With an average size of only 15 square meters, Indonesian warungs may be small in size, but these roadside stalls play an oversized role in Southeast Asia’s largest economy with a consultancy firm. North Ridge Partners estimates they contribute nearly 80% of the country’s $ 380 billion retail market sales.
Jakarta-based start-up, Warung Pintar, seeks to bring technology to the warung network across the country, hence its name which translates into “smart shop”.
Ride-hail rider hubs
The company started its journey in 2017 by offering pre-fabricated carts and stands in bright yellow color with Wi-Fi connection and charging stations; added extras designed to attract drivers to Indonesian ridesharing services such as Grab and Gojek.
Warung Pintar allows merchants to restock their shelves without having to leave their kiosk. In contrast, in the pre-digital age, these warung owners could take up to six hours to restock through multiple agents and sub-wholesalers.
In 2020, Warung Pintar strengthened its network of local wholesalers, offering the possibility of supplying stores within a radius of 5-10 km, many of which are new customers for wholesalers.
A fundamental solution for warung owners
This has increased the number of stores and wholesalers within the Warung Pintar ecosystem, from around 5,000 in 10 cities at the end of 2019 to over 500,000 in 200 cities and towns in Indonesia today.
Warung Pintar co-founder and CEO Agung Bezharie Hadinegoro told Capital.com that the start-up aims to increase the number of store networks to one million by 2022 and extend the supply chain to last mile thanks to artificial intelligence software.
“After three years of deep diving into warungs, we realize that in order to create a digital solution for them, we cannot grow without involving others,” he said. Agung says Warung Pintar has gone from “yellow wagons with Wi-Fi” to “fundamental solution” for warung owners.
Among the brands it has cooperated with are Reckitt Benckiser, which produces soaps and detergents, and Coca-Cola Amatil, the local unit of the American brand.
“By cooperating with wholesalers and brands, as well as with its network of 50 warehouses and depots, Warung Pintar can offer complete digital solutions for a more efficient supply chain, a more transparent distribution process, with access to finance. and placement of branded advertisements for additional income. for warungs, ”says Agung.
As part of this campaign, Warung Pintar acquired Bizzy earlier this year. Bizzy enables companies to track the distribution of their products and obtain data on local supply and demand trends.
Digitization stimulates price competition
“Warungs are a vital channel for fast moving consumer goods brands and partners, as they distribute over 70% of products to end consumers. It is imperative that FMCG brands and companies provide fast and quality service to warung owners, ”Agung says.
“Digitization also allows warung owners to choose quality products at transparent and competitive prices that can increase warung revenues by up to 40%,” he adds.
Panji Anom is certainly happy with Warung Pintar. He opened a yellow liver stand in December 2019 and within six months he had attracted over 40 taxi drivers as regulars.
A happy customer
Panji started off with just IDR 900,000 (around $ 60) to store cigarettes, instant coffee, and noodles, as well as a cart provided free of charge by Warung Pintar. In six months, it upgraded to a 3m x 5m kiosk, which gave customers more space to sit and chat, which led to more customers.
Panji is happy with the deal.
“There are not many cigarette products in the app. But, my main motivation during the opening was to meet more people and make new friends, as for the profit, I don’t really calculate the margins, but there is enough to pay the rent of the store, to do the full of goods, and when my children need to buy books and other school materials, there is enough to cover everything, ”said the father of three.
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