Indonesian neighborhood shops, locally known as warungs, are benefitting from digitization of small businesses. They have attracted a lot of attention from tech startups in the past five years. Gojek is the latest player in the race, with its new GoToko service launched in September.
GoToko enters a market populated by incumbents like GrabKios by Kudo, Mitra Bukalapak, and Mitra Tokopedia—each claims to have digitized hundreds of thousands of warungs in the country. Nonetheless, Gojek believes in its existing infrastructure and ecosystem to grab a slice of the market.
“There are over 3 million warungs, but around 2.5 million of them remain underserved,” GoToko CEO, Gurnoor Singh Dhillon, told KrASIA. “We launched GoToko to close the current gap in the market and address whitespaces that are not covered by existing distribution networks.”
GoToko connects underserved warungs with consumer goods companies, giving shop owners access to a wide range of products at competitive prices and with timely deliveries. The system gives warungs the opportunity to improve operations, reduce costs, and ultimately grow, according to Dhillon.
The platform has already partnered with Unilever since its launch, and it plans to add more partnerships with major companies. “We offer a strong value proposition to brands. By working with us, brands can extend their reach to the many underserved warungs in Indonesia and increase the visibility of their products,” said Ghillon.
Corporate partners can also gain real-time market intelligence through the GoToko platform, allowing them to evaluate the performances of various products for different target markets. “We have already received positive feedback from many brands, and are seeing great demand to work with GoToko and serve traditional retailers better,” Ghillon said.
GoToko is the latest of a long list of services for micro, small, and medium enterprises (MSMEs) introduced by Gojek. In June, the firm received investment from Facebook with the aim to tap into Indonesia’s e-commerce and small businesses.
KrASIA recently talked to Dhillon about the firm’s plan to digitize even more warungs across the country. “With warungs being a crucial part of the underserved market in Indonesia, we continue to explore how we can partner with industry players to scale up our efforts in this area,” Dhillon said.
KrASIA (Kr): With many competitors in this space, what makes GoToko stand out?
Gurnoor Singh Dhillon (GD): With the majority of warungs in Indonesia being underserved, there is room for multiple players to work together and address the challenges within the market.
One of GoToko’s key differentiating factors is the support that we have from the Gojek ecosystem. By leveraging Gojek’s experience in building digital platforms for all segments of society, together with our extensive logistics network across Indonesia and strong relationship with brands, we are able to provide comprehensive service for warungs.
Kr: Besides managing stock, what other services are available on GoToko? Do you also equip kiosk owners with digital products to offer services like phone credit top-ups and bill payments?
GD: GoToko’s key service, for now, is the business-to-business (B2B) platform that we offer to warungs, giving them access to affordable supplies to ensure continuous and timely stock replenishment.
It’s still early days for us, but our ultimate aim is to be a long-term solution for underserved warungs, so that they can better manage inventory, grow businesses, and meet the changing needs of consumers across circumstances. As we build out GoToko in the future, we will continue to look at ways to offer new product categories and services for warungs, based on their needs and feedback. This is also why we are focused on forming new partnerships with brands and deepening existing ones, so that we can widen our range of offerings and ultimately give warungs more product choices on our platform.
Kr: How does GoToko benefit from Gojek’s other services?
Here is an example: GoToko leverages Gojek’s robust logistics infrastructure and digital footprint across Indonesia for last-mile delivery. We offer a range of flexible delivery options, including both two-wheeled and four-wheeled vehicles that cater to the different needs of warungs. This ensures that items are delivered on time, no matter the order size or location of the warung. GoToko also contributes to the demand for Gojek’s logistics service, so it opens up an additional channel through which driver-partners can make deliveries and earn revenue.
Kr: How is Gojek aggregating the whole supply chain for warungs? In addition to GoToko, are warungs also equipped with other SME platforms like GoBiz?
GD: GoToko provides comprehensive services that enable more efficient supply chain coverage for underserved warungs, from sourcing of supplies to timely and seamless deliveries.
Gojek also has a full suite of solutions that help merchants of all sizes to digitize all aspects of their business. This includes GoBiz, GoPay, Moka, Midtrans Payment Link, and many more, covering areas such as marketing, order processing, payments, and administration. In the future, we hope to help warungs digitize more aspects of their businesses, so that they will be able to stay resilient across circumstances and enjoy long-term growth.
Kr: How does GoToko benefit merchants? How much can they save on operational costs after joining GoToko?
GD: The cost savings will vary from warung to warung, as it depends on the products purchased and their own individual needs. With that said, we believe that using GoToko’s services will enable them to achieve significant cost savings due to competitive prices, cost-effective and efficient delivery services, and growth opportunities that we offer.
Kr: How many warungs are using GoToko’s services? For now, are you focusing solely on Greater Jakarta?
GD: We have seen a good number of warungs using our platform since launch, and many have also shared positive feedback about our proposition and service. This is a strong step in the right direction as our initial strategy is to ensure depth, with an active base of warungs, rather than go wide with a large base but very little usage. However, we are focused on ultimately becoming the platform of choice for all underserved retailers throughout Indonesia, and will continue to scale up as the business develops. In line with that focus, we are hoping to bring GoToko’s service to other cities in Indonesia.
Kr: What is your long-term vision for this business line? Can you share some of GoToko’s plans for the rest of this year and 2021?
GD: Our long-term vision is to support the growth of more underserved warungs by offering them a comprehensive platform that meets all of their needs. GoToko has had a strong start, and we’ve seen good traction through our operations so far. We aim to continue reaching out to more underserved warungs in Indonesia to support them in their digitization and growth journeys.
One of our key focus areas going forward is to deepen our relationships with brands, so that we can connect more warungs to more suppliers in the market. This will provide them with convenient access to an even wider selection of products at competitive prices—and more growth opportunities. On the supply side, the GoToko platform is an avenue to expand the reach of brands with more efficient supply chain coverage, enabling them to better meet the needs of all segments of society.