Radius Takes a “Quick Commerce” Approach for Markets Outside Jakarta

Quick commerce is the next era of industry E-commerce which is currently busy in Indonesia. There are already several startups that are serious about this segment, but most of them are targeting the city of Jakarta as a test point. Radius tries to take another perspective by targeting non-Jakarta big cities so that digital solutions are evenly distributed throughout the region.

This startup was founded by three old friends, namely Ivan Darmawan, Stephanie Wongsoredjo, and Chryssia Natalia. All three have industrial-related backgrounds E-commerce. Ivan, for example, has deep experience in the FMCG industry handling distribution, warehousing and other related matters, and has been a senior staff at Traveloka and Grab.

As for Stephanie, she has deep experience in operations and business expansion while running her family business in the retail entertainment industry. Meanwhile, Chryssia serves as CTO thanks to her experience working in a global IT company as a programmer. Now he specifically manages all technological aspects at Radius for warehouse digitization.

In a joint interview DailySocial.idIvan explained that daily shopping needs are still needed despite the pandemic that has lasted more than two years. However, this need can only be met by leaving the house, which is full of risks of contracting Covid-19.

"After we found out why they still chose to leave the house, it turned out that they answered that shopping" groceries in Indonesia it's not yet convenient. If you use the application, the shipping fee can be Rp. 30 thousand for a single order and not to mention the goods arrive within a few hours. We see there is a gap quick commerce come in," he said.

In concept quick commerce, he continued, Radius completely rely on online ordering online via app. Have no presence offline like most shopping stores in general, but take advantage of the presence dark store or better known as a small warehouse that can accommodate all the products sold.

dark store it is located in a strategic location and the right arrangement so that the entire space can be maximized properly. All these efficiencies, according to Ivan, provide an opportunity for companies to maximize services for consumers.

With careful calculations and estimates based on density and other aspects, each dark store capable of serving deliveries within 7-10 km with a duration of 15 minutes. Delivery is carried out by Radius' internal courier.

Interestingly, Radius introduced himself as quick commerce selling dry products (dry goods) of the everyday brands that Indonesians usually use. Stephanie added, based on the company's research results, it was found that dry food it's got a stale percentage (spoiled food) by 0,1% than fresh products with a percentage of 30%.

This is because fresh products require a refrigerated warehouse which is certainly more challenging to store in order to keep them fresh. According to Ivan, this strategy also sharpens the target of Radius users, namely: mass market who are looking for weekly to monthly shopping needs, not just an emergency as the community's initial perception of the solution quick commerce.

Currently, Radius sells daily necessities, ranging from basic needs, instant food, snacks, household items, cosmetics and personal care, milk and processed products, beverages, and children's needs.

Focus on expansion outside Jakarta

Another differentiation that makes Radius stand out from other similar players is playing ke tier two city outside Jakarta. Ivan explained that in big cities such as Semarang, Solo, or Medan, they are actually ready to accept solutions quick commerce it's just that there are no players present to provide.

As a result, they have to keep shopping at the store offline to meet their weekly and monthly needs. Even for market education in non-Jakarta, Ivan admitted that there are no special challenges considering that the majority of the population of this big city are familiar with e-commerce applications for online shopping.

"There demandit's unbelievably big, but supplyit's hard. So it is very relevant for us to be present outside Jakarta. Because we want there to be an even distribution of digital solutions in Indonesia, because Indonesia is not only Jakarta."

As of now, the company has three dark store which are located in Tangerang, Semarang, and Solo. The company will aggressively enter second-tier big cities throughout Indonesia this year with a target of opening one to three dark store every week. If calculated, at least Radius will have hundreds dark store until the end of 2022.

Radius's aggressive expansion is also supported by the company's strategy that simplifies the expansion process. Claimed one dark store can operate within two days. This can be achieved because it is supported by a team that has been trained, digital technology, and methods of taking products directly from principal partners.

Not only that, the company also plans to continue to add product categories so that users have more choices when shopping. All of these plans will later be supported by funding that is said to be being raised by the company. Radius received funding of $500 from Y Combinator, after being selected in batch Winter 2022 which has lasted until next March.

Industry quick commerce

India is the closest example for implementation quick commerce. According to reports “Quick Commerce: A $5 billion market by 2025” launched by RedSeer reveals, market penetration quick commerce estimated to reach $0,3 billion in 2021 and will grow 10x-15x over the next five years to $5 billion.

In the report, quick commerce defined as delivery of consumables within 45 minutes at normal shipping costs. The driving factor is none other than the increasing adoption between convenience-seeking customers and unplanned customer behavior; increased customer affinity online with Gen-Z; and changes in consumer behavior triggered by Covid-19.

Quote from other sources, quick commerce become the third generation of the industry E-commerce which continues to evolve. Its presence has full impact on the logistics industry as it offers fast delivery, localized delivery, optimizing delivery last mile, smaller warehouse, fast packing and stock real-time.

In Indonesia, players quick commerce began to appear, including, Astro, Bananas, and Dropezy. Beyond that, similar solutions are considered by various e-commerce companies, including: online groceries those who offer delivery can arrive within 1-2 hours of what should be pre-order one day before.