Indonesian online marketplace firm Tokopedia has launched a new app called Mitra Tokopedia to extend its commerce battle into the online-to-offline space, which has become an appealing market for a number of tech companies.
In a release, the company said, its O2O service will allow anyone with the app to sell a variety of Tokopedia’s digital products such as internet data, electricity tokens and online game vouchers.
Mitra Tokopedia, which translates as Tokopedia Partners, is particularly aimed at owners of small shops and kiosks, who will bridge the gap between the online retail space to offline customers.
With the help of these “partners”, offline shoppers would be able to make cash payments to purchase online products, further widening Tokopedia’s consumer base.
According to Tokopedia COO Melissa Siska, the new app can be “a solution for traditional retail players to be able to participate in technological development trends”.
By reaching out to offline customers, Tokopedia is targeting the 45 per cent of Indonesia’s 240 million population that are not connected to the internet.
It is a huge market with mouth watering prospects, which has not gone unnoticed.
Just months earlier, Indonesia’s other e-commerce unicorn Bukalapak revealed that it has started implementing an O2O commerce business model, signing up mom-and-pop shop owners to become agents and help shoppers without internet access or those reluctant to make online purchases to order online products while paying in cash.
The company said it has enlisted more than 300,000 kiosk owners in little over a year to offer its range of services. Bukalapak co-founder and president Muhamad Fajrin Rasyid said the kiosks, known as warungs, will help the company tap into 90 per cent of the population who have never bought something online.
Well before Bukalapak and Tokopedia’s interest, the Indonesia’s offline commerce market has already been a battleground for a few tech firms, most notably Kudo and Kioson.
Founded in 2014, Kudo facilitates online transactions for Indonesian consumers, particularly targeting those with no bank accounts and in small towns and cities, helping them to make purchases online through its agents.
The promise and potential impact of Kudo’s business was detected early by Southeast Asian ride-hailing giant which moved to acquire the Indonesian firm last year in a deal said to be valued over $100 million.
At the time of the acquisition, Kudo’s network comprised more than 400,000 authorized agents in 500 towns and cities across the country.
Kioson, meanwhile, holds the title as Indonesia’s first ever publicly-listed startup. It’s business model is a combination of online-to-offline (O2O) e-commerce and payment services. However, the Kioson also describes itself as a commerce aggregator, selling products from online stores like Tokopedia, while also collaborating with numerous banks.
Kioson was listed on the IDX in October 2017 after raising Rp 45 billion ($3.4 million) in its IPO. After seeing its shares oversubscribed 10 times during the bidding period, trading in Kioson’s stock was halted twice in a week due to a significant cumulative price hike.
Looking to follow Kioson’s lead into the public market is another tech company called DIVA which has a business line that also targets the country’s offline population.
The company, which has already announced IPO plans, claims nearly 17,000 SMEs partners from various industries. With a target of $53 million to be raised from its IPO, DIVA is anticipated to be a significant player in Indonesia’s O2O space.