Tokopedia highlights the importance of research validation and working with local partners for its localisation strategy

As a nation, Indonesia is so diverse that it is often said that expanding to Indonesia is equal to expanding to 34 different markets at the same time, as each province possesses its own unique nature and challenges.

Several Southeast Asian startups that had been aiming for Indonesia in their expansion plan have had to retreat and reconsider their strategy once they realised how big this market actually is.

Localisation itself has always been championed as a crucial part of a company’s expansion plan — and what better ways to learn about localisation strategy, particularly in marketing, than those who had done it well?

Enter Tokopedia, one of Indonesia’s four unicorns and the country’s leading e-commerce, fintech, and digital products platform.

By November 2018, the platform had secured over 90 million monthly active users and reached out to 93 per cent of districts in the archipelago.

As it enters its first decade, Tokopedia is being run by 2,800 employees, with over 100 million products listed on their platform. It is being used by four million merchants to facilitate promotions, sales, and transactions.

To get a better understanding of how the company builds its localisation strategy,  e27 sits down with VP of Brand and Marketing Andi Djoewarsa, who explains the idea and process behind their moves.

Also Read: Tokopedia reportedly raises fresh US$1 billion funding

Embracing changes

Djoewarsa begins our conversation by pointing out how the term artis ibukota — glamorous celebrity from the capital city of Jakarta — does not appear so often anymore in daily conversations among Indonesians.

“This is because every person, every city [in Indonesia] has their very own unique identities. Jakarta used to be the centre of fashion and entertainment, but nowadays youths in Bandung or Jogjakarta do not wish to be compared to Jakarta anymore. Even in Cirebon, [businesses] are selling different products than those in Jakarta. Their radio stations are playing the different Top 40 hits,” he said.

“Their preference has experienced an evolution, and it is thanks to the internet,” he stressed.

This is why, in building its localisation strategy, first and foremost Tokopedia puts an emphasis in identifying these changes, before the company can finally get to start developing a plan.

“Everybody is now connected to each other; what we thought we knew about people and their stereotypes has become a blur. You may not know who your next-door neighbour is, but you may know someone in Celebes who likes photography as much as you do. These changes make everything more complex and personalised, and it all happened because of technology,” Djoewarsa said.

Online and offline

Tokopedia’s localisation strategy is being divided into two fronts: the online through the platform, and offline through the initiatives that the company is making to reach out to its (potential) users.

Djoewarsa explains that the platform itself has already been able to localise on an individual level by implementing deep learning, and understanding the tastes and preferences of each users through their searches on their platform.

Also Read: Happened in Indonesia: Tokopedia launches new app, Sikumis raises follow-on funding

“When the platform is smart enough … marketing will be all about justifying why we are operating in Indonesia,” he says.

On the offline side, Tokopedia has been running MAKERFEST, a curated marketplace and exhibition of products and ideas by small businesses in eight cities in Indonesia.

Having received applications from 1,500 small businesses, Tokopedia then shortlisted them into 24 finalists, with three businesses representing each city. The event is set to peak on December 15-16, when Tokopedia is going to name the three winners. The first prize winner will receive an IDR1 billion (US$70,000) cash prize; all finalists will also receive a mentoring on everything that they need to know about starting a business — from marketing to products photography.

“We designed MAKERFEST in such a way that it is able to represent regions outside of Jakarta, enabling merchants to gain greater exposure,” Djoewarsa describes.

In running MAKERFEST, Tokopedia is working together with various local partners. Apart from local event organising companies, which helped Tokopedia identify local trends in running a successful event, the company also works with TopCommunity, a community of merchants who are selling their products on its platform.

“TopCommunity helps us by encouraging their friends to become part of Tokopedia. Two days before every MAKERFEST, we arrange a meeting with them to have a two-way dialogue about how to run a business better,” Djoewarsa says.

The DNA

So what are the processes that Tokopedia had to go through before coming up with initiatives such as MAKERFEST?

Djoewarsa explains that there are three points that are being considered as part of the company’s DNA: Consumer-centrism; make it happen and make it better; and growth mindset.

Also Read: Tokopedia, OVO team up to offer the payment service on the e-commerce platform

“Before we think about revenue, we need to think about which part of consumers’ pain points that we have managed to solve? The more problem we solve, the stronger our economy is, as we do not only care for our platforms,” he says.

“Localisation is aimed to solve this problem,” he adds.

He further explains the four points that startup founders need to consider before building their strategy.

1. Your positioning as a brand

“What are the things that you have promised to give to the society?”

2. Your differentiation

“What kind of differentiation do we need in order to build that positioning?”

3. Your competitor(s)

“What are the things that they offer that we have not managed to offer yet? How can we close this gap, in order to fulfill our customers’ needs?”

4. Your customers’ needs

“There are internal factors that we can get hold of, and external factors that we have no control of. Here are the things that are within our control: Our technology, marketing, distribution, our DNA. While the things that are beyond our control are the macroeconomy, political sentiments, competitors’ movement. You need to be able to look at these two things before coming up with a plan.”

Research is certainly a crucial part in building a company’s localisation strategy. Coming in both qualitative and quantitative forms, Djoewarsa warns against being too dependent on what is written on paper.

“It is still very important to get on the fields to validate the data,” he says.

“We are often being trapped in a system where we were led to believe that we know it all, just by looking at the numbers of PowerPoint,” he elaborates.

Also Read: Tokopedia expands fintech offering with the launch of gold trading service

Growing pains

When asked about the greatest challenge that the company has faced in building their localisation strategy, Djoewarsa says that the hardest part is actually in executing the plan itself.

“You can build strategy based on the things that you have done before, especially since we have been running for almost 10 years now. We already have all the data, as we happen to be an e-commerce company,” he says.

In building its localisation strategy, and running the business in general, Djoewarsa pointed out that there are three things that startup founders need to avoid: Getting tired to easily, having lack of grit, and discontinuing their own learning process.

“Realistically, if they have never made any mistake, then it would be impossible for them to make progress. It is all about how to learn from these mistakes,” he closes.

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This article was first published on e27 on December 12, 2018.

Image Credit: Tokopedia

The post How Tokopedia uses localisation strategy to reach out to Indonesia’s uniquely diverse society appeared first on e27.