Tokopedia’s next 10 years

William Tanuwijaya and Leontinus Alpha Edison know a thing or two about the pitfalls of living outside of Java, Indonesia’s most populous island and its commercial center.

“In Indonesia, with 17,000 islands, it’s very hard to have equal infrastructure,” said Tanuwijaya, the CEO of ecommerce unicorn Tokopedia, during a fireside chat at the Tech in Asia Conference in Jakarta. He added that in areas outside Java, people usually have to “pay higher prices for a limited selection.”

In 2009 – after two years of fundraising – the pair launched Tokopedia with a mission to democratize commerce and technology throughout Indonesia. Ten years on, the ecommerce platform has 90 million monthly active users with 73 trillion rupiah (US$5.2 billion) in gross merchandise value (GMV) for 2018. Tanuwijaya claims the firm’s GMV is expected to reach 222 trillion rupiah by the end of 2019, which would be equivalent to 1.5% of Indonesia’s GDP.

“Ten years ago when we started, we saw a mountain and promised to climb that mountain one day. After 10 years, we reflected and figured out that we’re just at the base of the mountain,” he added. “With the funding we have, we finally have the proper tools to get on top of that mountain.”

Building a ‘super ecosystem’

Tokopedia last raised money in late 2018 – a mammoth US$1.1 billion round led by SoftBank and Alibaba. The investment marked the company’s strategic move from being an ecommerce platform to a provider of “infrastructure-as-a-service,” or what Tanuwijaya also called a “super ecosystem.”

The move includes expanding the platform to offer digital services (e.g. utility bill payments and phone credit top-ups), partnering with local governments to let users pay taxes through the Tokopedia platform, and increasing financial inclusion for users through the likes of its mutual fund product.

“All of that is still rooted to our core business and aligned with our mission and vision,” he said.

“What we do today, we cannot do alone. We do not sell our own products; our 6.4 million merchants do. We don’t do logistics, so we have to innovate together with the ecosystem. What we seek is collaboration,” he shared.

This stems from Tokopedia’s vision to democratize commerce and technology. But to truly achieve its goal, Tanuwijaya said the company has to help the likes of farmers and fishermen so that in the next 10 years, they can do what they do today, but with technology.

“You will see investments aligned to that. […] Can we actually create more rural opportunities? [Can we] reverse urbanization so that Jakarta doesn’t sink?” he said. “Wherever you are, you should be able to be a nationwide business. We’re transforming Tokopedia not only as a tech company for ecommerce, but rather to help everyone be a tech company.”

To that end, the firm started recent initiatives including an order fulfillment service, loan facilities for merchants, as well as a spate of acquisitions and investments. One of the higher-profile moves it’s done is the acquisition of Bridestory (the wedding marketplace) and its subsidiary, children activities platform Parentstory (Tanuwijaya declined to disclose how much the acquisitions were worth).

Work-life harmony