SoftBank-backed Tokopedia bet in terms of logistics, AI, of Indonesia’s growth

JAKARTA (Reuters) – the Indonesian e-commerce unicorn, Tokopedia is an investment in two logistics companies, and with the help of artificial intelligence to predict buying behaviour, as part of an effort to increase the speed of the delivery-and-slash shipping costs, the world’s largest archipelago.

The founder and chief executive officer of the Indonesian e-commerce company, Tokopedia, William Tanuwijaya, to pose for a photo in Tokopedia’s headquarters in Jakarta, Indonesia, on 25 July 2019. Photo of July 25, 2019. REUTERS/Willy Kurniawan

Tokopedia’s founder and chief executive, William Tanuwijaya said the company is in final talks to invest in, an agritech startup, is working together with the farmers, and the purchase of stakes in smaller markets with a broad range of services to a second-hand mobile phones.

“Our customers in Tokopedia, it is in a position to buy directly from the farmers and the fishermen,” Tanuwijaya told Reuters in an interview.

Tanuwijaya expected, Tokopedia, to raise the proportion of same-day deliveries to 95% from the current 65%, while cutting costs for merchants, a country of 17,000 islands, where the costs can be exorbitant.

Backed by $2 billion in funding from investors, including SoftBank Group, Corp, is the Vision of the Fund and Alibaba, Tokopedia is committed to the creation of a “super-ecosystem”, with a wide range of services, including borrowing, lending, and payment services for both consumers and retailers.

In contrast to rivals such as the home-grown Bukalapak, local e-commerce retailer Lazada, owned by Alibaba and Singapore-based Shoppee, Tokopedia, it is strictly a market place and does not hold any inventory in its own warehouses.

South-east Asia’s largest economy, driven by a young and increasingly online-savvy population of around 260 million euros, is among the world’s fast-growing e-commerce market.

E-commerce sales totaled $12.2 billion last year and are set to hit $53 billion by the year 2025, according to the end of 2018, a study by Google and the Temasek Holdings.

While Tokopedia, which is named after the Indonesian word for “save”, and not provide annual revenue information for the 6 million merchants, of sale, in May, during the Muslim fasting month of Ramadan hit a record of $1.3 billion.

Tanuwijaya declined to say when Tokopedia would be cost-effective to make, having regard to the current focus on expansion, but said, “it’s not really a need to outside investors for more…or to have to raise capital just to sustain our business”.

Tanuwijaya, from the town of Pematang Siantar in Sumatra island, a place he says is “a mall”. Tokopedia claims to be approximately 90 million monthly active users.

Now, Tokopedia is taking a page out of the playbook of the US and Chinese tech giants, and the tombs of its troves of data to the client, and to assist in the prediction of the behavior of the consumer.

With the AI, Tokopedia suppliers are now in “near-real-time data to make predictions on the demand of the consumers in the towns, cities and regions, Tanuwijaya said. For a fee, Tokopedia will help to make their property in advance of the acquisition of partner warehouses throughout the country.

“Less than 1% of the indonesian economy is already the case in Tokopedia,” Tanuwijaya said. “We want to make it 5 percent of the time.”

Reporting Fanny Potkin & Ed Davies; Editing by Jonathan Weber and Muralikumar Anantharaman

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