Tokopedia Predicts GMV to Reach 222 Trillion Rupiah in 2019

Tokopedia estimates that the transaction value (GMV) this year will reach IDR 222 trillion, equivalent to 1,5% of Indonesia's GDP. Last year, Tokopedia's GMV stood at Rp73 trillion (contribution to GDP 0,5%). This estimate is higher than the projection of the Institute for Economic and Community Research FEB UI which says Rp170 trillion.

Tokopedia Co-Founder & CEO William Tanuwijaya explained, if this estimate is reached, it will be very interesting because the Indonesian economy can be centered on the Tokopedia platform. The company does not sell goods at all, but there is an impact that can be seen from millions of business people starting to do business on Tokopedia.

He also targets that in the long term, Tokopedia can increase its contribution to GDP by up to 5% in the next 10 years.

"Entering our second decade, we still have a long way to go because the digital economy has just begun. To push the contribution of GDP from 1,5% to 5%, we have to evolve by helping farmers, fishermen, so that they can enjoy the technological infrastructure that producers have enjoyed so far. " he explained, Thursday (10/10).

To achieve this target, Tokopedia began to change its business focus by sharpening its presence to the lowest levels of society. It is hoped that all elements of society can start utilizing Tokopedia's infrastructure to develop their businesses.

There are 100 million Indonesians living in rural areas who have had difficulty accessing the internet to study and start a business. When they want to buy goods, the price they get is usually higher than the price in urban areas because the distribution is difficult.

"In villages the challenge is that the infrastructure is not as good as in the city, but this is also an opportunity how we can encourage them not to have to move to the city if they want to start a business."

William's statement also emphasized that Tokopedia had no interest in going global. According to him, Makassar is more important than Manila, Sukanagara is more important than Singapore, so the company will continue to commit to being more relevant and useful for Indonesia.

Therefore, the company opens up opportunities for collaboration with many parties from across industries, both private and government. One of the initiatives that we have started, together with West Java Provincial Government by releasing Digital Village Powered by Tokopedia.

In the initial step, this Digital Village will be presented to 5 thousand villages throughout West Java as a community education space to learn all things digital. Whether it's how to take good photos, make emails, and so on.

William ensures that in the next 12 months the target of connecting 5 thousand villages will be achieved. West Java will be an experimental area for Digital Villages before being taken to other provinces.

"Then we will get feedback, so that when entering another province, the investment will not be too large. The mistakes that have been made in West Java need not be repeated."

Another innovation based on the spirit of building a village is a smart warehouse called Branch Store. It has been released in stages in Jakarta, Bandung, and Surabaya. "Frequent business development risks missed, we tried to break it through TokoBranch. So that physically entrepreneurs do not need to open new branches, just use our warehouse."

Together with the West Java Provincial Government, Tokopedia is now connected to the digitization of public services. One of them is the payment of Motor Vehicle Tax (PKB) via Tokopedia E-Sams.

William revealed that since the service was launched there has been a very significant tax revenue in July 2019, it is even claimed to be greater than the PKB revenue in West Java throughout 2018. "The result shows that we are the largest contributor to motorcycle taxes in West Java."

The government as a whole has 900 types of state revenues. If all of this can be digitized, of course, the state will be greatly facilitated in recording its income. In the future, people can pay passport renewal fees through Tokopedia.

Research with LPEM FEB UI

At the same time, LPEM FEB UI presented the results of its research entitled "The Impact of Tokopedia on the Indonesian Economy." There are three research methods carried out, Inter Regional Input Output (seeing economic ties between regions), Location Quotient (detecting what products provide the most benefits by region), and a survey of 12.683 respondents, consisting of 2.677 merchant and 10.006 consumers.

The survey was conducted this year using internal data from Tokopedia last year. "From this method, we found various results. We designed the survey in 2019, then Tokopedia distributed the survey to the merchant and consumers with their systems," said Kiki Verico, Deputy Director of LPEM FEB UI.

The findings obtained, of which there are 6,4 million merchant join those who start and develop their business through Tokopedia. Last year, the figure was 5 million merchant. 86,55% merchant are new traders and 94% are included in the ultra micro category (sales with a turnover of under IDR 100 million per year).

Then 46,3% previously worked as employees and 38,6% of sellers at Tokopedia were producers, producing products independently. This producer uses local raw materials (77,4%).

"In terms of economic empowerment, Tokopedia was able to increase its sales by 22%. Some areas outside Java even had a very significant increase. For example, Gorontalo reached 55,09%, Jambi 41,88%, North Sumatra 36,67%, East Kalimantan 35,71%, Lampung 34,27 percent," said Kiki.

Transactions also occur across Indonesia's borders. Nearly 90% of transactions occur in Eastern Indonesia, coming from the West (56%), and Central (33%). Meanwhile, transactions in Central Indonesia came from the West (54%) and the East (11%). This finding means that sellers in Eastern Indonesia can now reach buyers as far as the western tip of Indonesia, and vice versa.

Other findings show that Tokopedia provides opportunities for merchant SMEs in the regions can buy raw materials for production at lower prices. Most of them are outside Java, including Bengkulu (54,5%), Southeast Sulawesi (53,85%), Gorontalo (46,15%), NTB (46,15%), and Maluku (45,45). %).

The number of jobs recorded in this research created 857 thousand new jobs. 309 thousand of them make Tokopedia their main source of income. It is estimated that the number will increase to 1,13 million jobs this year.

Regarding the economic contribution figures from Tokopedia to GDP, there are indeed differences in how to calculate them. The estimated figure from LPEM FEB UI, GMV Tokopedia last year was Rp. 58 trillion and this year is Rp. 170 trillion. Meanwhile, Tokopedia itself stated that its contribution (as seen from GMV) last year was Rp. 73 trillion and this year it is estimated to reach Rp. 222 trillion.

"Rp222 trillion is a direct figure from Tokopedia. If you calculate it with filtering, the result is approximately Rp. 170 trillion. Filtering it's a number that really represents domestic demands."

As of last year, there were more than 90 million active users visiting Tokopedia every month. The total number of employees is now in the range of 5 thousand people.

Tokopedia's closest competitor, Bukalapak, previously announced estimated GMV this year, it reached $5 billion (more than 70 trillion Rupiah) with more than 2 million transactions per day. This figure is up from last year's achievement as stated by Bukalapak's Co-Founder & President M. Fajrin Rasyid of $3,2 billion (around 48 trillion Rupiah).