SiCepat Accelerates Business Growth in 2021, Strengthens the Ecosystem in the "Food Delivery" Business

Throughout 2020, SiCepat Ekspres recorded transactions of IDR 3,5 trillion, up 194% compared to 2019 with a total delivery of 180 million packages throughout Indonesia. This logistics startup also recorded more than 1.655 service coverage points for the Greater Jakarta-Bandung area.

This year, SiCepat will almost double its growth with a total delivery target of 336 million packages and plans to expand its service coverage to a wider area throughout Indonesia. SiCepat will also enter into new business in the segment food delivery.

The expansion plan is likely to be strengthened by the funding it has just obtained. In December 2020, SiCepat was reported to have received Series B-II funding amounting to $50 million or approximately IDR712 billion from Praus Company, a Hong Kong-based company.

Based on Accounting and Corporate Regulatory Authority data collected by VentureCap Insights, as reported by Tech In Asia, SiCepat's total valuation reached $736 million or IDR 10,4 trillion. It was also stated that Praus Company bought 8,3% of SiCepat shares as part of the investment.

How does SiCepat see logistics growth opportunities in 2021? Below is the interview DailySocial with SiCepat Chief Marketing Officer (CMO) Wiwin Dewi Herawati and Chief Commercial Officer (CCO) Imam Sedayu.

Business map in 2021

As one of the logistics players last mile, SiCepat is also enjoying the acceleration that occurred due to the Covid-19 pandemic. Refer to the report The 2nd Series Industry Roundtable: Logistics Industry Perspective by MarkPlus Inc in October 2020, the frequency of courier services increased rapidly during the pandemic, which was triggered by a number of main factors, such as online shopping, prices and delivery times.

By looking at the current development of the situation in Indonesia, Imam Sedayu admitted that he was optimistic that the logistics industry would be better than the previous year. This is based on a number of factors, starting from improvements in people's purchasing power post-pandemic, changes in purchasing behavior, and accelerated digitalization.

"These things will create vertical opportunities, namely various types of services to accommodate community needs, such as groceries, food, and medicine. "From a horizontal perspective, there is an opportunity for growth in logistics needs that are not only concentrated on the island of Java, but outside Java," he explained.

To anticipate the above needs, said Imam, SiCepat will focus on a number of services. First, SiCepat will develop same day service and instant food delivery. For same day service, This service can now be used on customer B2B and e-commerce via API integration.

Second, SiCepat will strengthen its service base last mile with affordable prices, such as Gokil and Halu. Gokil is a delivery service for goods with a minimum weight of 10 kg. Meanwhile, Halu is a delivery service that costs IDR 5.000 and is available on e-commerce.

SiCepat will also expand network points drop-off to make it more easily accessible to consumers throughout Indonesia. Some time ago, SiCepat hooked up PT Logitek Digital Nusantara to expand its network first mile, middle mile, to last mile. Currently, SiCepat is available in 1.600 Alfamart networks in Jabodetabek Bandung and more than 1.000 Fastpay networks.

The plan is that the company will open a network [drop-off] Alfamart throughout Indonesia this April. The party targets more than 15.000 networks to be integrated through this strategy.

"We continue to innovate in terms of technology and working process by doing a lot automation in all sectors. In customer service, we have developed services order pickup via WhatsApp Business SiCepatKlik and SiCepat Ekspres Apps," said Imam.

Expansion to food delivery

SiCepat's efforts to enter the segment food delivery is one of the plans that is quite anticipated this year. The reason is, SiCepat started to move quickly with acquired 51% shares of DigiResto through share purchase or signing conditional share subscription agreement (CSSA) in early 2021.

Previously, SiCepat first entered DigiResto through collaboration with logistics solutions and delivery service providers last mile in December 2020. DigiResto is a platform food delivery under the auspices of PT M Cash Integration Tbk (MCAS) which is also a subsidiary of PT Digital Maxima Kharisma (DMK).

Wiwin admitted that the acquisition of DigiResto was a strategic step for the company to develop its business line food delivery SiCepat. Moreover, DigiResto is considered to meet the SiCepat criteria technologically, namely having its own application and being supported by the WhatsApp Business channel.

Apart from that, DigiResto has also been integrated with three main ecosystems, namely multi delivery third party logistics or 3PL (SiCepat, Gojek, Grab, and Gowes), multi-merchant (restaurant and SME segment) and multipayment (ShopeePay, OVO, Bank Mandiri, and other banking methods).

"We hope that DigiResto can provide new opportunities for service innovation that can bring us closer to consumers, SMEs and merchant, especially those operating in the F&B sector," said Wiwin.

With SiCepat's full involvement in the future development of DigiResto, it can provide more input for logistics services, food merchants, to user experience.

SiCepat will compete with other digital platforms that are starting to enter the business food delivery since the last few years. Quoting Momentum Works research results, service GMV food delivery accelerated growth during the pandemic.

This report notes that the GMV of food delivery services in six countries in Southeast Asia reached $11,9 billion in 2020. For the Indonesian market alone, the figure reached $3,7 billion or the equivalent of IDR 52 trillion, dominated by two large players, namely Grab and Gojek with respective portions of 53% and 47% of the total market share.

Collaboration opportunities from merger efforts Gojek-Tokopedia

Furthermore, Wiwin also highlighted the meaning of the merger plan Gojek and Tokopedia towards the Indonesian logistics industry. Wiwin revealed that this consolidation action could open up opportunities for greater collaboration in the logistics sector which could strengthen the digital ecosystem.

Especially, Gojek has a strong position in the eyes of consumers in its instant delivery service which has also been integrated in a number of companies marketplace big ones, such as Tokopedia, Bukalapak, and Shopee. Gojek also expanding its scope with other logistics startups, such as Paxel.

"Gojek have strong proposition pada instant intracity delivery and SiCepat on express delivery. I think, if these plans are realized, the opportunities for logistics collaboration between 3PLs will be even greater, in particular marketplaces, good at first mile, middle mileand last mile," explained Wiwin.

Previously, General Chair of the Indonesian Logistics Association (ALI) Zaldy Ilham Masita predicted the merger plan Gojek and Tokopedia can have a tremendous impact on the Indonesian logistics industry. One of those that will be significantly impacted is conventional logistics companies that are not yet willing to change their business models.

Apart from that, Zaldy also estimates that the growth of the logistics business in 2021 will be largely boosted by services same day delivery. New business models are also predicted to emerge more and more because many new markets are not yet open, for example food delivery services.