Enabling e-commerce businesses with same day delivery in Indonesia - Kirim.co.id
With a boom in e-commerce in Indonesia, the enabling services for e-commerce sector are also growing. The courier delivery business has seen a direct proportional growth. Kirim is one startup from Indonesia that is building its business of supporting e-commerce delivery and logistics. When we spoke to Intan Saraswati, CEO and Founder of the company, she shared her story of starting it as a side business, quitting to do it full time and re-iterating her business model time and over again to finally settle for specializing in same day delivery for e-commerce businesses. Edited excerpts of our conversation with Intan:
Evolution of the idea and business model over years
I have 9 years of experience working in international courier companies with various assignments – from customer service, operations, to sales. It gives me a lot of knowledge and experience of how a courier company runs. I saw a great potential in the same day delivery model for courier companies in Indonesia and technology that everybody can use around it; not many companies are doing it.
In 2008, I started very small - with 1 employee who was my younger sister and delivering 5 couriers a day. We provided same day delivery for banking customers whose documents are highly urgent and confidential. The name at that time was d’Courier. I tried to make it sound French. It was my side business and we were taking baby steps until 2011 when I decided to quit my day job and do this seriously.
Earlier, I was thinking to build it myself as my legacy, with my own money and develop as we grow. But along the way I saw another great potential from the e-commerce boom in Indonesia. Logistic and payment is the most important thing to support e-commerce. I realized that I couldn’t wait too long and I had to move fast to catch this opportunity. I made a business plan and started looking for investment.
In 2012, I signed a deal with an angel investor and with that capital I started the real company. We moved from my living room and rented a place for an office. I hired some staff, equipped them with brand new motorbikes, rebranded to KIRIM.CO.ID. When you’re building a startup, every day is a challenge and it always teaches you something. The bigger your company is, the bigger the challenge. But this is what I love about starting up: you never stop learning. I’ve been changing, modifying, and pivoting our business model, policies, salary scheme, etc to have a better outcome.
We started to develop our own tracking system and added some carrier partners to expand our network capabilities. Since the launch in November 2012, we currently have 500 customers from personal, e-commerce, and corporate. Our revenue growth is approx. 20% month on month.
Key strength area of KirimKirim provides a range of door-to-door delivery and logistic solutions. Our strength is in Same Day Delivery service within Jakarta and surrounding areas. Strengthening our custom-build technology, we are looking to make deliveries faster and easier. We have services for personal, corporate, and e-commerce segment but our main focus is definitely serving the e-commerce sector.
Market potential for courier companies in Indonesia
Based on data from the Ministry of Communications and Information Technology, e-commerce market in Indonesia in 2013 is estimated to reach Rp 130 trillion, growing nearly doubled compared to last year's Rp 69 trillion.
While Frost & Sullivan research in Indonesia Telecom Indonesia-Go Online Outlook 2012, mentions income e-commerce transactions in Indonesia reached USD 120 million in 2010 and will increase to USD 650 million in 2015.
Also from Frost & Sullivan, potential for courier industry for 2013 in Indonesia is 300 trillion rupiah (approx. 30 billion USD). Leading courier companies in Indonesia said that they are growing more than 40% within the past 3 years due to the ecommerce booming. 60% of their current revenue comes from the e-commerce.
For same day deliveries, there are a few small courier companies in Jakarta but they’re still doing it traditionally. The only way to track deliveries is by calling the drivers who are delivering the couriers. In KIRIM, our couriers are delivered by our own employees so the security of the shipment is guaranteed. For regular deliveries and domestic shipments, there are some major courier companies who are already in business for more than 20 years now. But we don’t see them as competitors. We collaborate with them by using their network to deliver our domestic shipments.
Setting up the technology backend
I didn’t have a background in technology. All I knew was only about courier operations and what do we need to monitor for our shipments’ movement. So, in the beginning I just created an excel file with all the pivot tables and macros and visual basic to ease my team to update and report shipment status. After the investment, I hired a technology company to help me in building a system I want. The development didn’t go as expected. My customers were already chasing me for the API I planned to finish by the end of the year.
I started to look out for another solution and then I was introduced to another technology company. I asked them to help us in finishing the system, and when the owner looked at our business model, he was interested and he decided to invest in the technology. Now, our internal tracking system is already up and running and customers can track everything online. The API and the mobile application are in beta testing stage and we will be launching both soon. The API helps e-commerce companies to manage shipping online, gives visibility of shipment status & billings and helps in creating their own customized shipment report.
People think it’s easy to build a logistic team, but it’s not that easy. Experience matters. I had some customers who decided to run their own logistics just to have a cheaper delivery cost. At the end of the day, the cheaper cost gave them bigger headache so they gave up. It’s always better to focus on your core business and outsource the non-core activity. That’s why, even big multinational companies often decide to outsource their logistic to a professional logistic company rather than doing it at their own.
Currently, I have 40 employees, 25 of them are in delivering couriers. Managing people is an inherent challenge to the business I am doing. Majority of my employees are courier delivery guys and they’re the most important part of the company. All of them come with a different level of education and varied backgrounds. A different approach is needed to train and manage them. During my previous corporate job, I was managing up to 100 people. But still it’s different when you’re managing 40 people in your own company.
As a startup, I don’t have the luxury to hire a high-caliber managers or directors yet. But thankfully, all of my team members have the same spirit and passion like me. We know what we’re doing and we love it. And we believe that this is going to be a big thing.
We’re now delivering almost 500 shipments per day, and we’re looking to grow to 3,000 shipments a day by the end of this year. Currently, for same day delivery within Jakarta, our average delivery time is 3.5 hours. We’re constantly trying to improve our service and targeting to do delivery in 2 hours.
We’re also planning to open other hubs and counters in Jakarta, and looking at the demands, we are looking at opening branches in other major cities in Indonesia. Also, we’re in a negotiation with some investors from Asia and the US.