Smart lockers were a big topic at Last Mile Fulfillment Asia this year.

What are they you ask? They are the tech-world’s equivalent of high school cubbies but out on the street, in your condominium lobby or shopping mall accessible only to users with the right digital passcode.

smart lockers Southeast Asia

POPStation lockers in Singapore. Source: SingPost

Many e-locker providers such as PopBox in Indonesia, Box24 in Thailand and POPStation in Singapore talk about the future of their businesses as the best solution to the region’s ‘last mile’ problem. But is it that simple?

Let’s disassemble the smart locker.

How it works

As online retail grows in the region, it’s understandable that more packages need to be delivered to end consumers. Nomura International (Hong Kong) projects that the package delivery market for the six major Southeast Asian countries will more than double from 2015 levels to over $7.5 billion in 2020.

The last mile becomes costly for companies because of how geographically vast countries such as Indonesia and the Philippines are and the broken address system across Southeast Asia.

While the last mile of the supply chain may be the shortest physical stage in a package’s journey, it represents about 30% of total delivery costs.

“Delivery cost per package a few years ago used to be 60 THB and now, logistics companies in this red ocean are subsidizing costs to charge only 30 and even 20 THB to grab market share,” said Paul Srivorakul, aCommerce Group CEO, at LEAP by ecommerceIQ and Sasin SEC.

Enter the smart locker, a new delivery option that promises less failed deliveries, flexibility for customers, and cheaper last mile costs.

smart lockers Southeast Asia

Benefits of a locker-bank i.e. smart locker.

For couriers to deliver the package:

  1. Login with company’s credentials
  2. Access data and address customer’s information
  3. Choose an available compartment
  4. Scan the package
  5. Put the package in the compartment, lock it and confirm delivery

For recipients to pick up the package:

  1. Internet shopper selects the “parcel locker” while checking out online
  2. Shopper receives an email confirmation and SMS (or in app) with details and code on package pickup
  3. Customer can track shipment to know when package has been dropped off
  4. At the smart locker, customer provides the code and other details using the touch screen
  5. If a package is not picked up, it will be transported to the nearest branch of the logistics partner

 

In Indonesia, PopBox Asia allows customers not only to pick up packages but as well make payments and return packages. In Thailand, WashBox24 (now Box24), lets shoppers pick up groceries and washed laundry ordered in app through partnerships with supermarket Tesco Lotus.

In North America, 7-Eleven has opened its doors to partners like Amazon interested in renting lockers to stay relevant as commerce moves online.

smart lockers Southeast Asia

Source: WSJ

But lockers are risky for 7-Eleven as each locker takes up about the same amount of space as one large shelf, holding dozens of lockers, which by some estimates could represent thousands of dollars in lost sales each year.

Do they actually solve any problems?

In many ways, smart lockers sound like a perfect last-mile solution. Available 24-hours, simple to use, convenient for the consumer and cheap fee for ecommerce businesses as packages are consolidated at one drop-off point.

smart lockers Southeast Asia

SWOT analysis of e-lockers.

But do they work?

Based on recent app reviews for POPStation and Box24, the service and ‘seamless’ pick up experience have faced some problems.

smart lockers Southeast Asia

Source: Google PlayStore, POPStation (left), Box24 (right)

While understandable to have hiccups with the introduction of new technology, the hardware heavy system has proven to work well in markets like Europe. But in a unique market like Southeast Asia, there are a few factors unaddressed by most reports.

Apart from the fact that the lockers require prime real estate and are costly to build and maintain – $5,000 to $35,000 per piece – these machines don’t accept cash.

smart lockers Southeast Asia

Source: WashBox24

Given that majority of Southeast Asians, with the exception of Singaporeans, still prefer cash-on-delivery, this last mile option is not viable for many ecommerce companies whose customers want to see the item before committing to purchase.

smart lockers Southeast Asia

Source: aCommerce

In China, 15,000 lockers were put in place in 2014 but handled only roughly 1% of all deliveries.

As Lazada Vietnam Gerald Glauerdt commented LMFAsia 2017 to ecommerceIQ’s question if he believed lockers were a good solution for last mile, “these lockers are more expensive than couriers that can take the package directly to the door.”

Operating in low-labor markets such as Southeast Asia gives companies the luxury of re-thinking their last mile strategies. As logistics networks expand their networks in the region, such as hubs on Indonesia’s scattered islands, costs will decrease to reach customers in remote locations.

New startups such as Park N Parcel are also leveraging existing infrastructure such as mom and pop shops and convenience stores to offer another last mile solution.

With packages expected to increase in the region thanks to the rise of ecommerce percent of total retail sales, there is plenty to go around for logistics players, given they can handle today’s customer expectations.

“If you do last mile only, there’s zero loyalty. You don’t remember who delivered your order, but you remember who screwed it up,” – Vaibhav Dabhade, CEO and founder of Anchanto.

THE BACKGROUND

Popular travel site Expedia had its humble beginnings as a travel booking division by Microsoft in 1996, known as Microsoft Expedia Travel Services. The goal was to provide a groundbreaking method for customers to research and book their trips.

In the early 2000s, American media and internet company, IAC took over Expedia and what followed was a string of other ecommerce site acquisitions: Hotels.com, Hotwire, TripAdvisor, and China’s eLong.com.

“Buy, not build” would become the company’s repeated business strategy. Five years later in 2005, Expedia was listed on Nasdaq.

“We are always opportunistic,” commented Mark Okerstrom, Expedia’s then CFO. “The M&A team is never closed for business. We are always on the hunt for interesting opportunities and we’re fortunate to have an incredibly strong core business, which gives us the confidence to go out and do some of these acquisitions that are a little bit more intensive.”

Expedia Southeast Asia

Source: Expedia

THE CHALLENGE

Technology, as with most industries, has disrupted the travel business at a blink of an eye, shaping the expectations of travelers. New forms of “travel tech” such as fare comparison, travel design and emerging business models like Airbnb’s share economy, shook an industry that relied on travelers thinking only “where do I sleep?”

The internet granted people the luxury of a hassle free travel booking; best location, best hotel, best flight all for the best (lowest) price on one platform.

The arrival of Airbnb in 2008 changed the mindset of travelers – mainstream hotel chains no longer attracted them. Travelers sought property in remote, funky neighborhoods and relied on the local know-how of their host to explore destinations. Could Expedia compete with its traditional hotel offering?

Expedia Southeast Asia

Source: Phocuswright

THE STRATEGY

In order to cope with the volatile industry, Expedia did what it does best – opened its wallet for another acquisition. The company added Airbnb competitor HomeAway to its portfolio for a price tag of $3.9 billion in 2015.

Expedia Southeast Asia

Source: Nikkei Asia

The acquisition helped Expedia increase market share but is still behind Airbnb. In Q2/2017, Airbnb captured 15% of the global home-sharing market while Expedia and Priceline secured 12% and 9%, respectively.

Expedia, already with a stronghold in North America, realized that it needed to focus on emerging markets where 50% of the world’s millennials live and where its competitor, Priceline, established a leading position via Agoda.com and Booking.com.

Asia’s travel industry is expected to rise with a 12% CAGR during 2015 – 2020 to reach sales of $434 billion.

Asia Pacific is expected to remain the main driver of this performance, registering a 20% CAGR over the next five years, as internet adoption picks up in the region.

Expedia Southeast Asia

Source: Skift.com

In an attempt to compete with Priceline’s popular Booking.com, Expedia made a recent investment of $350 million into Indonesia-based Traveloka to bolster its presence in Southeast Asia as the company services six of the region’s primary markets.

“The US used to be the driver of our global strategy and other areas would follow,” expressed Dara Khosrowshahi, then CEO of Expedia in June 2017, only months before embarking to Uber. “But Asia is now driving our strategy.”

Unsurprising as the region’s internet economy is expected to grow from $31 billion in 2015 to $197 billion in ten years time. Travel is estimated to account for 45 of that, according to Google and Temasek.

“Our target is to at least double our share of the online travel marketplace in Asia[-Pacific]. I think we are on our way,” said Dara Khosrowshahi.

More specifically, Dara expected to increase gross number of bookings from its non-US businesses from the current 36% to two-thirds. It’s quite possible with Traveloka as an aid because Expedia can capture more of the 168 million Muslims expected to go abroad by 2020 as Indonesia is home to the world’s largest Muslim population.

Before his departure, Dara said there are two keys to winning Asia:

  1. Understanding Asian consumer habits
  2. A mobile-first attitude

To achieve this, the company operates Expedia Innovation Lab in Singapore where it uses sensor technology to understand how users feel while browsing Expedia-branded websites in 14 Asia-Pacific markets, including Australia, China, Thailand and Singapore, most of which have larger traffic volumes coming from mobile users.

Expedia Southeast Asia

Expedia Innovation Lab uses sensor technology to understand how consumers in Asia interact with its websites and services. Source: Nikkei Asia

THE FUTURE

The company is trying to fight for a stake in the fast-growing home-rental industry in Southeast Asia, where home rentals are still illegal as regulations have not caught up to the “share economy” while expanding its core hotel-booking business.

The company already has formed strong alliances with powerful players in the region such as AirAsia. Expedia acting as an official distributor through its agency AAE Travel can bundle AirAsia flights with hotel packages. But in a nascent market such as Southeast Asia, strong discounts are only the beginning as consumers have a plethora of travel agencies to choose from.

Good news? No single company occupies over 23% market share in any major Southeast Asian country.

One of the biggest pain points that most brand managers in traditional companies experience is internal push back when trying to drive their ecommerce initiatives forward.

Why is this?

Headlines like this:

Online sales eating into offline retailers profits
Ecommerce is killing traditional retail
Five signs that stores (not ecommerce) are the future of retail
The advantages of ecommerce over traditional retail

And this,

Ecommerce Case

A fashion item sold in store or online is still a sale made for the company. Source: ONESTOP

Creating an online retail channel requires resources and that could cause other departments to feel threatened but headlines like these create a ‘this or that’ type of mentality even within companies.

No matter which channel the sale is made, it’s all money going into the company’s pocket.

Given that online retail is usually pitted against traditional retail as “the enemy”, ecommerce managers have the uphill challenge of proving that this isn’t the case and actually, sometimes the complete opposite.

Re-thinking a traditional mindset

Fighting for more resources to be allocated to ecommerce becomes a struggle given the unpredictable nature of success online.

Open an offline store in a popular shopping center and it’s almost guaranteed to generate sales. Open an online store and fear that it will be lost in a sea of better keywords, better product images and even hungrier digital agencies.

But ecommerce is not new competition, it is simply another shop down the street that showcases what your brand is about. It can also be used to drive more foot traffic to your shop if conducted correctly.

Once the mindset, “you against me” is reversed, can ecommerce channels thrive on behalf of the brand.

The company will slowly learn a new business model described as “unified commerce” – where retail and the internet are not siloed but managed to complement one another.

Being able to utilize the internet to resurrect a brick-and-mortar brand will be vital to many brands currently stuck in an in-between situation.

Payless Shoesource in the United States is planning to close up to 500 of its stores for bankruptcy reorganization but will continue its operations in the Philippines – a market that they advocated for ecommerce almost since its inception in the country.

“It will be business as usual for Payless’ international operations, including the Philippines, as these business segments have been doing well and are profitable,” SSI Group Inc. said, Payless Philippines official distributor.

Making the ecommerce business case

Payless Philippines Ecommerce Project Manager, Thea Lizardo, spoke to a select audience at the ecommerceIQ x Google Ecommerce Masterclass in Manila earlier this year to share a few tips for managers advocating ecommerce internally.

Have a champion

This can be any individual in the company, preferably someone in the C-level ranks, who supports your mission to build a digital channel. When requesting for a larger budget or during monthly reporting, this ‘champion’ should be able to ensure enough resources are available to reach your growth targets.

ecommerceIQFrom experience, Thea knows that reporting may look deceiving to outlookers but that ecommerce managers should be able to understand and explain the numbers.

Brand milestones – highs – are usually followed by dips as the company reassess and allocates more spending to build the ‘front-end’ business (demand generation) by focusing on optimizing marketing, mobile, and product assortment, etc.

Employee advocacy

Often overlooked, a company’s employees can be the number one source for low-hanging free advertising fruit. As shared by Thea, 1,000 employees can be responsible for reaching one million customers, or creating 5,000 unique pieces of content all about your brand.

Their involvement in the company’s success online and knowledge of the ecommerce department’s progress will also build a sense of community and ownership.

ecommerceIQ Payless

Payless Philippines Ecommerce Project Manager, Thea Lizardo speaking at ecommerceIQ x Google PH Masterclass 2017

Is it possible to share everything?

Umbrellas? Molisan, E Umbrella, OTO
Basketballs? Zhulegeqiu
Power banks? Meituan-Dianping, Xiaodian, Jiedian
Concrete? Duola
Bicycles? Ofo, Mobike

Above are a few examples of China’s recent headline startups that seem to believe so. They’re banking on a collaborative economy in order to build sustainable businesses.

“Ridesharing, apartment/home lending, peer-to-peer lending, reselling, coworking, talent-sharing, etc. The sharing economy or collaborative economy, is taking off in all sorts of niches.”Forbes

Cars and homes made sense, not at first, but Uber and Airbnb have clearly been very successful platforms that connect users to existing resources. But these are success stories siloed in developed markets, not Southeast Asia or China.  

The basis for these models seem to be the same: consumers are willing to pay to ‘borrow’ services/products for a period of time and eventually, there is profit to be made in the distant future and companies can collect valuable user data.

Critics may be skeptical that any of these power bank or umbrella sharing startups can be successful but there has been no lack of capital backing, currently around $25 billion in total.

The sharing economy also reached a staggering 4 trillion yuan last year (USD $502 billion).

ecommerceIQ

Chinese basketball sharing startup Zhulegeqiu.

Chinese basketball sharing startup Zhulegeqiu was recently injected with a $1.4 million venture investment from Modern Capital, a Shanghai-based venture capital firm, in May. But raising capital is not a strong indicator for a good business model.

Have we not learned from the fall of “Uber for X” business model fad?

Let’s say we forget about profitability or the fact that these startups incur high costs by owning the inventory – what other factors are required to make a sharing startup tick? And is the industry conscious of the longevity of these startups suddenly popping up in China and Southeast Asia?

Trust ‘em or clean up the mess  

A share economy relies heavily on a trust system. If someone is borrowing a bicycle for a rate of 5 THB (USD $0.15) per hour, what is the likelihood a USD $300 bicycle will be returned in perfect condition or be left in a convenient location for the next rider?

Zhuang Ji, director of a social media ‘bike hunter’ group in China recently inspected 983 Ofo bikes in six cities (Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu) and discovered the following:

  • 19 percent were damaged
  • 15 percent were unlocked
  • 12 percent had been stolen for private use
  • 2 percent were being ridden by children under the age of 12

Dump of broken bicycles from multiple share economy bike businesses in China.On the other hand, Umbrella sharing startup, E Umbrella, in China suffered a loss of almost all 300,000 of its umbrellas across 11 cities.

ecommerceIQ

Dump of broken bicycles from multiple share economy bike businesses in China.

Let’s do the math:

Loss → Cost of umbrellas: 300,000 x USD $8.82 (cost per umbrella) = USD $2,626,000

Gain → Customer deposit: 300,000 x USD $2.90 (customer deposit) = USD $870,000
Gain→ Raised capital: USD $ 1,470,000  

Total: minus USD $286,000

The loss isn’t too shocking when the business model relies on what Vox calls, “unpredictable weather and forgetful people”.

But founder Zhao Shuping is certain to succeed and plans to introduce 30 million more umbrellas across China by end of year. And like most of the other ‘share companies’, E Umbrella says advertising will be the main driver of revenue after announcing a partnership with ride-hailing app Didi Chuxing.

ecommerceIQ

Umbrellas waiting for users to ‘borrow’ in China.

Southeast Asia’s not ready.

Chinese bike-sharing giant Ofo recently entered Thailand by introducing its bikes to Bangkok university campuses. A brave move after competitor oBike was deemed a scam by the Bangkok Metropolitan Administration (BMA) soon after its launch and never took off.  

An analyst told Forbes that China’s economic downturn – roughly a slowdown from 7% to 6% real GDP – is making people less willing to purchase goods, creating opportunities for the sharing market.

The opposite can be said for the region, where the Philippines and Vietnam are propelling the region’s 5% average real GDP growth and Myanmar alone is expected to grow by more than 7% in 2017 and 2018.  

“After all these years, China is finally embracing its communist roots,” said Andy Tian, an entrepreneur and co-founder of Asia Innovations Group in Beijing. “That’s the essence of communism: communal sharing.”

“But there’s no question that it’s a bubble,” he added. “It may have roots in something valuable, but can you really share everything?”

China’s booming sharing economy is said to be attributed to a “surplus of money and shortage of good ideas” so it’s probably best not to follow in their footsteps.

honestbee Thailand officially introduced its on-demand groceries services to the public on March 16th earlier this year in Bangkok with a buzzy press conference.

This isn’t the company’s first step into Southeast Asia, the Singaporean based company is already present in eight markets since its initial launch in 2015.

eIQ sat down with Joel Sng, CEO and co-founder of honestbee, to talk about the company’s on-demand model, product market fit and scalability in a developing market.  

Groceries online in Southeast Asia

Delivering apples and milk to a customer’s front door isn’t a new concept. Instacart, US born groceries service, took off in 2012, serves 25 markets in the US, and raised $400 million in March. The company’s valuation was $2 billion in 2015.

Jakarta based on-demand service HappyFresh that raised a $12 million Series A and an undisclosed Series B launched in both Indonesia and Thailand two years before honestbee entered the same markets.

Why has there been so much money swirling around groceries?

According to Nielsen, 30% of Millennials (ages 21-34) and 28% of Generation Z (ages 15-20) respondents say they’re ordering groceries online for home delivery, compared with 22% of Generation X (ages 35-49), 17% of Baby Boomers (ages 50-64) and 9% of Silent Generation (ages 65+) respondents.

And groceries are only the beginning. honestbee doesn’t only offer apples and oranges, they want to be the ‘everything, everyday’ app.

Much like the mentioned businesses, honestbee shares similar value propositions:

  • Exclusive partnerships with supermarkets and other retailer partners
  • A single check-out purchase through a mobile app
  • An operations network composed of part-time workers and motorbikes taxis
  • A vast inventory of groceries and fresh produce
  • Scheduled “slotted” deliveries
  • Asset light business: no warehouses, only hubs (grocery stores) and no delivery trucks

There are a few differences that make honestbee stand out: the company makes money from delivery fees and revenue share and can actually save up to 30% on labor costs because shoppers are hired as independent contractors, not traditional full-time, salaried employees.

Product market fit for a demanding income bracket  

Unlike the others, honestbee targets the top 10% money makers in each market by being more selective with partners to offer a service consumers are willing (and able to afford) to pay a premium before the rest of the market adopts the behavior.

Current exclusive partners include Villa Market, Fresh Deli, organic produce provider Fruits for Health, and all natural household cleaning line Pipper Standard.

“We figure out what each market needs and work with the right partners to bring value and convenience to our customers,” says Joel.

What also differentiates honestbee from its competitors is the varied service it offers across markets. How does the company decide what to launch? Through regular customer focus groups like the one held in Singapore of March this year.

A few questions the focus groups aim to answer before officially launching a new service:

  • Do the customers like our partners?
  • How do they suggest we improve the shopping methodology?
  • Is the infrastructure already there or do we need to build it?
  • Is the market growing fast enough in terms of age and adoption of behavior?

These feedback loops help honestbee work out what each market needs and led the company to discover certain market intricacies:

  • Offering garbage removal in Taiwan would be an instant success as the country has high stringent waste policies   
  • Launching an on-demand laundry service in Hong Kong works as there is large expat population in the country
  • Singaporeans would not pay for marked up meal deliveries as offered by rivals foodpanda, UberEats
  • Online grocers in Japan accounted for only 2%, or $5.5 billion USD, of the retail grocery market in 2015

Although each market is different, the core of the business still remains its groceries delivery service and is always launched first.

A teeny problem: “Managed crowdsourcing”

There are a few challenges with on-demand models:

  • Shopper retention and shortage because of fluctuating wages in a developing market
  • Expectancy for shorter and shorter delivery times by customers: same day → in two hours → next hour
  • Out of stock items and inaccurate deliveries – balanced with a “Bee” training program

Although it is risky to be spreading services so thin in concession, Joel is confident the company has the resources and isn’t concerned about needing more external investment aside from the $15 million it raised last year.

“We are comfortable with our economics right now,” comments Joel.

honestbee aims to become a one-stop solution for customers and make it possible to have anything available at the touch of a button by marrying the online and offline world.  

“Groceries is such a generic term,” comments Joel. “We never envisioned just being in the groceries business – we want to solve problems for our customers.”  

When ecommerce first boomed in Indonesia around 2014, Albert Lucius saw many companies racing to serve the top 20% of the urban population while ignoring the rest.

“What about the people unfamiliar with the internet, let alone shopping online? And what about those living in rural areas?” Lucius mused. “Ecommerce players at that time were doing almost nothing to educate this demographic.”

Seeing this gap, Lucius teamed up with a fellow schoolmate from the University of Berkeley’s Haas School of Business, Agung Nugroho, to build Kudo – the online to offline (O2O) technology platform that connects online merchants with offline customers and was acquired by Grab in April. TechCrunch estimated the deal is worth $80 – $100 million but no confirmation has been made by either party.

Lucius acts as CEO, while Nugroho takes care of operations as COO and through its platform, Kudo wants to ensure all Indonesians are included in the online revolution and benefit from an economy that boasts a $157 billion potential.

Product-market fit: Tales of trial and error

Currently, the company is using individuals, mom and pop shops, and small store owners as Kudo agents to act as medium between online merchants and hard to reach customers.

Through these agents and a tech platform, the company enables the unbanked or those with low financial literacy to perform digital transactions. How?

  • The agent invests capital into their Kudo agent account, which can be as low as IDR 10,000 or $0.75
  • The customer views a list of products on the Kudo platform on mobile or a tablet provided by the agent
  • The customer chooses what they want to buy and pays the agent in cash
  • The agent makes a commission based on the product category sold (3%-20%) – the more they sell, the more they make

Although currently a well-functioning system, this was not how things were always done at Kudo. The company pivoted two times before finding a model that complemented Indonesians buying behavior.

kudo micro-entrepreneur indonesia

Kudo platform, facilitated through its agent, is bridging the gap between offline customers and online merchants.

 

Kudo is an acronym for ‘kios untuk dagang online’ or ‘kiosk for online trading’, and funnily enough, the business’s first model was literally a kiosk.

The company installed machines loaded with the Kudo platform in office complexes, shopping centers and convenience stores in Indonesian suburbs, as well as second-tier malls in the city, in hopes people would use it to place orders for various things such as food, tickets, and other goods.

They soon discovered that majority of citizens are wary about using unknown machines, afraid to break it seeing as they didn’t know how to operate it.

Kudo later redefined its business by creating a tablet-friendly platform and employed the help of sales promotion girls (SPG) to educate the people about its buying process. The second attempt worked well but hiring so much (wo)man power was not sustainable nor scalable.

The two broken models taught the founders a valuable lesson.

“Most Indonesians still need the element of trust in order for commerce to work. They need the personal and social touch in order to purchase something.”

Kudo’s agents of change

Through its present-day network of more than 500,000 agents across 500 cities and rural areas in Indonesia, offline customers once disconnected from the digital world now have access to products from Kudo partners like Lazada, BukaLapak, Berrybenka and Unilever to name a few.

The platform not only offers commerce but also facilitates bill-payments, phone credit top up, and purchase of financial products such as insurance.

The most popular transactions are top-ups that make up 30% of total transactions, followed by purchase of goods, especially cheap electronics, fashion, and bill payments.

kudo micro-entrepreneur indonesia

Kudo’s team explaining how the platform works to potential agent.

 

There are millions of customers that have used Kudo in Indonesia and the company credits its Kudo agents for partially solving three main roadblocks commonly encountered in emerging ecommerce markets like Indonesia – trust, payment, and logistics.

“Our agents are all familiar faces in the neighborhood, so even if initially the community does not understand nor trust the internet, they’re more willing to try out a new technology if it comes from someone they know,” explain Lucius.

From a logistics perspective, agents act as the drop-ship points for ecommerce players who can either have pick ups from their store or deliver straight to the customer. This highly reduces the chance of failed deliveries.

Kudo agents also decrease shipping costs for retailers when they order customer purchases in bulk.

“We know it’s not the most sophisticated system in the world and it’s not perfect, but it works for our market as it utilizes Kudo’s network of agents to solve a real logistics problem in Indonesia,” remarks Lucius.

Grooming a generation of micro-entrepreneurs

By taking a traditional route and using real people to educate and share new technology within communities, Kudo is not only speeding up the race to e-retail adoption but empowering individuals to dabble in “micro-entrepreneurship”.

“People only need a smartphone to become an agent and it doesn’t need to be an expensive one because our app works on every Android phone,” said Lucius.

There are two kinds of agents in Kudo’s network right now; store-owner agents and non-store agents, with the share of 40% store owners and 60% non-store agents or individuals. On average, the store owners agents could doubled their normal income through Kudo.

Building an inclusive economy with a giant

The company’s principle is and has always been to improve the lives of people.

Under its current model, Kudo aims to slowly convert more people to try online shopping by maturing the country’s payments literacy and understanding of ecommerce.

Its acquisition by Grab takes the company’s mission a step further as the Kudo platform will be integrated with Grab’s mobile payments platform, GrabPay and both companies are invested in a collaborative R&D lab in Kudo’s office called Kudoplex.

Kudo’s agents are also offering services like GrabPay credit top-ups and recruiting drivers for Grab to interconnect the two already-large networks into one expansive and all-encompassing payments infrastructure.

“We are very excited to work with Grab as we share the same mission to empower the unbanked to benefit from the rapid growth of digital economy,” closed Lucius. “There are a lot of good things to come.”

 

 

kudo micro-entrepreneur indonesia

Left to right: CEO Kudo Albert Lucius, CEO Grab Anthony Tan, and COO Kudo Agung Nugroho