In 2015, e27 spoke to Tokopedia to understand their plans and vision for the Indonesian market. In our interview, co-founder William Tanuwidjaja spoke of their ambition to expand their reach to the eastern part of the archipelago.

Today, in 2023, the company has finally managed to reach that goal.

From August 2022 to July this year, Tokopedia shares the following data:

– Areas with the highest increase in the number of sellers, especially outside of the Java island, are Southeast Aceh (Aceh), Padang Lawas Utara (North Sumatra), Malacca (East Nusa Tenggara), Central Buton (Southeast Sulawesi), and Teluk Bintuni (West Papua), with an average increase of almost four times.

– Areas with the highest increase in the number of transactions are Natuna (Riau Islands), North Lombok (East Nusa Tenggara), Deiyai (Central Papua), Arfak Mountains (West Papua) and Nduga (Mountain Papua), with an average increase of 8.5 times.

It also recorded that almost three-fourths of the inter-island transactions on the platform over the past year used Free Shipping, just one of the features that Tokopedia offers for sellers on their platform.

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“When it comes to utilising tech, this is where things become interesting because Indonesia is quite unique in that the market does not start off with desktop; it jumps straight to mobile devices. We need to incentivise and educate the users to be more familiar with using mobile devices for e-commerce,” says Puput Hidayat, Vice President of Seller Experience, Tokopedia, in a call with e27.

“With the 14 million sellers that we have across Indonesia today, they all have varying levels of digital literacy. Some are familiar with the internet through socials and other apps; others are completely new. There was a time around two years ago when we did field outreach to sellers, they would ask us questions such as where to download apps.”

Hidayat leads a team responsible for sellers’ experience on the Tokopedia platforms, strategising to help them grow sales.

“Before the pandemic, we focused more on the adoption of the tech itself due to many sellers’ reluctance to embrace online selling. There is a stigma that prices on e-commerce are lower, which will negatively affect margins. Online is also believed to be more costly as sellers also have to cover shipping fees,” Hidayat explains.

“The pandemic provides a blessing in disguise because sellers are forced to adapt to tech, to move online as they can no longer rely on offline alone. That is where we see tremendous growth for seller adoption, especially in cities where we originally had no presence, especially in Sulawesi and Maluku.”

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With adoption no longer being a challenge for Tokopedia, the company was now able to focus on other areas, including how to help sellers understand which area to invest more in and where they can improve themselves.

“This is where the data part of the equation becomes important. With this massive amount of users and activities in the platform, we can also see behaviours that are helpful for sales, and vice versa,” says Hidayat.

“This is why, post-pandemic, many innovations that we did are more related to data utilisation. For example, by using analytics tools to understand sales performance and how to advertise their products best, with what kind of campaigns.”

Hidayat names self-service features on the Tokopedia platform, such as its Fitur Wawasan (Insights Feature), as one example of its use of data.

“This might seem simple for the users, but this is the result of machine learning tech that we implement in the back-end. AI is a big theme this year, but the fundamentals are already being implemented here in the platform that we eventually translate into user experience. This is what we continuously improve in the later years after we experience a boom of adoption,” Hidayat stresses.

Bringing sellers on board the Tokopedia platform

The existence of these features helps Tokopedia attract sellers to its platform, something that is directly related to its business model.

“When it comes to business model, it has to enable both sellers and us to grow together. The barrier of entry to selling on Tokopedia is very low; it’s free to start selling on our platform. However, as business becomes more competitive, sellers might require more features to increase their competitiveness. This is where they can opt-in for membership services PowerMerchant and Official Store,” Hidayat explains.

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In addition to developing its own solutions to support sellers, Tokopedia also collaborated with other parties, such as the local government, to develop an empowerment programme for SMEs.

“That way, we do not just place the features on our platforms without having the sellers know about it,” says Hidayat.

In the future, following its IPO in 2022, Tokopedia aims to continue on utilising the latest tech in its product development.

“We have massive data that we can use to create predictive analytics through machine learning, and we use them for our Fitur Wawasan,” Hidayat closes. “This is to help strengthen our zero-barrier approach to e-commerce for our sellers.”

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Image Credit: Tokopedia

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