Tokopedia president on IPO plans, future business strategies

Indonesia’s largest ecommerce platform Tokopedia is entering its second decade. On its 10th anniversary, the firm expressed interest to become a “super ecosystem” for local customers and businesses.

According to recent research by the University of Indonesia’s economic and social research institute, Tokopedia is projected to contribute US$12 billion to the Indonesian economy this year, factoring in transaction value, number of jobs created, and the rise in sellers’ income throughout the country.

Photo credit: Tokopedia

The company recently made headlines when its co-founder and CEO William Tanuwijaya announced plans to go public within the next few years. This has been generally well-received by the public and analysts, considering that the company has been proving its positive track record in Indonesia’s digital economy. In fact, this move is expected to pave the way for other tech companies to follow suit.

KrAsia recently sat down with Tokopedia’s president, Patrick Cao, to discuss the company’s business strategies and the details of its preparation for an initial public offering.

William has publicly said that Tokopedia will focus on going local rather than emulating its peers by going international. Can you please elaborate on this?

Small and medium-sized enterprises are the backbone of the Indonesian economy. Today, there are more than 60 million SMEs in the country, and we contributed by empowering 6.6 million of them as of last month. Not only have we helped existing SMEs, but we have also created new batches of entrepreneurs with our platform. According to recent research by the University of Indonesia, Tokopedia has created 857,000 new jobs for active sellers residing from Aceh to Papua, which is equivalent to 10.3% of total new jobs for Indonesia in 2018.

We currently have 350,000 mom-and-pop shop partners, which we call mitra. We leverage our technology and platform to provide value-added services to them. For instance, we help them to restock their inventory faster through the Grosir feature, and we have provided them with working capital so they can purchase more (inventory) faster too. We designed the Mitra Tokopedia app simply so that they can grasp it quickly. After one year, the app has been downloaded by over 2 million Android users.

At the same time, we also helped build better infrastructure with technology, especially around logistics and fulfillment, also leveraging on technology to get the goods closer to shop owners as they can even choose to become a pick-up or drop-off point. It creates a more level playing field, provides equal access to goods and services, and is therefore a new business opportunity for them.

Do you work with local governments for that?

Yes, we are aware that customers in small villages have different needs and preferences than those from Jakarta, so we personalized our services for them.

In terms of SMEs, we have Tokopedia Centers spread across various villages and districts. A Tokopedia Center is a digital learning and experience center where SMEs can learn how to be a merchant, how to use the app, make online-to-offline transactions, use digital payments and financial services, and more.

Most recently, we collaborated with the West Java government to expand access of empowerment to the rural community through various initiatives, one of which was opening a Tokopedia Center in a small village called Sukanagara. You’ll see us launch a significant number of centers within the next two years.

Is it true that the company also plans to export products from Tokopedia’s merchants?