The Impact of the Covid-19 Pandemic for a Number of Startups in Indonesia

Government advice to work from home and implement social distancing related to deployment Covid-19, especially in Jakarta, seems to have an influence on the three startups centaur Indonesia, namely Blibli.com, Modalku, and TaniHub Group.

TaniHub Group CEO Ivan Arie Sustiawan said, service E-commerce This agricultural product has experienced an increase in users so that now the number reaches more than 20.000. The increase also boosted order transactions by around 15-20 percent.

Not only selling fruit, vegetables, and agricultural products, high demand also occurs for herbal plant products and other products that are useful for increasing the body's immunity.

In anticipating this surge in demand, he said, TaniHub implemented several new policies related to: food soft to protect the safety and health of employees, partners and customers without compromising the level of service. Procedure food soft This has actually been carried out since the beginning of the TaniHub Group.

Plan evaluation Capex

On the other hand, due to the uncertainty of the current situation, TaniHub is re-evaluating its entire capital use plan (capex - capital expenditures) which are currently or have not been implemented in 2020. According to him, this step was taken so that TaniHub can focus more on investments that have a direct impact on the availability of products to the public.

"So, we allocated Capex to increase our inventory capacity, infrastructure, and increase our delivery fleet," he added DailySocial.

The same phenomenon occurs at Blibli.com. Marketplace which was established in 2010 experienced a surge in transactions for certain products such as hand sanitizers, health products, and fresh food. In fact, after the government announced an advisory to work from home, its services experienced a significant surge in transactions on products utilities, cooking oil, milk, and baby food.

"Since the first COVID-19 case occurred in China, Blibli has anticipated by compiling several business scenarios with consideration if this case enters Indonesia," said Blibli.com CEO Kusumo Martanto to DailySocial.

One of the business scenarios in question includes determining business focus and allocation of funds for business development in 2020. According to him, the call for doing social distancing considered to have an effect on how the company allocates marketing spending.

If initially allocated to company activities in normal situations, this allocation will later be used according to the needs of current conditions in Indonesia.

"So far, Blibli has not revised our business targets for 2020," he said.

For now, he continued, Blibli is focused on adjusting operational services according to current conditions. Some of the strategies are contactless delivery (contactless shipping) where Blibli Express Service (BES) couriers are required to wear masks and gloves when sending goods. This procedure is applied to all Blibli logistics partners.

Then, his party also strives to maintain product availability by carrying out stock restriction procedures for merchant partners. In accordance with the government's advice, this strategy is carried out to avoid irresponsible parties from hoarding goods.

Starting to affect lending

On the other hand, WFH and social distancing impact on P2P business lending belongs to Modalku. According to the company, a number of borrowers have started applying for rescheduling debt payments. This impact is because Modalku plays in the MSME segment which is quite hit by the current situation.

"However, we will discuss with borrowers to find related solutions to support the sustainable development of the MSME business," said Modalku Co-Founder and CEO Reynold Wijaya in a statement to DailySocial.

Startups centaur is currently preparing a number of mitigation measures, such as making adjustments in lending, either limit and loan tenor. Then, conduct a more comprehensive selection of prospective borrowers and borrowers existing.

It also guarantees to continue to apply the principle of "responsible lending"by assessing the borrower's financial ability to repay the loan.

"Regarding the target revision, we are still conducting internal discussions considering that currently we are still focused on supporting MSMEs whose businesses are affected by Covid-19," he added.

As of March 2020, Modalku has disbursed 1.750.506 loans totaling Rp13,49 trillion. default rate (default) My capital is around 1,31 percent.

Back to the point of equilibrium

According to VP of Investor Relations & Strategy at BRI Ventures, Markus Liman Rahardja, a situation like this will trigger an imbalance between sectors. Some sectors will be affected by the spread of COVID-19, while other sectors will gain profits.

According to the hypothesis, social distancing will automatically change the way people shop. Especially since the government has appealed to the public to work from home, public spaces have become quiet. The government has also begun to close tourist areas in a number of areas.

"In that case, service E-commerce and online healthcare will go up. On the other hand, OTA players will hard hits Karena travel bans. Fortunately, some player don't play in one vertical, so other business verticals can compensate. Hopefully, one or two quarters the situation will return to the equilibrium point," he explained to DailySocial some time ago.

Previously, a giant VC firm Sequoia Capital has warned that the spread of COVID-19 will have a turbulent effect on the business and investment climate in the world's startup industry. Sequoia even called Covid-19 "The Black Swan in 2020".

Sequoia warned the entire startup ecosystem and its derivatives to rethink some aspects of its business this time of year. Some of these important aspects are management and capital expenditure, fundraising, sales prediction, adding employees, increasing productivity, to strategy marketing.

“While it is possible that your business will not be directly affected by this case, you need to anticipate that consumers may change spending habits them,” according to Sequoia.