Taking Business Efficiency, Shipper Lays Off 65 Employees

Logistics aggregator startup Shipper took the efficiency route by laying off 65 people or representing 8% of its total employees. According to the company, this decision was taken to prepare for future macroeconomic uncertainties.

It did not mention which divisions were affected by this move. In a letter circulating, the layoff decision was taken on December 8, 2022.

Shipper Co-Founder and CEO Phil Opamurataawongse said that this tough decision was part of the company's optimization plan after thoroughly reviewing Shipper's business processes and in line with further anticipation of uncertain macroeconomic conditions in the coming year.

"Today, 8 December 2022, it is with a heavy heart that we regret to announce that Shipper has to part ways with 65 valuable team members or 8% of the total number of employees," said Opamurataawongse in his statement.

He continued, "The company has experienced tremendous growth over the past few years and looks forward to continuing this momentum." However, when planning and reviewing the business as a whole, it turns out that management needs to make decisions to help the company be more agile and accelerate sustainable growth going forward.

Affected employees will receive a compensation package in accordance with the applicable laws and regulations. In addition, the company will extend the validity period of health insurance, offering programs outplacement, and provide support to help employees find new opportunities.

Opamuratawongse concluded, even though this decision was taken, the company remains focused on accelerating the digital transformation of SMEs and supporting the digital economic ecosystem in Indonesia through solutions supply chain leaders integrated.

"We remain optimistic about growth opportunities E-commerce in Indonesia and our position in the logistics sector. We believe, by continuing to work efficiently, the support of transparent and efficient logistics processes will be increasingly needed to support this growth. We will emerge from this global economic challenge more resilient than before," he concluded.

In April 2021, Shipper secured $63 million in Series B funding from DST Global Partners and Sequoia Capital India with the participation of previous investors including Prosus Ventures, Floodgate, Lightspeed, Insignia Ventures, AC Ventures, and Y Combinator.

This large fund seems to contradict the news of layoffs that Shipper must take. Given that during the pandemic, the industry E-commerce and its supporting ecosystem thrives due to high demand.

Citing the 2022 SEA e-Conomy report, sector E-commerce continues to be a major contributor to the digital economy in Indonesia. Its GMV value is estimated at $ 59 billion by 2022. Although offline shopping activities are now starting to revive, the sector E-commerce accounts for 77% of the entire digital economy. Until 2025, sector E-commerce Indonesia is projected to grow with a CAGR of 17% and a GMV value of $95 billion.

Five years Shipper

In October 2022, Shipper celebrated its fifth year. Now the company is not just a logistics aggregator, but also a provider of digital warehousing services. It is claimed, the company has helped more than 35.000 online sellers and hundreds of large-scale companies from various industries.

The third-party logistics aggregator (3PL) technology innovation developed by Shipper is said to have helped MSMEs save up to 20% on shipping costs by optimizing the management of orders and shipping routes, and packing them together with orders to be sent to the same destination.

Thus, inter-island logistics costs can be reduced. This efficiency is certainly needed to help achieve the government's target of reducing logistics costs to Gross Domestic Product (GDP) by up to 17% in 2024.

Shipper has made other cost efficiencies by bringing the location of goods for business actors closer to their market locations through the management of more than 300 smart warehouses spread across 35 cities throughout Indonesia with a total area of ​​500.000 square meters. Six of these warehouses with a total of 10.000 square meters located in Medan, Palembang, Tangerang, Semarang, Surabaya and Makassar can facilitate industrial players who have products to be stored and distributed according to halal standards.

Furthermore, the company presents the Atoor application as an Omnichannel Management System (OCMS) service. This platform makes it easy for businesses to manage sales activities on marketplace in an integrated manner, starting from managing product information by changing product descriptions, revising product prices, uploading product photos, managing orders, to managing inventory stock in one platform.

Since launching in January 2022, Atoor has connected more than 1.500 online stores and helped hundreds of sellers save more time and resources, so they can focus on selling and growing their business.

In terms of empowering MSMEs, Shipper helps MSMEs market their products through the ShipFest program, a solution for MSMEs to be able to maximize the latest sales trends through live selling. Draft live selling is now in vogue because it provides an opportunity for large to small scale businesses to interact directly with buyers and buyers can immediately see the goods being sold.

In this way, new MSME products can compete with products that are already on the market, both foreign and domestic. Shipper also maximizes brand awareness and brand positioning MSMEs by promoting through digital ads collaborated with well-known Key Opinion Leaders (KOL) in Indonesia.