The Future of "On Demand" Service Provider Platforms in Indonesia

One of the technology sectors that is experiencing slow growth and lacks funding is service technology or handyman services. Though his presence it has been started since 2015, until now there has been no leading player who has managed to dominate. GoLife, fronted Gojek, even resigned this year.

DailySocial trying to find out the challenges, difficulties and future of service and handyman services in Indonesia and how each startup implements strategies to survive.

GoLife closing effect

Closing GoLife Overall, July 2020 was a defining moment for the potential and opportunities of this sector. Even though it had experienced prosperous times, GoLife's services, which include cleaning services, massage services, repair services, laundry services, beauty services, etc., were apparently unable to survive despite the support of its partner network and ecosystem area coverage. Gojek broad. One of the main factors in closing this service is the presence of the pandemic since the beginning of this year.

On the other hand, the closure of GoLife provides new opportunities for growth of other platforms.

Founder & CEO Help Indonesia Melia Lustojoputro revealed that when the new pandemic broke out there was a significant decrease in orders. They then try to provide protection to partners helper and clients from the worst possibility, so screening is carried out order and create new SOPs.

"The closure of GoLife had a positive effect with an increase in orders on the Help application. But many of our partners also held back and did not take orders order. So we created a new policy, where we rely on only a subset of selected partners to consistently take order and do it," said Melia.

The Executive Director expressed the same thing Cleaner Ranti Sabina. The platform claims to get a number of new customers and partners who were previously registered as GoLife partners.

"Some of our new partners come from former GoLife partners. This has proven that interest in this service is actually quite large. The biggest challenge is more about maintaining quality and monitoring from the service," said Sabina.

On the other hand, service Clean & Fix which is offered Grab and Sejasa is still active. Clean & Fix is ​​the result of a hypothesis carried out Grab after pilot project with Sejasa in December 2018. Before Clean & Fix officially arrived at the end of 2019, Grab enter Sejasa in the form widget on the main page of the application Grab.

Budget and expansion

Even though there are several platforms that provide services outside the capital area, most of them still limit their services to Jakarta and its surroundings. From an investor's point of view, one of the reasons for the limited service areas reached by service platforms and craftsmen in Indonesia is vulnerable economic units.

According to Managing Partner Indogen Capital Chandra Firmanto, typical service marketplace services tend to be very hyperlocal and lacking scalable. They cannot take advantage of pre-existing supply and demand in one market to attract users in new markets. When they come to a new market, they need to get all the customers from scratch.

The effect is that customer acquisition in one city will be very different from other cities in Indonesia. The uncertainty of Customer Acquisition Cost (CAC) often puts this model at a disadvantage when starting to enter new markets.

"We see this as one of the big challenges that startup founders have to face. At Indogen Capital, we are very proud to have connections to help startups penetrate mid-tier and third-tier cities which will ultimately be the differentiator in winning the entire Indonesian market," Chandra said.

The CMO expressed the same thing RenovFun Indra Setiawan. According to him, the main challenge in expanding the service area is the operational budget. RenovAsik currently only operates in Jabodetabek, because expanding to other cities requires quite large costs for offices, marketing activities, team recruitment and infrastructure.

"The most important thing is human resources, because RenovAsik puts it first Quality Control from internal company to clients. "To ensure that the performance of the foreman/workman in the field is in accordance with what the client wants," said Indra.

Yoofix is ​​a service startup based in Yogyakarta. Now they are expanding services in Jabodetabek, Bandung, and are currently in progress piloting in Surabaya. According to Founder & CEO Yoofix Dian Bilhokista, actually every city has its own local platform, but there are still very few of them that have services in several different cities.

"The most common challenge is the difference in SOP and culture in each city. You must have a special method for each city, both to invite partners to join and to get customers," said Dian.

Meanwhile, TukangBersih focuses on the field house keeping and men-deliver Some of its services via applications and web are currently available in big cities in Java and Bali.

"Demand from users is clearly very large. This is proven by the higher increase order from day to day. "Our biggest challenge is to screen and train quality talent so that it complies with TukangBersih's standards," said Sabina.

Partner management

Conventionally, there are currently many service providers like this, but when entering the online realm, requirements and criteria must be met by each platform.

"To find out whether the partner has attitude and skill The good ones can't be answered in one interview. "For us, we have to immediately jump into handling new projects," said Indra.

Problem attitude and skill Melia also underlined. According to him, when the recruitment process is carried out to meet user needs, a potential partner must go through specified stages before being deemed worthy of joining.

"Usually out of 100 people who register, only 30% attend. So we have to carry out training many times, which of course requires a lot of funds," said Melia.

Meanwhile, according to Dian, the biggest challenge when carrying out the partner recruitment process is finding partners who match the culture and values ​​built by the company, namely that they must have the ability (hard skills) and honest.

Future potential in Indonesia

Towards the end of 2020 the number of services and craftsmen in Indonesia is increasing. However, no one has yet dominated the service and only a few have received fresh funds from investors.

"The service business is of course about how we provide services that satisfy customers, so in line with that it increases demand will also happen," said Dian.

Sabrina expressed similar optimism. Through TukangBersih, he sees that the cleaning service business will shine even brighter in the future. This is because of the millennial culture that likes service-based services on demand which is easier and more practical and equipped with a system monitoring.

"There are also many requests from other platforms to collaborate, such as with J.D. Life and several other platforms. This is a good sign that this service is really needed and available demand big one," said Sabina.

Investors have a more cautious view. As an investor, according to Chandra, he currently does not see any plans to invest in services and craftsmen in Indonesia. He argued that there were still challenges in very thin margins and it was quite difficult to improve. He sees that in the future the demand for services will definitely remain, but as an investor he wants to see how the founders can build it into a viable business scalable.

“There are ways to make it more scalable, and we're eager to see what founders can do to address those issues," Chandra said.