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Start-up giants race to digitize ‘warung’
Homegrown start-up giants are tapping into the underserved sector of warung (kiosks), as the COVID-19 pandemic accelerates the digitalization of small enterprises.
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Fatimah, a 62-year-old owner of a small kiosk in the flood-stricken Kayu Putih subdistrict of East Jakarta, waits for customers inside her kiosk on March 4. (JP/Dzulfiqar Fathur Rahman)
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omegrown start-up giants are tapping into the underserved sector of warung (kiosks or mom-and-pop shop), as the COVID-19 pandemic accelerates the digitalization of small and medium enterprises (SMEs).
In a country where small businesses account for more than 60 percent of the economy, a warung is the nearest retail spot for many people to make small purchases of snacks or household supplies.
Indonesian unicorn Gojek is the latest player to enter the race, with the September launch of GoToko, an online business-to-business (B2B) platform that allows small retailers to directly access brand principles, give product recommendations and use Gojek to receive stock shipments, among other things.
“We want brands to come on board with us to better cater to the underserved, as it is sometimes difficult to distribute goods to warung,” GoToko CEO and president director Gurnoor Singh Dhillon said during a press briefing on Tuesday, explaining that warung usually bought products in small bulk and often faced difficulties with the lengthy distribution chain.
There were an estimated 2.5 million underserved warung in the country that did not have access to efficient assortment and reliable logistics support, Dhillon added.
Small businesses have been severely impacted by the COVID-19 pandemic, as people have been avoiding leaving their homes over fears of contracting the virus.
Meanwhile, the small retailers make up a major chunk of the US$380 billion retail market in Indonesia, according to management consulting company Redseer.
