gamification model can also be an alternative, for example for customers who already have certain points.

Adrian took one good example of user loyalty programs in Indonesia. He explained a well-known restaurant group in Indonesia with a well-designed user loyalty program.

“The program they run is designed in such ways as to recognize consumers after making a reservation, reward points earned after making transactions without having to show membership ID, rewards offered based on transaction history, and other restaurant preferences. In addition, there are also occasional rewards. Well, such programs have an influence on brand preference, retention, meanwhile to increase spending driven by extraordinary experience to achieve challenges, bonus rewards, and others,” Adrian said.

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Original article is in Indonesian, translated by Kristin Siagian

Jogja’s Sate Ratu Uses Online Channels to Acquire Tourists

Was established in 2015, the name “Sate Ratu” is now associated with other ‘legend’ culinary destinations in Yogyakarta, targeting foreign tourists. It’s not an instant growth; with various perfectly-mixed satay seasonings, the business strategy is also well planned. We’ve come to the conclusion after talking with the culinary business owner, Fabian Budi Seputro.

He told DailySocial that he first started the business by optimizing online channels for promotion. Social media such as Instagram, Facebook, Twitter until recently launched a website; managed to introduce its products to potential buyers. In addition, a good relationship with consumers also helps Sate Ratu to get more impressions on the internet.

Online presence

Online presence (online presence) is a must for business, as Seputro said. It’s not without reason, quite basic, because society trends are shifting. Search engines and social media have become a space where people ask questions. We might do so when planning a vacation to a city, the first thing is to googling about unique places, delicious culinary, and other things in there.

The digital strategy is not only about displaying product photos or videos online. There is a direct interaction with customers, in order to encourage them to make a review of their visit.

“When tourists come to Sate Ratu, I usually talk to them, sometimes they also document their presence and said their impressions of our cuisine. I sometimes ask them to give testimonials, through TripAdvisor,” Seputro explained.

TripAdvisor is a travel directory site that covers global markets, becoming a reference for tourists from home and abroad in search of information about recommended objects by users.

“Our location may not be so near to a crowd of foreign tourists like the Prawirotaman area in Yogyakarta, however, we are located on the main road where tourists will pass when going to the most popular attractions. Therefore, our detailed information is quite important on the internet – there is a chance for our place to be visited,” he added.

Require research and data

Sate Ratu have no specific social media or digital marketing team, the existing accounts are simply managed by Budi. He also admitted to investing several times in promotions through Google Ads, though not in a large sum.

“I use Google Ads sometimes, usually for a specific target of international tourists. When there is a crowd of Singaporean tourists attending certain events, I’ll target the advertising there. The results were effective in helping Sate Ratu to be seen,” Seputro said.

In order for the investment wasted and misdirected, Budi must actively find the appropriate data. He must do some research to find moments in Yogyakarta which brings more tourists from abroad.

He also archived photos from tourists who stopped by his shop in its Instagram account. Currently, if you look at @sateratu, there are story-highlights illustrating a particular country’s flag that contains photos and videos of the Sate Ratu reviewer from such countries. There are the United States, Venezuela, the Philippines, Germany, the Netherlands, and many others.

“Digital media is very effective in helping businesses expand – in the sense of reaching potential customers from a wider area,” he added.

Strategy for business diversification

One of the products in Sate Ratu's menu — One of the products in Sate Ratu’s menu

In fact, there are many satay sellers around Yogyakarta, moreover, especially the signature dish like Sate Klathak. Seputro also tried to present a product with a unique blend. He thought unique selling points like this are important for a business, especially the newcomers.

If the culinary products with a long time history can rely on mouth marketing for its popularity, the new players will have to struggle to introduce their products. Sometimes, unique and delicious dishes might not sell in the market without good marketing and business traction.

The use of digital channels is Sate Ratu’s way to popularize its business products. Especially, since they’re targeting a niche tourist, although it’s not limited for domestic tourists.

“Initially, the online promotion brought tourists to Sate Ratu, since then, we build interactions that made visitors increase our online presence. They post and give a review. Currently, reviews or posts from visitors are used for promotion, to be posted in other media,” Budi said.

Although without any exact figures, Sate Ratu is regularly visited by hundreds of foreign tourists every month.

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This article is a part of the New Economy initiative. DailySocial is currently reporting on success stories of SMEs or non-technology businesses that capable to leverage growth through digital channels. Do you have some stories on the New Economy initiative? Feel free to share it with [email protected].

Original article is in Indonesian, translated by Kristin Siagian

Analyzing Gojek’s Decision to Acquire Minority Ownership of Blue Bird

In the recent regulatory filing on February 14th, PT Blue Bird Tbk (Blue Bird) announced the operator’s holding company has sold 4.3% stock worth of $30 million (411 billion Rupiah) to the undisclosed buyer. Bloomberg named Gojek as a buyer, according to the rumor spread since the end of last year.

The public must be questioning the reason behind Gojek’s interest in Indonesian largest taxi company stocks. Based on our observation, there are certain points of concern when Gojek, in collaboration with Blue Bird trying to dominate the on-demand transportation services market in Indonesia.

Alliance and Innovation

The enemy of my enemy is my friend. Dealing with Grab and the large sum cash poured by its investors, including electric car development, the adage sounds legit as Gojek took (and tie) Blue Bird to join forces in “winning” the Indonesian market.

Grab has quite rapid innovation in Indonesia within the last year by initiating Greenline taxi and introducing the electric fleet with Hyundai — as one of its investors.

Rather than individually “battling”, the two ally and innovate. Blue Bird has a diversified broad product line, including BYD and Tesla electric cars, however, lacks of assignments on digital innovation.

In addition, Gojek has the most rapid innovation, including the payment channel, though a lack of diversification in transportation products. They are very dependent on the driver’s partner vehicles.

Digital transformation of Blue Bird

As a publicly listed company, it is literally visible that Blue Bird’s market capitalization and profits have not improved since its peak in early 2015 (before the high-penetration of on-demand services in Indonesia).

The current value of Blue Bird’s share then is at Rp 12,100. As of this writing 5 years later, the number has shrunk to Rp 2,400, it shows the company’s market capitalization to only one fifth.

Officially introduced as (minority) owner, Gojek should put technology transfer, such as a mapping system, PoI (Point of Interest) determination, and ways of communicating between drivers and passengers as its current focus.

This collaboration should be the green light, especially for public investors, that Blue Bird can afford to be sustainable and relevant. Unlike other taxi companies that flunked in a storm of on-demand services with heavy cash to burn.

Will this become a new trend?

We’ll have to wait and see, for the results of a broader partnership between the two companies this year. Gojek’s focus on pursuing revenues and profits has met its match with Blue Bird Corporation.

It is too early to speculate the angle of this collaboration, or whether synergy like this will become a new trend between technology startups and conventional companies.

The thing is, Gojek has been one step ahead in pulling Blue Bird, as a taxi company with the best brand value, from the pool of tempting competitors. It is not impossible that we will see GoSilverBird or GoBlueBirdElectric options in the near future.

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Original article is in Indonesian, translated by Kristin Siagian

The Story of Overpaid Talents in Indonesia’s Tech Startup Ecosystem

It is quite common to find most startups offering substantial salaries for a series of expertise. Software Engineer, for example, is a type of work that is often associated with a high salary in startups.

Not only engineers but some other occupations are also tempted by a large sum of salaries. All this is inseparable from the combination of imbalanced supply-demand human resources and startup culture that emphasized rapid growth compared to traditional companies.

Recently, there was a problem as we observed the startup habit of giving exorbitant salaries to their employees. First, when funding dried up, employees’ layoffs can occur quickly. Second, their previously high salary can make it harder for companies to recruit due to their grade which is considered above average.

The budget hotel startup, OYO, has recently made the news after firing thousands of its employees in India, China, and also in the United States. Similar official announcements have not yet been heard from their operations in Indonesia. However, rumors have been spreading on social media.

We discuss with several people from the headhunter’s office to find out more whether it is true that startups are to “blame” for resources’ too expensive labels and considered “damaging prices”.

Lack of Resources

David Wongso, who works as Transearch International’s Managing Director, a human resources recruitment company, said that the first thing to understand is the availability of human resources which is sadly not getting along with the growing number of startups in Indonesia, at least until 2030. Not only startups, but the rise of conventional companies to digitize their businesses also add to the imbalance of the supply-demand of digital talent.

David also discovered another factor on the lean structure of startups that often caused some employees to level up so quickly from junior to senior management. Therefore, David said it is not surprising that such a large gap can causes remuneration for some human resources swelling.

“Some of them get leapfrog promotions jumping from middle to senior management,” David told DailySocial.

Rendi – an alias – is Gojek alumnus with expertise in marketing. The ex-Gojek status has successfully paved the way to join other startups. Although, not exactly as stated by David, Rendi managed to jump over mid-level management when moving to another startup.

Rendi agrees on the startup habit that is willing to pour out a large amount of remuneration of the desired talents. However, this does not apply at all levels and places. As Rendi said, his previous office only provides fantastic remuneration at the senior management level, not the junior and middle levels.

“For example, entry-level marketing for the strategic category has quite low offering. Nevertheless, other marketing positions such as Head or VP or any kind can be the real deal because mostly hijacked from big companies,” Rendi said.

High Demand

Another story comes from Haryotomo Wiryasono who works as a senior consultant at Glints, a recruitment platform. Haryo claimed that the term overpaid for startup talents is quite debatable.

According to Haryo, the demands and workload of startup employees are the main factors of the high salary. Investors’ pressure to achieve growth and impact leads to the extra work of the startup members. This is different from the conventional business model of the company which focuses on profits and the company’s long-term survival even though the results are slower growth.

“They don’t have the privilege of conventional companies. While we know that one of the startups that we know the oldest, like Facebook, is still in its teens but it has a huge impact,” he explained.

The three people above admit that startup culture influences the workforce climate. Haryo claimed to get a story from his client that the price tag of startup talents is too expensive. Rendi, in his new place, had failed several times to acquire talents of well-known startups because of the different standard salary.

However, David who has a long journey in the HR recruitment sector said the expensive price tag was not everlasting sweet. It’ll soon be a burden for the workers if they are unable to meet the expectations of their price tags. In the end, exorbitant salaries for digital talents who have worked in startups can be justified if they succeed in bringing their expertise, which is actually needed by many companies.

“Indeed, digital talents selected and eliminated from startup, when they return to work in large companies, they must be able to adapt to the company’s culture. Whether they are overpaid and have no leadership and managerial skills, it will be an obstacle for them,” David said.

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Original article is in Indonesian, translated by Kristin Siagian

A total 92 Million Potential Users to Acquire Through Partnership Program

Shopee’s marketplace platform eventually become a part of the Online-to-Offline (O2O) business model by launching Mitra Shopee in Indonesia. Prior to this, two of its competitors have run a similar program, Mitra Bukalapak, and Mitra Tokopedia. The point is, Shopee has developed its own digital wallet, ShopeePay.

In terms of features, the three platforms have quite similar coverage. They developed the app to acquire micro-business players – targeting kiosk – to sell various digital products, such as PPOB vouchers and integrated e-commerce will be responsible for the supply chain.

The well-received digital payment service (digital wallet) is to encourage partnership penetration. It allows transactions – such as electricity tokens – made faster, therefore, to provide a better experience for partners’ business customers.

As the first to debut, Bukalapak claims to have around 1 million partners located all over the country, even in the third-tier areas. Meanwhile, Tokopedia’s AVP of New Retail, Adi Putra shared Mitra Tokopedia has acquired around 400 thousand micro businesses at the end of 2019. Shopee is yet to have data due to its new initiative.

Mitra Bukalapak's map throughout Indonesia / Bukalapak — Mitra Bukalapak’s map throughout Indonesia / Bukalapak

What to explore in the partnership program?

Based on the research titled The Future of Southeast Asia’s Digital Financial Services performed by Google, Temasek and Bain & Company, at least 92 million people in the productive age in Indonesia are still unbankable. It’s quite a large number, more than the total population in other countries in Southeast Asia, excluding the Philippines.

The unbankable is mostly assumed as people who are yet to have access to online services due to incapable to create a bank account to make transactions. The partnership program is basically to distribute offline agents in various cities to become aggregators, facilitating the unbankable to gain access to e-commerce products.

Another scenario, agents will be the distribution point for shipping goods. Some areas, especially remote areas, are difficult to reach by logistic services. A variety of payment services enable micro-businesses managed by agents to offer complete product variants with relatively cheaper prices.

Furthermore, there are three things e-commerce can obtain from this program. First, it helps product distribution by expanding coverage to the unbankable populations. Second, it supports product or brand expansion by having representation in certain areas. The third is, it creates opportunities for more effective distribution chains.

Market competition with other digital players

Obviously, 92 million is not a small number, in fact, it is a huge market potential considering the people are in the productive age. Unfortunately, this is not the competition of only three unicorn e-commerce companies, there are many other digital businesses currently focusing on the O2O market in Indonesia.

Payfazz currently has 450 thousand agents. The financial application makes it easy for SME owners to offer various financial products, including PPOB, bill payments, fund transfers, cash withdrawals, and credit payments. PPOB’s contribution every month nearly reached Rp1 trillion. The Co-Founder & CEO Hendra Kwik said PPOB is a service that contributes a large amount, each month nearly reached Rp1 trillion transaction value.

One of Payfazz agents, also kiosk owners / Payfazz

In addition, there are GrabKios by Kudo, Netzme, Paytren and many other platforms outside the e-commerce ecosystem that offer similar concepts. Not to mention how the popular digital wallet for consumers has also provided a complete feature of full payment – although some are integrated with e-commerce, such as Dana in Bukalapak and Ovo in Tokopedia.

Competition over agents has already begun, with digital business competition strategies that currently exist: price wars. Therefore, the stronger is the winner?

With the development of technology and the expansion of connectivity, the success of O2O is likely to depend on the consumer experience. Discomfort, delays or technical issues may cause a decrease in interest in related services amid strong competition between platforms.

The O2O concept is actually broader than just a partnership. World brands have adopted this approach. Despite the statistics stated 91% of brands failed to bring a digital experience to their retail stores.

Based on the successful case studies such as Amazon or Alibaba in applying O2O, there are several key points. First, make sure the O2O initiative is to facilitate online activities to happen offline. Second, it prioritizes personalized customer experience. Third, always run the business along with technological developments. Some brands are now using AR / VR to help improve product visualization.

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Original article is in Indonesian, translated by Kristin Siagian

GoPlay and the Challenges Ahead

The new original series by GoPlay, Gossip Girl Indonesia, is getting much of the public’s attention. The character names are kind of odd among society.

However, we’re not going in-depth with the series, instead, we’ll further analyze GoPlay’s strategy and future plans as the video-on-demand (VOD) platform. Gossip Girl Indonesia is not GoPlay’s first original content, after the recent ones titled Saiyo Sakato and Tunnel.

After all, GoPlay has not made any significant development in terms of strategy than the other VOD platforms, which is to make the most original content. In fact, the current scheme is quite a prerequisite to any of the video streaming.

“As a local-pride VOD platform, we have a big ambition to gather the largest catalog of Indonesian films and series. Therefore, we will continue to focus on original and exclusive content on the GoPlay platform to provide different and unique offers to Gojek users,” GoPlay’s CEO, Edy Sulistyo, stated to DailySocial.

The total of GoPlay’s original content is increasing, slowly indeed. In addition to the previous ones, other titles such as Kata Bocah The Show, Filosofi Kopi The Series, Haha Club, and Namanya Juga Mertua have listed on GoPlay’s catalog.

Edy said that the team is currently preparing two new content in the near future, the reality show titled Bukan Keluarga Biasa, a special series of Ramadan Jadi Ngaji, some other titles are still undisclosed.

Content is not the only issue

Pushing the production of original content has become an unwritten obligation for VOD service players. However, by focusing only on this issue won’t make them win the competition.

First of all is the price aspect. Comparing to the other players, GoPlay subscription fees are more expensive. The cheapest cost per month at iFlix is Rp. While Netflix, which is the most popular video-on-demand service, pays the lowest Rp.49,000 per month for mobile-specific services.

This is not a simple matter considering the behavior of Indonesian people is relatively price sensitive. Moreover, the content offered by GoPlay does not differ much from Hooq, iFlix, and Viu which concentrate on local and Asian content.

Another stumbling block for GoPlay is limited access to watch only on mobile phones. For the record, all content provided by previously mentioned competitors is accessible on other devices. This can be something to withstand the GoPlay’s growth rate in its early days. Edy promised that he would launch new innovations to improve the customer’s viewing experience.

“Today, there are several new features that we currently develop this year in order to improve the viewing experience, and we will further inform you of this,” he added.

GoPlay’s opportunities

GoPlay’s presence is not without solutions. In terms of subscription fees, they have at least a short-term solution that is creating cross-service promotions. For instance, they create a bundling for GoPlay subscription package for two weeks with a GoFood voucher worth Rp360,000 and to be redeemed with only Rp.49,000.

As we all know, GoFood is one of the strongest services out of a total of 20 services on the Gojek platform. This cross-promotion can also be GoPlay’s preferred technique to simply attract consumers to subscribe to their video streaming platform.

GoPlay has another ammo as a quite extensive network of resources in the film industry. GoPlay, under GoStudio, has several times contibuted in the production of the country’s popular films. Aruna & Lidahnya, Kulari to the beach, 27 Steps of May, are part of their contribution.

artists who play roles in Gossip Girl Indonesia / Gojek

Well-known artists in the film industry have collaborated with GoPlay to create a persuasive content lineup. Nia Dinata, Gina S. Noer, Angga Dwimas Sasongko, Ifa Ifansyah, are a list of names which is proven that GoPlay has a reliable network of filmmakers to win the audience.

“We can also say that in just the last two months, the number of GoPlay access users has increased more than thirteen times exponentially and continues to grow according to plan in a proud manner,” Edy said confidently.

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Original article is in Indonesian, translated by Kristin Siagian

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Greenly Practices the New Retail Concept for Healthy Food Products Market

The new retail concept is getting popular among businessmen. The tech-based operation is quite fit to speed up offline business’ growth. Greenly, a fast-casual F&B retail network offering various healthy food and beverages has adopted the approach.

Greenly was founded by Liana Gonta Widjaja and Edrick Joe Soetanto. Liana is a Bachelor of Science from the University of California majoring in nutritional science, dietetics, who has begun her career as a nutritionist. Erick is a serial entrepreneur who also graduated from the University of California.

The healthy food business debuted in January 2019 in Surabaya, with 5 outlets. One is located in the mall with a restaurant and cafe concept, while the other 4 branches serve orders as cloud kitchen – taking orders through on-demand applications such as GoFood or GrabFood.

In a year, Greenly claims to have managed growth up to five times with hundreds of orders every day.

“Our business model is new retail with an online to offline (O2O) approach, we adopt a multi-channel sales pattern in distributing products. Using this strategy, Greenly not only has a physical store in a shopping center like traditional retail but also operates a cloud kitchen and sales through online platforms,” Greenly’s Director & Co-founder Edrick Joe Soetanto said.

Entering its second year Greenly managed to secure seed funding led by East Ventures. The fresh funds received will be used for product innovation, technology development and expanding its network in Surabaya, including other cities.

Optimizing technology to leverage business

Furthermore, Soetanto said the new retail strategy with the O2O approach is what distinguishes the business from other conventional services and other similar businesses.

Greenly also developed a system with some leading features in order to be more effective, developed, and loved by its customers. The stuff being implemented are including supply chain management, POS, accounting and taxation systems, HRIS and payroll, also third-party delivery systems, user loyalty, and pick-up orders.

“The current technology has supported Greenly run business and serve customers in maximum effort. The development of backend technology helps us manage the supply chain efficiently, particularly since we manage fresh & perishable products with a very short extent. With the development of infrastructure technologies such as demand forecasting, inventory management, and logistics optimization, we can maximize production output, manage resource capacity effectively, track inventory accurately, minimize waste, and optimize distribution,” Soetanto added.

He also mentioned that technology integration and supply chain efficiency enable them to cut into the minimum operational cost, therefore we can offer products at affordable prices.

Integration with delivery services of third parties through the cloud kitchen concept is claimed to have succeeded in making dozens of Greenly customers comfortable.

Today, for the first three months of 2020, they are targeting to open 3 new outlets in Pakuwon Mall and Tunjungan Plaza, Surabaya. The first outlet in Jakarta will also be launched, located in the Senopati area. This year, Greenly is to focus on product development, technological innovation, customer growth, and expansion both in Jakarta, Surabaya, and other cities.

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Original article is in Indonesian, translated by Kristin Siagian

Moka Partners with P2P Lending Platform to Distribute Funding for SMEs

Moka’s innovation as a SaaS (Software as a Services) provider for cashiers is not limited to the features in the application. They also present services to help SMEs develop businesses. One of those is Moka Capital, a service that connects SMEs with various types of capital institutions under OJK supervision.

Moka Capital practically began operation since mid-2018. Currently, they have worked with various p2p lending platforms such as Koinworks, Taralite, and Modalku.

The Moka team is said to have distributed capital loans worth more than Rp40 billion to more than 300 business people. They offer various numbers of loans from IDR5 million to IDR2 billion with tenors from 3 to 18 months.

“Systematically, we provide access for Moka merchants to connect with the integrated fintech partners. Through the back-office, merchants can choose partners they see fit to each the requirements that have been attached,” Moka’s VP Brand & Marketing Bayu Ramadhan said.

Moka also claims the submission process through the Moka Capital system is easier than conventional loan products. In addition, funding is offered without collateral.

“Merchants can submit applications without attaching financial reports and transaction lists because all sales data have been integrated with the Moka system for the purposes of credit analysis for partners,” Bayu added.

Moka’s journey to help merchants is not without obstacles and challenges. One of which is to give an understanding that easy access to investors can help businesses to develop.

“Moka will expand collaboration with various financial institutions and the financial services industry in Indonesia, to provide relevant loan products, therefore, more business players can benefit from business development through capital funds obtained through Moka Capital. Currently, Moka is conducting a trial collaboration with various other institutions to provide funding in the form of equity crowdfunding and credit line facilities,” Bayu said.

Moka currently runs several digital ecosystems besides POS, including Moka Pay, Moka Capital, Moka Fresh, and Moka Connect. Moka Pay is a payment aggregator application, while Moka Fresh is a service that connects food suppliers for culinary merchants.

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Original article is in Indonesian, translated by Kristin Siagian

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