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Sayurbox is developing a sustainable agricultural supply chain in Indonesia | Startup Stories

Written by Khamila Mulia Published on     5 mins read

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Technology-enabled grocery service and B2B agricultural provider Sayurbox has partnered with over 10,000 farmers in Indonesia.

As online marketplaces started to take off in Indonesia in 2016, serial entrepreneur Rama Notowidigdo thought about creating a digital marketplace where farmers could directly connect with customers, giving birth to Sayurbox. Yet, he quickly realized that farmers, who usually live in rural areas, aren’t quite familiar with technology and sales, so he quickly pivoted his business idea into a technology-enabled grocery service and B2B agricultural provider.

The company buys fresh produce from farmers and sells the goods back to end customers through the Sayurbox app and website. It also sells large quantities of produce to various supermarkets and beverage manufacturers in Indonesia. The firm streamlines the agriculture supply chain and logistics process by working with groups of farmers in West Java, Surabaya, and Bali. It also directly operates warehouses and sourcing hubs located close to the farming lands, making it easier for farmers to ship and store their fresh produce.

Sayurbox was born in 2016 after Notowidigdo met co-founder Amanda Cole, who was running a farm in West Java. Cole put her knowledge in farm operations and management, while Notowidigdo provided his expertise in building the tech business. The same year, industrial engineer and tech entrepreneur Metha Trisnawati also joined the firm.

Sayurbox CEO Amanda Susanti Cole, CTO Rama Notowidigdo, and COO Metha Trisnawati. Courtesy of Sayurbox.

With millions of hectares of arable lands across 17,000 islands, agriculture is a vital sector in Indonesia, employing the largest share of the country’s workforce. Data provided by the Central Bureau of Statistics of Indonesia in 2020 shows that nearly 30% of Indonesian workers, or around 8.23 million people, depend on the agriculture sector for their livelihoods. Yet, the sector faces many problems, including poor supply chain infrastructure and lack of access to advanced technology.

“One of the main problems [of agriculture supply chains] is that plantations are scattered in rural and remote areas with poor infrastructure, making transportation extremely difficult. Farmers have zero access to customers as they need to go through middlemen to sell their products,” Sayurbox chief financial officer Arif Zamani told KrASIA.

The startup not only creates a sales channel for farmers but also provides business insights based on data collected by the app, so farmers can learn demand patterns in the market and adjust the supply accordingly. The Sayurbox team runs regular workshop programs to educate farmers on reading the data to optimize their production, while it also shares frequent insights via WhatsApp.

“Supply and demand often do not match. For instance, the price of chilis fluctuates drastically due to erratic supply, while demand is always there. This can be prevented because chilies aren’t a seasonal plant. They grow throughout the year, so farmers should be able to plan better to always meet the demand,” Zamani said.

Big potential, plenty of challenges

The company currently partners with around 1,500 farmer groups in Indonesia, totaling over 10,000 individual farmers. Sayurbox has five sourcing hubs in West Java to serve customers in Greater Jakarta and two other hubs in Surabaya and Bali. “This number is certainly very small considering that Indonesia has more than 33 million farmers, so there is plenty of room for us to grow,” said Zamani.

Sayurbox chief financial officer Arif Zamani. Courtesy of Sayurbox.

Sayurbox monetizes by taking a margin from the final price of goods compared to the price it pays to farmers. The firm did not specify the range of this premium but said it depends on the products and their quality.

In May, Sayurbox raised an undisclosed amount in its Series B funding round led by Astra Digital International and Syngenta Group Ventures, with the participation of Ondine Capital and other investors. Despite the company not disclosing the figure, Astra revealed a USD 5 million investment in Sayurbox in its Q1 financial report. Sayurbox is also backed by Indonesian e-commerce unicorn Tokopedia.

The company earned its chops by blending local know-how with business patterns beyond its home market. “Amanda has been to Hangzhou and enjoyed discussions with some of the best internet and e-commerce business CEOs in Greater China and Southeast Asia, and she is able to transfer that experience into optimizing Sayurbox’s products,” said Randolph Hsu, founding partner at Ondine Capital. “When I talked to Amanda, we realized that she is very focused. She understands that a platform business can extend to other areas like fintech, advertisement, or data analysis, but instead of being distracted …  she puts all of her effort in bringing the best user experience to her customers.”

The vast market around the agricultural sector in Indonesia has inspired many technopreneurs to build businesses addressing agriculture challenges. Besides Sayurbox, other agritech startups in the country include TaniHub, Kedai Sayur, and iGrow, recently acquired by LinkAja.

Sayurbox wants to differentiate itself by also targeting the waste problem in the supply chain. Fresh produce is usually categorized by grade standards that specify the quality and condition of the items. In Indonesia, categories usually range from A to B and imperfect, according to Zamani. Imperfect produce, which is usually fresh and edible but may have blemishes or bruises, is often left in the field or destroyed as it is mostly not accepted by supermarkets or other distributors.

Sayurbox, however, collects fruits and vegetables from all grade standards as long as they are feasible to minimize the losses of harvested crops, Zamani said. “Building a business in this sector brings many challenges. First, we need to persuade customers to buy imperfect products. Most customers only want to buy grade-A products, which means they are contributing to large food waste as no one purchases imperfect goods,” said Zamani.

The platform incentivizes consumers to buy imperfect goods by selling them at lower prices, Zamani explained. Sayurbox also continuously educates customers through online campaigns on its app and social media accounts.

“The next challenge is to gain trust from farmers. We have field teams who regularly meet with farmers and provide them education and training on various topics. For example, how to best handle productions and optimize crop yields, money management, and so forth,” Zamani added. The company claims that its partner farmers can reduce waste from 30% to 5% in every step of production thanks to the platform. The firm also offers farmers a regular weekly income after joining the system, Zamani said.

The startup is working with fintech platform AwanTunai to channel loans to farmers. Farmers who have been partnering with Sayurbox for over six months can apply for loans of IDR 10 to IDR 50 million (USD 704–3,500), dispensed by the company’s partner. So far, Sayurbox has facilitated loans to more than 5,000 farmer groups.

Going forward, Sayurbox plans to expand its coverage and reach more farmers outside of Java. The company is developing a tool that will make it easier for farmers to analyze data and business insights, Zamani said. The startup will also continue to improve its capabilities for a more efficient distribution process. “Since the pandemic, our daily orders have increased 4x, so we’ll continue to focus on optimizing services for existing customers, especially those in Greater Jakarta.”

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This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.

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