Warung are here to stay
Indonesia’s minister for Cooperatives and SMEs, Teten Masduki stated that there are 3,5 million traditional warung across Indonesia. While warung, Indonesian for shops can also mean warung makan (restaurants), the minister was referring to warung kelontong, or groceries shops in local Indonesian neighborhoods.
Despite the convenience of online shopping and digital wallets, many still gather in warung, Indonesian for small shops, to shop for groceries or simply top up their phone credits. While it seems odd, cultural factors may have explained how warung is thriving despite competition from its digital counterparts such as online groceries and eCommerce.
Warung is a special part in Indonesian culture. Unlike developed countries where neighborhood shops are franchises of large corporations, warung in Indonesia is typically owned and run by individuals, your local neighborhood uncles and aunties. Warung are not businesses, but a part of the local communities. People visit warung not just to shop, but often to also catch up and chat with neighbors.
Building digital ecosystem for warung
As it is unlikely that warung will be gone any time soon, its huge numbers and longevity have attracted startups and corporations alike to tap into the market and provide solutions to empower and grow these businesses, or to help make their life easier.
Companies such as Paytren and PayFazz recruits warung to become their Payment Point Online Banking (PPOB) agents. By becoming PPOB agents, warung owners can offer phone credit top up, electricity tokens and even train or bus tickets to their regular customers, giving them an additional stream of income.
GudangAda, Ralali and Ula run B2B marketplaces where retailers or even warung can purchase wholesale at a cheaper price, transforming the traditional supply chains and allowing warung owners to pocket more profit.
Popular eCommerce marketplaces like Bukalapak, Tokopedia, Blibli and Grab Kios have also entered the market, providing both PPOB and B2B marketplace solutions for warung.
Accounting and bookkeeping apps such as BukuKas, BukuWarung and Credibook arrived to help warung owners manage their cash flow easier.
Warung Pintar, a startup founded in 2017 tries to tackle a little bit of everything, providing all the solutions mentioned above plus painting partner’s warung with its signature yellow and equipping them with facilities such as electricity and WiFi.
Understanding that warung is a small scale individual business, it is often difficult for warung owners to get access to traditional financing from banks. However, in recent years, lending startups such as Modalku, Awantunai and Tokomodal had started offering their solutions to warung, helping them to get access to scale and grow.
Even with all the brand’s mentioned above, rooms for growth in the sector are very much open for new businesses, especially in rural areas of Indonesia where existing brands’ physical presence remains low. B2B solutions are generally hyperlocal and require contextual knowledge of the region to win. In addition, on-field staff are often needed to market new and unfamiliar solutions to warung owners.
Building a B2B solution often requires handling the complexities of managing payment operations. Operating revenue sharing models or charging management fees requires businesses to split and route payments with the right amount, at the right time and to the right account.
xenPlatform can help simplify these processes for you. Whether you are running a B2B marketplace or a SaaS platform, we can help streamline your payments infrastructure.
xenPlatform provides the tools that enable you to manage complex payments flows within your Platform. You may accept payments from major payment methods, and flexibly route these payments across your platform to various partners (e.g. sellers, vendors) while also monitoring each partner’s activity in a centralized dashboard.
Xendit is a financial technology company that provides payment solutions and simplifies the payment process for businesses in Indonesia, the Philippines and Southeast Asia, from SMEs and e-commerce startups to large enterprises. Amidst the fragmented payment landscape in Southeast Asia, Xendit enables businesses to accept payments from direct debit, virtual accounts, credit and debit cards, eWallets, retail outlets, and online installments
For many businesses, accepting payments online is new territory, but we’re here to help. We have helped 1000s of businesses come online and we’d love to help you too.
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