Looking through Online Global Delivery Business in Indonesia
The courier and delivery service sector in Indonesia has been consistently reaching double-digit growth for the last several years. The growth is in line with the rapid development of the e-commerce industry in this country. E-commerce becomes a key driver of growth for the sector. It contributes up to 25% to total revenues for the industry.
Indonesia’s courier and delivery service sector has reached impressive revenue growth of 30% — 40% in 2016 because of the rapid growth of the e-commerce sector. This is well above the logistics industry growth average of 14%-15%. Ernst & Young predicts that e-commerce in Indonesia will grow by 40% per year looking at the internet and smartphone users which reached 93.4 million and 71 million (Global Business Guide Indonesia)
If you want to know more about the online global delivery business in Indonesia, this article will be worth reading.
Overview Online Global Delivery Business in Indonesia
In the proud movement Bangga Buatan Indonesia (BBI), people who own small businesses are encouraged to utilize the digital platform more massively so that e-commerce transactions will also increase. The gross market value (GMV) of e-commerce will also continue to grow from USD 32 billion in 2020 to USD 83 billion in 2025.
Along with this program, delivery services will certainly be boosted. A number of logistics business people are competing to provide the best commitment to business actors in marketing their products.
Siti Choirina, Director of PT Pos Indonesia, is dedicated to providing support and the finest service to consumers and business players, ranging from the largest corporations to Micro Small and Medium Enterprises (MSME).
Online Global Delivery Business in Indonesia
Today’s e-commerce or online commerce age necessarily aids in the development of shipping services. When we first heard about POS Indonesia for local delivery services, we were intrigued. Now, a variety of local delivery services, both old and new, have emerged to invigorate and popularize this industry. Here is a list of delivery services in Indonesia that are popularly used by a lot of people:
Apart from J&T and JNE, SiCepat is one of the most popular, and its presence provides an interesting option. Along with JNE and J&T, SiCepat is one of the companies with the fastest growing customer base. SiCepat is dedicated to becoming a trustworthy partner, especially for online and e-commerce firms, with the tagline “Your Delivery is Our Priority.”
2. Ninja Xpress
NinjaXpress is now available in Indonesia as part of a market development initiative that began in Asia and has since expanded to include Africa, America, the Middle East, and Turkey. NinjaXpress claims to be able to support up to 3,000 clients at any given time and deliver 15,000 shipments every day.
Lalamove is a service that allows anyone to get on-demand delivery at the touch of a button. Users can have access to a suitable delivery fleet and professional drivers through a single application. Lalamove has established itself as a strategic partner for a variety of enterprises looking to solve their remote shipping issues. Lalamove assists businesses from many industries in shipping according to their demands, ranging from stores, restaurants, retail outlets, and e-commerce enterprises.
Online Global Delivery Business Situation in Indonesia Due to Pandemic
The main challenge for courier services during the online shopping season, according to delivery companies, is increased demand for delivery in the middle of the pandemic.
The situation continued and was also complicated by the current pandemic situation. The process of shipping goods will not be easily given the potential or risk that triggers the interaction between the sender (courier) with the recipient of the item. On the other hand, the courier services in many regions of the country have expanded at a fast pace. The order shuttle businesses were flooded with orders because customers are reluctant to leave their homes.
In order to anticipate the increase in demand, courier service companies claimed to have carried out various preparations such as the addition of fleets, Human Resources (HR), equipment, to maximize the use of automatic sorting machines that can sort up to 1.5 million packages.
In addition, in the pandemic era, the courier service company applies a health protocol such as the application of 3M (using a mask, hand washing, maintaining distance), spraying disinfectants on goods sent and operational areas, and maximizing protection of employees in delivery for the convenience of employees and customers.
The Prospects of Online Delivery Business in Indonesia
One of the three largest Southeast Asian e-commerce platforms, Tokopedia has a significant presence in Indonesia’s digital economy. Tokopedia launched on August 17, 2009 with the mission to democratize commerce through technology. Collectively, Tokopedia has grown over seven times larger since 2015, with other growing players like BukaLapak and BliBli not far behind. With the growth of e-commerce in Indonesia, the courier and delivery service is also rising.
In 2020, the advancement in technology pushed Indonesia’s internet penetration to 73%, compared to that of five years ago at 43%. Thus, the number of online shoppers will continue to grow and the logistic industry must fulfill the needs of 270 million people in the country. In addition, Indonesia’s market has attracted many tech giants like Alibaba, who entered Indonesia through Tokopedia by 2020. Amazon, the American multinational technology company, has also shown interest in expanding its business in Indonesia (The Jakarta Post).
With the rise of e-commerce in Indonesia, there will also be a need for faster and more efficient logistics. This led a number of local companies, foreign investors, and developers to race in the competition to take the first-mover advantages. These years, big institutional investors like GIC and regional logistics developers such as LOGOS and ESR have expanded to Indonesia. (Mordor Intelligence).
Indonesia is seen to be the next big thing in Asia’s e-commerce market after China, and the logistics sector should thrive from it.
How to Open Delivery Business in Indonesia
There are two regulations that are important to know before opening the expedition business. The first is the Regulation from the Ministry of Transportation, Republic Indonesia Number 49:2017, concerning the Implementation and Management of Transportation Services. The second is the Regulation from the Ministry of Communication and Informatics number 7:2018, concerning Electronically Integrated Business Services in the Communication and Information Sector.
Beside that, there are also things that need to be prepared in the management of an expedition service business permit include:
- Application letter which is accompanied by stamp duty
- Identity of the applicant
- Deed of Establishment and Amendment
- Taxpayer Identification Number
- Indonesian Experts, minimum Diploma 3 in Shipping/Maritime/ Aviation/Transportation/IATA Diploma/FIATA Diploma, S1 Logistics or certificate of professional competence in Forwarder or Supply Chain Management or Customs or Port expert certificates (alternative or cumulative)
- Have an authorized capital of at least IDR 1.2 billion, and at least 25% of the authorized capital must be issued and fully paid up with a valid proof of deposit or audited by a public accounting firm
- Have a certificate of ownership of office building for at least 2 years
- A technical proposal that is accompanied by:
- Description of owning or controlling an operational vehicle of at least 4 wheels as evidenced by certificate of ownership or legal lease
- Description of owning or controlling a parking lot or pool
- Description of owning a system of software and hardware equipment facilities as well as information and communication systems that are integrated with land, sea, air, rail transportation information systems in accordance with technological developments (smart legal.id)
License Related to Indonesia’s Delivery Business
To open an online delivery business in Indonesia, a company must have the principal license. A principal license is a license granted to a courier services company in Indonesia with reference to patent rights. It gives the company the legal rights to exclude both within Indonesia and beyond, from making, using, selling, and importing an invention similar to its own.
A company should have the inter-city license as well. Inter-city licensees grant permission to courier companies to open their business between different cities in the country.
The last is an agent license. This license allows the courier service company to enlist the services of an agent. These agents will do business activities from the courier service company with either local or foreign clients.
BRIGHT Indonesia as The Right Local Partner
BRIGHT Indonesia is an excellent business partner for you. On the ground, we’ll help you with everything from virtual assistants to logistical planning and communication of every aspect. It might help your organization focus on creating partnerships rather than worrying about the hassles of business travel.
BRIGHT Indonesia offers a variety of services, including Business Partnership Engagement, Management and Strategy Consulting, Foreign Direct Investment Promotion, Business Registration and Establishment, and Market Insight Research, to assist you in growing and developing your business by identifying potential partners and obtaining a work and stay permit in Indonesia.
Our strategy consulting services are focused on assisting private sector clients with the development of corporate/business unit strategies, as well as public sector organizations with public policy, training, and assisting our clients with entering FDI source countries to attract investment for their local markets.
We will also assist your firm with the registration of a representative office with trading rights and limited liability foreign-owned firms, as well as a detailed report of market insight study.
For more information, email email@example.com.
*This article is written by @candy and @debora