Tokopedia is connecting Indonesia’s mom-and-pop shops to technology

Mitra Tokopedia is an app that enables individuals and shop owners such as grocery stores and warung (stalls), to sell digital products such as electricity tokens, phone credit, BPJS payments (healthcare and social security). The app also provides wholesale services of goods, and gives merchants access to hundreds of SKUs, and provide affordable delivery by one of the company’s distribution partners. The company sees itself as a bridge between the offline mom-and-pop world and the online world.

Mom-and-pop shops in Indonesia or warungs account for almost 60% of the country’s gross domestic product and 97% of its domestic employment. They also provide essential services such as mobile top-up, and access to consumer products. Warung owners are usually the main breadwinners of their families, and their success has an impact on the larger community. Traditionally, most warungs rely on offline wholesalers for supply, but shop owners face many supply chain difficulties, ranging from stockouts to late deliveries. Tokopedia’s mission is not to replace traditional traders, but to work with them and connect them to the digital economy.

Many small to medium-sized enterprises are moving online, which could assist Indonesia in its road to recovery from Covid-19. According to research conducted by the University of Indonesia with Tokopedia, online selling not only revived pandemic-affected businesses but has also helped many sellers who in the past exclusively traded offline. As many as seven out of ten sellers on Tokopedia’s merchant platform managed to increase their sales volume by more than 100%. The pandemic increased the adoption rate and has pushed many mom-and-pop stores to start trading online.

Connecting offline and online markets initially presented some difficulties. Digital literacy remains one of the biggest challenges. Mitra Tokopedia’s approach is to educate small businesses slowly yet continuously. Mitra Tokopedia doesn’t only rely on technology but also provides boots-on-the-ground or human interaction in the form of a Sobat (or friends in English). The Sobat helps with the onboarding and trains owners on how to use the app and builds long term relationships with shop owners. The app can be installed on the most basic phone to help them make transactions. They also support merchants with a new bookkeeping integration on the app, which helps them optimise inventory purchases and provide customers insights to make better purchase decisions.

Based on a survey Tokopedia conducted with users, more than 25% of respondents said they have more time now to spend with their family, thanks to reduced travel and meeting time with agents or wholesalers to purchase products. They also reported higher savings rates and lower inventory costs.

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