To get rural residents shopping online, a helping hand is needed

Photo credit: Eko Susanto.

A new breed of startups are trying to crack rural ecommerce in Southeast Asia.

From Cambodia to the Philippines, it’s a problem for ecommerce companies that most people aren’t familiar with the tools that would let them shop online.

First of all, they need a bank account to make payments. In Indonesia, more than half of the population over the age of 15 don’t have one. As a result, less than 1 percent of Indonesians shop online.

That’s a missed opportunity, especially for people living in remote areas. The variety of products available to them is very limited. Goods that do make it there tend to be more expensive than in cities.

Agung Nugroho wants to solve that problem by working with small-town shopkeepers and turning them into “agents” that help others make online purchases. He’s the co-founder and now COO of an app called Kudo.

See: How a new breed of startups is cracking rural ecommerce in Asia.

Bridging the trust gap

Kudo aggregates products from a number of ecommerce stores. Kudo agents, who typically sit in small mom-and pop stores in rural Indonesia, install the app to sell a wider variety of goods without having to stock them.

They help customers who come to them pick items from the app’s product channels, place an order, and take cash in return.

Kudo’s network of agents grew from just hundreds in May last year to over 100,000.

“50 percent of our agents are on the island of Java, while the remaining 50 percent are spread across the other provinces, from Aceh to Papua,” explains Agung. Java is Indonesia’s most populous island, containing over half of the nation’s citizens.

Kudo’s transactions now amount to millions of dollars a month.

Agung says the human factor helps remove doubts about online shopping.

“Maybe you don’t trust the online seller, but you would definitely trust the owner of the small shop next to your house, who happens to be a Kudo agent,” Agung explains.

Changing track