Traveloka Closes "Online Grocery" Service Operation

Traveloka adds to the list of startups in Indonesia that are efficient in the midst of economic turmoil. Traveloka closes service operations online groceries "Traveloka Mart"Even though it's only been operational for six months.

"We inform you that we will stop the Traveloka Mart service as part of the company's business strategy and priorities," said a Traveloka representative in an official statement.

It ensures that employees, partners, and users remain the main focus to ensure the transition goes well according to applicable regulations. Traveloka will coordinate with related parties to provide support in the process of closing this Traveloka Mart.

For information, Traveloka Mart allows users to buy daily necessities. Meanwhile, Traveloka Mart launched in mid-March 2022 and has collaborated with a number of large retail companies including Lotte Mart.

In addition, Traveloka steps to enter online groceries become a strategy to strengthen its position as a lifestyle super app which focuses on fulfilling a lifestyle, not only as a online travel agencies (OTA) only.

Challenge

Market potential online groceries in Indonesia is still very large considering that its reach is still concentrated in big cities, such as Jabodetabek. Referring to the report The Institute of Grocery Distribution (IGD) Asia, market value online groceries in Southeast Asia is projected to grow by 198% from $99 billion in 2019 to $295 billion in 2023. The growth of online grocery services is mainly accelerated due to the Covid-19 pandemic.

However, online groceries It is considered that there are still major challenges, especially regarding order fulfillment and logistics, even though transactions account for more than 50% of total retail spending in Southeast Asia. The e-Conomy SEA 2020 report states that this challenge can be answered with continuous innovation in business models and logistics infrastructure.

In the context of the platform super app, almost all of them have now provided basic needs services online on-demand. Some of them are GoTo (GoMart), Blibli (Blibli Mart), to Grab (Grabmarts). superapp which is already unicorns/decacorns already has its own logistics infrastructure that can be used to accommodate orders for basic needs. However, of course they will compete with early-stage startups as well as developing ones that offer similar services.

Blibli, for example, has dark store to operate this service more efficiently. Model dark store considered to be able to encourage efficiency and effectiveness because it only accepts online orders and delivery becomes faster without opening it to shop visitors. In addition, they also have a strategic partnership with Ranch Market, through the acquisition of a majority stake.

In analysis DailySocial.id related to business turmoil quick commerce Globally, AC Ventures Co-founder and Managing Partner Adrian Li assessed that, compared to existing retail models, quick commerce it shows a significant increase in sales results and cost efficiency.

However, Venture Capitalist Eddi Danusaputro emphasized that infrastructure online Grocery Modern technology is actually needed in second-tier cities, considering that supply and demand in first-tier cities are already strong. The business model will feasible, but it needs to be changed because the infrastructure in tier 2, 3, and so on is not necessarily the same.