Indonesia-based online marketplace Tokopedia is expanding its one-day delivery offer to include most of its Indonesian products. This will help the company secure its leading position in Indonesia’s e-commerce sector.
In an interview with Nikkei Asian Review, Tokopedia founder and CEO William Tanuwijaya shared that the company focuses mainly on Indonesia and sees immense growth opportunity in the region. This huge opportunity has, however, also caught the interest of e-commerce companies from other parts of the world recently.
Amazon, for example, ventured into Singapore recently and has plans to enter Indonesia. Shopee and Lazada — the leading online marketplaces in Southeast Asia — have directed huge investments into the Indonesian market as well.
In the interview, Tanuwijaya said Tokopedia will look to buy minority stakes in local companies to provide more services and tie up with potential partners.
Many e-commerce companies across the world have been using delivery speed to compete with counterparts. Amazon, for example, will be reducing its two-day shipping for Prime members to a mere one day. Indonesia’s large geographical area, which includes 17,000 islands spanning 5,000 km from east to west, poses a huge challenge for achieving one-day delivery.
Tokopedia still doesn’t carry stock. Instead, it taps into a strong network of 11 logistics companies to deliver 65 percent of its products either on the same day or one day after receiving the order.
The company aims to extend its one-day delivery to more than 90 percent of its products by leveraging on artificial intelligence technology to predict demand. Demand prediction provides sellers with a forecast of the number of orders from customers, and based on it, sellers from a distant province could place its stock in a warehouse close to the consumers beforehand.
Around 5 million of Indonesia’s 60 million small and medium businesses trade on Tokopedia. The site is well aware of this gap and plans to reach out to these offline businesses, including farmers, fisherman and wedding planners. It’s able to help these business owners by offering warehouse services.
Tokopedia has already begun buying up to 30 percent stakes in potential partners. They include logistics companies and offline businesses like wedding service provider Bridestory.
Founded by William Tanuwijaya and Leontinus Alpha Edison in 2009, Tokopedia is the No.1 online marketplace in Indonesia. It attracts an average of around 149 million monthly visits according to SimilarWeb.