The logistics industry has been impacted by COVID-19, but at the same time is experiencing one of its fastest growth phases. This has been the same across the world and Southeast Asia is experiencing the same contradictory issues. One market that is poised to grow aggressively is Indonesia – the region’s largest market.
Indonesia’s logistics market is projected to hit US$240B by 2021, roughly the same size as India’s US$215B logistics market according to the 2020 estimate.
However there are deep-rooted issues within the industry, not least of which is that it is extremely inefficient. Besides the challenges surrounding the geographical issues of Indonesia’s vast and varied landscape – there is great potential to introduce new efficiencies within the process.
This is where local startup Shipper, who raised a Series A round led by Prosus Ventures, is planning to be the disruptor in the market. We had the chance to speak to Shipper COO and co-founder Budi Handoko about their plans in Indonesia.
Find out what he had to share with us below.
Congrats on your recent raise. How will you be utilising those funds in your business?
Shipper will use the fund to expand the team to help build additional logistics technology and to expand on operations as well. We aim to provide the best technology-enabled logistics platform in Indonesia to serve businesses better than anyone else.
COVID-19 has spurred exponential growth in the logistics industry in the last few months, do you foresee this continuing for a while?
Yes, we do believe that growth in the logistic industry will continue even as the economy across the globe slowly reopens as we transit to the recovery phase.
During the pandemic outbreak, many businesses were forced to operate online in order to ensure business continuity. As a result, the logistics industry has experienced unprecedented growth amid COVID-19 as more consumers shift to online shopping activities.
Consumers have established a new spending habit and even when people return to their daily routines as the world starts to recover, they would still want to continue to enjoy the convenience of logistics.
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What were some of the challenges you faced during the global slowdown and disruptions?
This pandemic has definitely impacted a lot of businesses, with many forced to stop operations temporarily.
One main challenge that we have faced is that customers tend to come and go during this period. But we always try to adapt and focus on building technology that will help empower our logistics’ partners and meet customers’ needs and demands.
The 3 biggest pain points we see in Indonesia’s logistics landscape are:
- There are too many different warehouses, fulfillment centers and shipping options
- The lack of transparency in pricing — tends to be overpriced
- Below average track-ability
These are the problems Shipper is focusing on solving.
We are working to restructure the complex world of logistics and aim to be the go-to logistics expert team for business owners to provide help in their business growth.
Can you explain how Shipper’s technology works and what it means for the logistics industry?
Shipper is a tech-enabled logistics platform that offers a one-stop logistics solution, from a multi-courier shipping platform to distributed warehousing and fulfillment network. Shipper was founded with a mission to create simple logistics experience for small and medium business owners.
Shipper connects customers with the best shipping partner for their needs. Customers are able to perform logistic operations such as shipping cost comparison, order creation, order tracking, shipping insurance, and others in one platform. On top of that, Shipper offers free pick up service without minimum order to simplify the package hand off.
Shipper’s warehouse and fulfillment service provides businesses with live inventory management, variable cost structure, and an overall hassle-free business operation.
As a multi-courier shipping platform, Shipper works closely with hundreds of express couriers and fulfillment partners to provide data transparency and efficiencies to everyone.
What is the growth potential for the Indonesian logistics industry?’
Indonesia’s logistics market is projected to hit $240B by 2021, roughly the same size as India’s $215B logistics market (2020 estimate). Despite its size, logistics in Indonesia is extremely inefficient. Obviously, some of the inefficiencies in Indonesian logistics are attributable to natural geographical barriers and complexities (17,000 islands) and also the explosive growth of e-commerce is challenging existing logistics infrastructure and serving as a catalyst for innovation.
Shipper addresses these logistics challenges with a favorable tech-enabled, asset light, variable capacity mode while demonstrating strong early adoption and promising unit economics.
What is next for the industry, as we start to go back to a semblance of normal?
The pandemic has indeed led to an unexpected rise in demand in the logistic industry as more and more businesses shift online.
As such, online retailers will continue to ship goods directly to customers, and businesses will continue to expand their infrastructure for warehousing, parcel delivery and fulfillment centres to cater to this demand.
For Shipper, we will focus on building a stronger team and recruit exceptional people with expertise who have the passion in solving existing logistics problems and building sustainable technology that will be used by the logistics network and our customers in decades to come.
We also aim to expand our businesses to other regions in Indonesia, as well as overseas.
What is next for Shipper in Indonesia and the region?
At the moment, our focus is on the Indonesia market. There is a lot of potential in Indonesia as the market is growing really fast. However, it is also a very difficult market to penetrate.
We are not looking to enter other markets at the moment, but we do have plans to expand across the region like Thailand, Vietnam and the Philippines in the long term.