Cosmart's Tips to Get Market's Attention Amid Economic Challenges

Early this month startup e-commerce membership "Cosmart" officially launches its presence in Indonesia through initial funding for $5 million. Cosmart was only founded in the second quarter of this year, but its presence has garnered some attention because it intersects with the world E-commerce and e-grocery.

This is because digital startups are generally faced with macroeconomic challenges that force them to perform a number of efficiencies. Not to mention, player e-grocery lately also have to re-adapt, especially those who are engaged in services quick commerce, with pivot to stay afloat for failing to find an economic unit.

For the record, Cosmart positions itself as one stop solution for consumers who want to buy monthly necessities. By paying a membership fee, consumers can get access to high-quality products at lower prices, claimed to be unable to find products on the platform E-commerce others, and the opportunity to try sample products from new brands.

So what is Cosmart's strategy to remain prominent in the midst of these challenges? In discussing this topic further, edition #TuesdayStartup this time invited Co-founder & CEO of Cosmart Alvin Kumarga as a speaker.

Have a solution for a valid problem

Alvin explained, in the midst of this challenge, there are always two sides that can be seen. On the plus side, there are opportunities that startups can solve. Especially for Cosmart, the need for routine shopping for households has always existed and must always be fulfilled because of its important function.

The initial idea he pioneered Cosmomart came from his personal experience when he had to shop everyday on the platform e-commerce. Each shop did not have a complete item so he had to look in more than one shop. Not to mention the discount promos and shipping costs offered by each store are different, which must be optimized manually.

He also conducted more in-depth research related to this industry in Indonesia. It was found that the player E-commerce the current one does not have a product-specific solution consumer goods. If anything, the solution is still in the early stages.

Even from a kind of player e-grocery, the majority focus on the convenience side, starting from the side of instant delivery and good selection of goods. Just talking about the potential, of course spending a day on the platform online still so minimal from the total national retail spending.

“But the price of convenience it is the price of the more expensive goods. So far no one is playing in value brands, even though the Indonesian people are very happy with the cheap price. We believe we can tackle market and finally Cosmomart was born,” he said.

From the target consumer of Cosmart, it is also different, continued Alvin, namely a family that has more than three members in the house. Hence, the price factor is so essential for this group. The greater the savings, the funds can be allocated for other needs.

By paying for a membership, users can save more expenses to meet the monthly needs that must be met. Therefore, the issue for consumers in this segment is not about fast delivery, but how much they can save.

However, for Alvin, paying membership is not a tool to solve the problem that Cosmart wants to solve, but rather for the company's main source of income. "Revenue from the sale of goods usually the margin is not large, but because we pass on cost savings what we get for consumers [cooperation with principals], then revenue what we get is from membership.”

Shopping offline still needed

Even so, Alvin does not deny that shopping is still needed offline in the midst of this digitalization. Experience offered from shopping offline richer because consumers can directly see and touch products that prioritize this, such as buying vegetables and fruits. These two ways of shopping are predicted to continue to complement each other.

“What we are aiming for is not moving from offline purchases ke online because I believe in shopping offline ada benefitsit's for eye wash. But is regular shampoo shopping still fun? Maybe not, that's why we try to help with this routine shopping."

With this hypothesis and proven by initial tests in the market, it has succeeded in convincing investors to believe in Cosmart's business model. That there are real issues and business models through membership to ensure Cosmart continues to grow.

"Want to tech winter or not, there must be market needs and point bread that clear, so is business model clear. When everything is there we can pitching to investors."

In the midst of uncertain global macroeconomic expectations, investors have become more strict and disciplined when investing their funds. For startups this is a challenge to prove the hypothesis is true or not. "We with this team focus on solving consumer problems and if this business model is successful, it can betackle, " he concluded.