Commerce Empowers Rural Digital Economy through Trade

Digital growth should be felt equally by all levels of Indonesian society. It's just that this fact is not as easy as turning the palm of the hand. At least that's how Ryan Manafe and his two friends, Willy Chandra and Adi Wismaya, felt before they decided to start a startup. social commerceTrade.

Initially, Ryan had dreamed of becoming a civil servant, the same dream as his friends and most Magelang people. There is a police school in the city which is always flooded with fans from all over Indonesia. In the end, this dream is just wishful thinking. Instead, he started his career working in a renewable energy company, moving into villages that had no electricity. It was there that he met Willy and Wismaya.

"I see it seems that when the electricity is on in the village, it doesn't mean electricity is finished" game changer, the economy in the village immediately improved. There are other factors, even in areas that have electricity, it does not necessarily advance [the economy] immediately. It turns out that the problem is with access and there are various forms of access," Ryan said DailySocial.id.

Ryan continued, one of the most basic accesses before entering health and education is basic needs. They have to travel a long time to shop at markets which are usually located in cities. Even when you want to resell it in your local area, the selling price becomes expensive, making it difficult to compete. This issue ultimately became the forerunner to the birth of Dagangan in 2019.

"The idea is simple, because in big cities many startups are born, but I don't think there's much of a problem Painful even made it app-his. Meanwhile in the village no one noticed. We are also excited to start Trading. Of the three of us, we added Estrada [Andhika Estrada] and Willy [Willy Chandra] to team-up. "

Each co-founder have backgrounds that support each other in Trading. Ryan (CEO) previously worked at the Presidential Work Unit for Development Supervision and Control (UKP-PPP/UKP4), then co-founded a solar energy company, SUN Energy. Wilson Yanaprasetya (President) previously worked at a private equity firm and was one of the founders of Qerja.

Meanwhile, Willy Chandra (COO) previously worked at the FMCG company P&G, until finally moving on to SUN Energy and meeting Ryan. Then, Andhika Estrada (CTO) joined Agate as co-founder and Adi Wismaya (VP of Business Development) started his career at a consulting company, then continued to SUN Energy.

Trading Solutions

From the start, Trading has been consistent with its mission empowering the village economy with digital solutions. The economic movement in the region is extraordinary, but the lives of the people are still very conventional. Trading adheres to the concept social commerce which provides various household needs with delivery services on the same day and the next day.

What makes Trading different from similar platforms is the use of models hub-and-spoke. What this means is, Dagangan is building a procurement center for basic needs or micro fulfillment center (hub) in second-, third-tier cities and rural areas. The aim is to reduce logistics costs. Consumers can get easier access to goods, producers are also able to reach areas that were previously difficult to reach due to logistical limitations.

“In chain science supply chain leaders, hub-and-spoke that's the concept of ideal distribution. But to do it from theory is not easy. The problem is that the distribution concept in Indonesia is exclusive. For example, Unilever, for distribution to its network, cannot carry other brands."

Ryan continued, because it is exclusive, distributors of this brand directly distribute it to wholesalers, stalls, working sporadically. The results were chaotic because it was not systemised, product penetration from this brand ultimately did not reach grocery stores in rural areas. Merchandise tries to fill this void, actually making the distribution system neater and more organized.

From the merchandise warehouse located inland it will be done hub for distribution of products ordered by shop owners, agents, or resellers. Both in the eyes of the brand holder and the merchandise itself, this type of business model can be said to be more comfortable for both parties. It's different, if Dagangan plays in a big city that is more prone to conflict, there are concerns that cannibalization will occur.

“Just trade cover tiers 3 and 4 in areas that have not beencover by distributors. So, positioning we are more comfortable making producers more open to us.”

Meanwhile, for delivery because it has to go to the village, not many third parties enter that area. As a result, Dagangan is building its network slowly by recruiting local teams and continuously training them to be ready. Even though it is relatively slow, Ryan believes that building a sustainable business is more important and there are no shortcuts.

This concept was first introduced in Ryan's hometown, Magelang. He chose this location because he had a deep understanding of the culture and habits of the local community. Then, enter Sleman, Grabag, Temanggung, Salatiga, Ambarawa. "But growth is fastest in Sleman, that's why we put our head office here. For the West Java area, just us cover in Garut, Tasikmalaya and Ciamis, in East Java then in Madiun."

The strategy that Dagangan takes for its entire business is different from most other startups which focus on new digitalization. One solution that many startups offer is financial recording (bookkeeping). Regarding this matter, Ryan is of the opinion that in the regions the solution that is most needed at the moment is the supply of necessities at low and varied prices, not just about difficult logistical access.

"The varied choices are also an issue, so far their shopping choices have been the same. For example, for the taste of instant noodles, they find it difficult to get them. In the city, maybe the issue is different, the goods have been fulfilled, so the others go to the next stage, namely bookpiece. So maybe there is a need for that.”

It is stated that Dagangan has more than 40 hubs spread across various areas in Yogyakarta, Central Java and West Java. Merchandise products and services have reached almost 15 thousand villages in 40 cities/districts. Then, there are more than 4 thousand SKUs and more than 17 thousand active users out of a total of 100 thousand registered users who utilize the Merchandise solution.

Relations with BTPN Syariah

Another interesting thing about Dagangan is the relationship that has been built since early 2020 between the company and BTPN Syariah, until finally become a strategic investor Traded through BTPN Syariah Ventura's CVC arm. Ryan said, at that time Dagangan did it pilot project to support BTPN Syariah debtors to develop their business through the loans they receive.

Merchandise provides a stock of grocery items in the form of economical packages that can be purchased for later resale by partners in their home environment. Because you sell grocery items, the turnover of money is much faster, only around one to two days. “Because not all BTPN Syariah partners have a business to transfer money. In that area, the easiest business to make money is trading."

The partnership between the two companies continues with API integration, the Dagangan application is connected to the Warung Proper application, which is intended for Laku Pandai agents (called Agen Precise). One of its features is that this application allows agents to purchase individual products at wholesale prices, either for personal needs or for resale.

"When API integration is entered, it means that both of them open their kitchens to each other. "What's interesting is that what is being discussed is not an opportunity but what has happened and is happening [because of API integration], so this investment just confirms and confirms it."

In the future, together with BTPN Syariah, Dagangan will scale up a business that has proven successful since pilot project and double the number of new locations to areas where BTPN Syariah operates. For the record, BTPN Syariah has a base of 6 million customers served and 4,1 million of them are active customers. The banking credit customers being worked on are in the underprivileged group.