Editor’s Note: Here’s a story from our archives we feel is relevant even today and deserves your attention.
Indonesian online marketplace Tokopedia received US$100 million through a series E funding by Sequoia and SoftBank last year, and the world has been waiting for its next breakthrough. Typically, it is expecting international expansion or an increase in the marketing budget.
But Tokopedia has decided to take a different route.
“We have always realised that Indonesia is neither Silicon Valley nor China nor India,” said William Tanuwijaya, during the interview. “The greatest challenge that we are facing lies in talent. Our first homework once we received the funding is how to increase the quality of our human resources.”
Aggressive hiring becomes the next step to take. Tokopedia has grown from 80 to 360 people in a year, with 17,000 applicants flooding in each month. Not only has the company begun to hire multinationals, but it has also started to hire Indonesians who have been working abroad to return and help build the country by working at Tokopedia. Hiring the best professionals, combined with a company culture focused on knowledge-sharing, allows Tokopedia to achieve its goal to produce leaders in Indonesia’s tech startup scene.
“If there is anything we can learn from Silicon Valley, from companies like Google who produced leaders both inside and outside of the company … If Indonesia wants to move forward, then companies should be able to produce leaders,” he stated. “People said that there has not been any bold move made by Tokopedia since the funding. This is because we focus on developing what is inside of us,” he added.
Hotbed for e-commerce: Sumatra and Borneo
Since its launch in 2009, Tokopedia has seen how Indonesian e-commerce changed and progressed rapidly. Back then, COD was the customers’ most preferred payment method, signifying distrust in the idea of e-commerce itself. But things have begun to change. “We have 7.5 million transactions happening on our site every month. That is 7.5 million [examples] of trust,” said Tanuwijaya.
Tanuwijaya finds inspiration from stories that have happened within Tokopedia itself. There are 300,000 merchants doing their business through Tokopedia, and all of them came from different backgrounds.
“We have a former cleaning service worker, a housewife, a college student … Each of them has successfully built their own business through Tokopedia,” Tanuwijaya said of the company’s new marketing campaign “Ciptakan Peluangmu” (“Create Your Opportunity”).
The marketing campaign is emblematic of Tokopedia’s spirit of utilising technology to grow individual businesses. Apart form enabling SMEs and home businesses to incorporate e-payment and credit cards for their transactions, Tokopedia also fosters partnerships with 11 shipping companies — including superstar startup Go-Jek to enable same-day delivery for customers.
“Many businesses are seriously considering to close down their offline shops, noting the limitation that they have, having only been able to reach buyers from that particular area … Moving their business online allows them to reach across Indonesia at a relatively lower price,” shared Tanuwijaya.
There is indeed a strong demand for e-commerce from islands outside of Java, with Sumatra and Borneo gracing the second and third ranks of Tokopedia’s top users. “Might have something to do with the fact that there are less shopping malls in the area,” he said.
But there is a much bigger reason behind that. To explain it clearly, Tanuwijaya picks up a marker and draws a map of Indonesia. “Before e-commerce, all goods are centred in Java. Retailers have to go to Jakarta to buy them in bulk before they can sell it in their own cities. Add this to the fact that not all goods are manufactured in Indonesia, and it is clear why prices tend to skyrocket once they reach tier two and tier three cities outside of Java,” he explained.
“Online marketplaces give access of information to customers, allowing them to know the real price of goods sold in Jakarta. It helps them make smarter decisions when shopping,” he added.
All comes back to Indonesia
As an entrepreneur, Tanuwijaya is proven to have a strong sense of nationalism and concern for the future of Indonesia’s digital industry. He sits on the advisory board of Indonesian e-Commerce Association, which has been actively talking to the Minister of Communications and Informatics to develop the e-Commerce Roadmap.
“We definitely can learn a lot from the US in 1998,” said Tanuwijaya. “President Clinton had a great vision for the Internet industry. Instead of enforcing protection, he created a regulation that encourages competition,” he added.
Competition has had the ability to encourage protection for consumers, as it pushes producers to create only the best products. Tanuwijaya believes that users are getting smarter each day and are able to make decisions for themselves. This is a step that Indonesia needs to take to move forward, apart from building better infrastructure and stronger Internet penetration.
Deep concern for Indonesia is another reason why Tokopedia has no plans for expansion outside the country — it would prefer to expand in terms of value. “We always tell ourselves that we are not an e-commerce company, we are an Internet company. We may [have] begun with e-commerce but in the end we want to be able to empower Indonesian society through Internet,” he said.
“We cannot disclose it yet, but we definitely have exciting new verticals coming your way.”