A new breed of startups are trying to tackle rural ecommerce in Southeast Asia, reports Tech In Asia.

Kudo agents source products from a number of ecommerce stores. The agents typically sit in mom and pop stores in rural Indonesia and install the app to sell a wider variety of goods without having to stock them.

The agents will help customers to pick items from the app’s product channels, place an order, and take cash in return.

From countries such as Cambodia to the Philippines, this is a common problem for ecommerce companies; most people are not familiar with the tools that would help them shop online.

Most  importantly, people need a bank account to make payments. In Indonesia, more than half of the population over the age of 15 do not have one. As a result of this, less than 1% of Indonesians actually shop online.

The untapped window of missed opportunities is large, especially for people living in remote areas. Agung Nugroho wants to solve that problem by working with small town shopkeepers and turning them into ‘agents’ that help others make online purchases. This is how his new startup, Kudo, was born.

Kudo’s network of agents grew from just hundreds in May last year to over 100,000 currently. 50% of agents are in Java, while the remaining 50% are spread out across other provinces, to Aceh to Papua.

Maybe you don’t trust the online seller, but you would definitely trust the owner of the small shop next to your house, who happens to be a Kudo agent. – Agung Nugroho.

The startup also plays a role in last mile delivery. Trusted shopkeepers who are familiar with the neighborhoods can fill that gap.

One of the best selling items is gold. People buy gold from certified merchants on ecommerce marketplace Bukalapak, which is one of the shops connected with Kudo’s app. It is considered a safe way to invest for the future.

Kudo’s next goal is to have one million agents spread across the country. Agung hints that the startup is making several million US dollars in monthly transactions.

A version of this appeared in Tech in Asia on August 10. Read the full version here

A Singapore-based startup, Funding Society raised $7.5 million of Series A round, reported Tech Crunch. The company allows SMEs to access loans from individual or institutional lenders. The fund will be used to expand the operations in Malaysia, in addition to Singapore and Indonesia under the name ‘Modalku‘. Sequoia India led this investment round, along with several angel investors. 

The company claimed it has paid out $8.7 million across 96 loans to date and has 94% repayment rate. Fund Societies CEO, Kelvin Teo said the data shows the company’s reliability.

Funding Societies is primarily focused on working capital loans, to finance the day-to-day operations in a company. In Singapore, the average loan size is $67,000 ($90,000 SGD) while the number falls lower to $18,500 (SG$25,000) in Indonesia. It charges an origination fee to the borrower (3-4% in Singapore, 5-6% in Indonesia) and 1% monthly fee to the lender. It claims to have an approval rate of between 15-25% for loan applicants.

The fund will be used to expand its SME loans operations in Malaysia, in addition to Singapore and Indonesia under the name ‘Modalku‘. Sequoia India led this investment round, along with several angel investors. 

In addition to the expansion, the fund will also be used to comply with myriad of regulatory variations in the three countries where it currently operates. It prided itself on being compliant with regulations and ensuring the safety of investors money.

“Industry regulation has been announced in Singapore, but it will still take some investment to reach that level of compliance,” Teo added. Likewise, in Indonesia, he said the company is working with regulators to introduce a framework to regulate peer-based lending.

Outside of compliance and expansion — including expansion beyond capital city Jakarta in Indonesia — Funding Societies is planning to invest in its product to streamline its services for borrowers and lenders, add more services to make the investment options more tailored to the investor needs. The company target to reach breakeven in two-to-three-years.

A version of this appeared in Techcrunch on August 9.  Read the full article here

Facebook has partnered up with Mandiri, Indonesia’s largest bank to introduce a new payment option for ads, to increase efforts to turn itself into a commerce platform relevant to emerging markets, reports Tech in Asia.

Ads can now be paid using debit cards. Prior to this, the only accepted payment methods for ads on Facebook were credit cards or bank transfers.

Enabling debit card payments gives more people access to an instant online payment method.

It’s a move aimed to help Facebook reap profits in emerging markets like Indonesia. The social network counts 88 million active users in the country

Only 16% of Facebook’s ad revenues, its most important source of income are from Asia-Pacific, shows Facebook’s most recent earnings report. It pulled in a record high $1 billion in revenue in Asia.

NBC reported that Facebook will let emerging market companies sell through their pages. This is a part of the company’s efforts to build up potential advertisers in fast-growing regions.

The move is Facebook’s first foray onto online commerce in emerging markets. The company launched a service last year allowing some merchants to sell items through paid ads on Facebook’s app. The latest service will instead be free, and purchases can be made through merchants’ own Facebook pages.

By making sellers more reliant on Facebook, the company hopes that more businesses in emerging markets will eventually decide to become paying advertisers.

There are more than 60 million businesses worldwide using its service that can set up pages for free in an attempt to reach more customers out of Facebook’s 1.7 billion global monthly users. Eventually, Facebook hopes that firms of all sizes will become paid users of Facebook advertising. It is boosting this through fixing the infrastructure of emerging markets.

Facebook has launched ‘Free Basics’, a free, pared-down version of the internet in more than 30 countries without reliable internet connections. It is reportedly also working to test drones that will provide communities without internet, access to wifi. These initiatives are integral to Facebook’s global strategy of seeking to reach a large group of potential users in emerging markets.

Versions of this appeared in Tech in Asia and NBC on August 4 and 3. Read the full versions here and here.

Indonesian retail distributor company for medium-high brands, Mitra Adiperkasa (MAP), recorded profit growth of 78% to $3.5 million (46.3 billion IDR) from $1.9 million (26 billion IDR) in the same period last year. One of the reasons for this increase, as reported by, is the company’s venture to ecommerce.

MAP, who has more than 150 brands under its management, launched its ecommerce site MAP eMall last year.

The company’s investment through ecommerce has created more productivity, efficiency and increased their profit margin – Corporate secretary of MAP, Fetty Kwartati

She also added that the achievement in the first semester of 2016 is also supported by strong consumer spending during the month of Ramadan. She claimed the increase in demand is also because the brand is getting more recognition.

According to Bloomberg, MAP profit until the end of the year is projected to reach $14.6 million (192.4 billion IDR), growing 415.36% from last year at $2.84 million (37.33 billion IDR). Revenue projection for MAP will reach $1.1 billion (14.19 trillion IDR), growing 10.59% year-on-year.

In the financial statements, the company state that their net income until June 2016 has reached $502.2 million (6.66 trillion IDR), up 9.18% from $464.2 (6.1 trillion IDR) YOY.

The company’s revenue mostly came from retail and wholesale sales worth $462 million (6.07 trillion IDR), an increase of 9.56% from the same period the year before $421.5 million (5.54 trillion IDR).

A version of this appeared in on August 3. Read the full article in Bahasa here.

Indonesian internet provider association (APJII) estimates there are more than 100 million registered internet users, 72.3 million social networks users and 338.4 million mobile subscribers. And with the total ecommerce market appraised at $1.7 billion, experts and industry players in Indonesia are upbeat that the country is seeing growing appetite for digital economy.

According to the recent survey sponsored by SAP, a German software corporation, the number of digital consumers in Indonesia will keep growing as the nation’s ecommerce sector flourishes along with its economic growth.

“Digitalizing is the only way to stay in business. We already see so many companies who are left behind in the technology frenzy, and they do not exist anymore,” said vice president and managing director of SAP Indonesia Megawaty Khie.

Many local companies are still struggling with the “shift to digital” as they prefer to wait and see before leaving the analog safe haven. The most common reasons for delay were the costs and the tricky technical aspects of migrating to the digital platform.

Indonesians are not satisfied with current digital experience

SAP’s Digital Experience Report for Indonesia has shown that only 48% of its total 500 respondents (250 male and 250 female) across the country were satisfied with their current digital experience. The report aggregated more than 1,300 digital engagements with local brands.

The study has shown that satisfied digital customers would be 9x more likely to stay with a brand and 68% more likely to recommend it to others.

The survey used 14 key variables to rate a customer’s digital experience. The variables ranged from functional aspects such as security and simplicity, to more emotional ones such as interactivity and engagement.

Customers rated safety, simplicity and availability as the top qualities a digital application should have. The majority of Indonesian consumers today are young and tech-savvy and local companies need to keep up with their tech-savvy ways if they want to stay relevant.

A version of this appeared in Jakarta Globe on July 29. Read the full article here

Ride-hailing app Grab in collaboration with Indonesia’s Lippo Group will build a mobile payments wallet, reports Tech in Asia.

A Grab spokesperson said that the first stage of the rollout will begin in the fourth quarter.

“Lippo Group will develop a universal payments platform that enables Indonesians to top up an emoney account and use it to pay digitally at Lippo companies. Grab will integrate the payments platform into the Grab app as a mobile wallet option within GrabPay, enabling any mobile user to use the Grab app to pay for not only their daily transport needs, but also other lifestyle services.”

Indonesia’s digital payments landscape is notoriously fragmented. Each major bank is working on its own virtual wallet, roping in its network of vendors, but leaving consumers overwhelmed with options.

The Grab spokesperson comments, “the payments platform will initially be available for use at Lippo Group companies and to pay for Grab rides in Indonesia.”

This means that over 50 million existing customers from the two companies will be able to pay via their mobile phones for a full suite of services from Lippo’s retail companies.

The two companies sealed the terms of the joint venture in March. Lippo invested in Grab as part of the deal.

A version of this appeared in Tech in Asia on July 22. Find the full version here