Indonesia’s express and logistics courier major JNE Express is betting big on debt capital and self financing to fuel its growth plans, targeting revenues to the tune of Rp 5.7 trillion, or $427.5 million, by the end of 2017, its president director M. Feriadi told this portal.
Feriadi said the firm had been approached several months ago by PE firms but the company doesn’t plan to have a foreign investor and had decided to seek a bank loan instead. “We want to grow organically. Our domestic business reach, and our growing e-commerce logistics business, speed of delivery and already established infrastructure are our big growth drivers” he said.
JNE Express, whose full name is PT Tiki Jalur Nugraha Ekakurir, claims to have grown more than 30-40 per cent in the last two years, and captured almost 22 per cent market share in Indonesia’s courier market. Its counts its large domestic presence, spanning islands spread far and wide, and deep focus on the local market as one of its biggest advantages against many new competitors such as Go-Jek.
The company is the leading e-commerce logistics service provider with customers such as Tokopedia, Bukalapak, and Blibli.com. Around 80 per cent of JNE’s total revenue comes from retail, of which 50 per cent is from e-commerce. The firm claims to have completed 18 million deliveries per month this year, a 12.5 per cent increase from last year. Currently the company has 16,000 locations and is planning to increase the number by almost 15-20 per cent locations by end of year.
JNE Express started its journey with eight employees, including its four founding members, and around Rp 100 million of capital in 1990. It has since transformed into one of the country’s biggest logistics companies with 16,000 employees and plans to invest around Rp 500 billion, or $37.5 million, by end of this year. JNE plans to invest in infrastructure, IT business and new business partnerships.
The logistics firm is also planning to enter into a crowd sourcing partnership with a Singapore-based company soon that will be able to deploy JNE’s employees. It is also planning to partner with banks, and fintech companies as it seeks to diversify into new areas including fintech. “We are thinking of providing fintech services as well. We have a few projects in the works to be announced next year,” said Feriadi.
The predicted entry of Amazon in Indonesia soon is also seen as a potential opportunity for JNE Express. Feriadi said the e-commerce giant will need local partners with a strong reach in the archipelago.