How Tokopedia democratizes logistics for Indonesian businesses

By handling the logistics and fulfillment aspects of ecommerce, Tokopedia enables its sellers to focus on growth.

When the world was put in lockdown, the already complicated cross-border supply chain was in dire straits. Matching supply to demand became even more challenging, and even simple deliveries were troublesome. Logistics companies had to find ways around overseas sourcing to meet consumer demands, and many turned to new technologies to optimize processes and strengthen supply chains amid the chaos.

In Asia, Indonesia was one of the worst hit. Even before the pandemic, logistics in a nation made up of thousands of islands proved tricky, as shipping costs and durations to and from one island to another vary extensively.

Ecommerce, fulfillment, Indonesia, logistics, Shipping, tokocabang, Tokopedia

A logistics yard at Jakarta’s Tanjung Priok port / Photo credit: 123rf

Case in point, the average consumer residing in Indonesia’s small islands may find it cheaper and more effective to buy online from sellers in Hong Kong or China, something that puts local Indonesian businesses in jeopardy. Products from abroad are usually transported on ships directly to the warehouse closest to the consumer, instead of being passed along from warehouse to warehouse on trucks in a literal game of pass the parcel.

And given that quality products and speedy deliveries are one of the factors to success for small business owners in Indonesia, trying to get items to consumers on time is crucial. But for these sellers, that’s a massive challenge: One day, you have a handful of orders, and the next, it can spike up to two to three times of the daily volume. Orders are also never concrete, as consumers can change their minds.

Not all small businesses are well-equipped to handle this unpredictability, especially now with Covid-19 in the picture.

Changing the status quo

Fulfillment service TokoCabang, which was introduced by Indonesian technology company Tokopedia in 2019, is gunning to remove operational barriers for sellers in logistics and fulfillment. It allows merchants on its platform to store their products in a portable network of fulfillment centers and ties up with various logistics partners to support sellers in delivering those products to consumers.

By doing so, TokoCabang helps transform fixed costs into variable ones. Previously, merchants would have to hire enough staff to manage large spikes in order volume, even though they weren’t certain of when these spikes would occur.

Ecommerce, fulfillment, Indonesia, logistics, Shipping, tokocabang, Tokopedia

Photo credit: Tokopedia

Using the service instead allows them to offload the responsibility of processing and fulfilling orders to TokoCabang, enabling them to focus on improving products or growing the business.

“If you manage operations out of a small warehouse or your living room, and business is growing greater than what your current facility permits, TokoCabang is there to help you offload those responsibilities,” explains Erwin Saputra, associate vice president of fulfillment at Tokopedia.

Merchants on Tokopedia also have access to tools that make their operations more efficient and allow them to manage their inventory better.

Among other things, TokoCabang’s inventory management and analytics tools give retailers an overview of information such as what inventory is stored at the warehouse, how long they’ve been stored there, and which cities orders are coming from. Users can also match supply to demand by placing items at warehouses near where consumers are.

Ecommerce, fulfillment, Indonesia, logistics, Shipping, tokocabang, Tokopedia

Erwin Saputra, associate vice president of fulfillment at Tokopedia / Photo credit: Tokopedia

For customers, TokoCabang’s goal is simple: an equal logistics experience across Indonesia.

“It doesn’t matter if you’re a consumer in Medan or Makassar. Eventually, you should be seeing the same selection of products and be able to get these products at consistent speeds and reasonable costs,” says Saputra.

Bypassing roadblocks

TokoCabang fulfills orders quicker and more accurately than the top 1% of sellers who handle their own fulfillment processes, claims Saputra.

However, in its early days, the fulfillment service had some teething problems. The company promised sellers same-day deliveries but had issues in making these shipments, especially when big campaigns were in progress. Maintaining stock accuracy was also difficult, as TokoCabang tried to support all the different campaigns sellers were pushing out.

This was where Tokopedia’s expertise in technology played a role. By merging analytics and other tools such as inventory management systems with the physical aspect of logistics, it was able to consistently grow, scale, and improve TokoCabang’s systems.

“Over time, especially over the past year, we’ve improved the warehouse system and the integration with Tokopedia, and we’ve upgraded our campaign system as well,” says Saputra.

Ecommerce, fulfillment, Indonesia, logistics, Shipping, tokocabang, Tokopedia

Photo credit: Tokopedia

Today, nearly all orders made on Tokopedia before 4 pm can be fulfilled on the same day, he shares. Consumers are able to receive their orders via ride-hailing courier services, which are made possible through TokoCabang’s fulfillment centers.

With the pandemic, the service has seen more merchants gravitating to its platform to address their logistical challenges. Saputra shares that orders processed by TokoCabang have more than doubled from the first quarter of 2020. The service has also been able to keep pace with the demands of ecommerce despite changes caused by Covid-19, such as when one of the largest book fairs in Indonesia moved online last year.

More than just faster shipments, retailers are seeing other benefits of using TokoCabang.

“[One mobile accessories distributor] was able to expand his business and build a brand presence in cities like Bandung, Palembang, Medan, Makassar and Surabaya,” says Saputra. “They could also process and deliver orders to customers in those cities on the same day, just like they could in Jakarta.”

What’s next on the journey

Since its launch, TokoCabang has seen tremendous business growth. Saputra says it’s all thanks to the technology it uses to serve sellers – something it’s continuously working on elevating to optimize supply and demand.

“I would say we closed last year having achieved operational and technological improvements at a standard that we can be proud of,” says Saputra.

The next part of the journey? Helping merchants on their path to expand their businesses.

“We want to democratize commerce through technology in Indonesia by enabling consumers to get items faster, while also empowering our sellers by letting them know where they may have further business opportunities,” he adds.

In the upcoming quarter, Tokopedia’s network of couriers will be merging with TokoCabang’s fast fulfillment services to form a free shipping program with quicker deliveries than what Tokopedia currently offers. Items leaving the TokoCabang warehouse will also be eligible for free one-day delivery for intracity shipments and two-day delivery for major cities in Indonesia.

“When consumers across Indonesia buy something that’s fulfilled by TokoCabang, they will get a superior end-to-end delivery experience – that’s what we’re trying to achieve next quarter,” Saputra says.


Tokopedia is an Indonesian technology company with the country’s biggest marketplace. Its mission is to democratize commerce through technology.

Find out more about Tokopedia on its website.


This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.

News Related

OTHER NEWS

Da Nang invests over $653 million to enhance environment

Authorities in the central city of Danang have announced a project to make the city an environmental city during the 2021-2030 period. Danang launches a project to make the city an environmental city… Read more »

Nearly 130,000 mobile subscriptions delivering spam calls deactivated

As many as 128,970 mobile subscriptions that delivered spam calls and messages have been deactivated since last July, according to the Vietnam Telecommunications Authority under the Ministry of Information and Communications. A subscriber… Read more »

Chinese greentech firm launches smart charging robot for EVs

Chinese greentech firm Envision Group unveiled a new electric vehicle charging robot fully powered by green electricity. Called Mochi, the device will be commercially available starting in June this year, according to a… Read more »

Workshop looks into opportunities, challenges in digital transformation

Illustrative image (Source: internet) HCM City (VNA) – A workshop was held in Ho Chi Minh City on April 23 to discuss opportunities and challenges facing firms amid digital transformation. It was co-hosted… Read more »

Indonesia’s ecommerce logistics giants brace for a price war

Unlike their ecommerce partners with their glitzy billion-dollar valuations, Indonesia’s third-party logistics companies mostly stay in the background. But that has changed in the past few months. First, SiCepat raised a US$170 million… Read more »

Sources: Gojek, Tokopedia to form combined company Goto once $18b merger is finalized

“Gojek and Tokopedia, two of Indonesia’s biggest internet companies, are finalizing their US$18 billion merger to create a giant in ride-hailing, food delivery, and ecommerce,” The Information reported, citing people familiar with the… Read more »

Shopee Indonesia denies claims of underpaid in-house couriers going on strike

Shopee Indonesia denies claims that couriers from Shopee Express, its in-house logistics arm, went on strike in protest of recent adjustments to their fee schedule, leading to delivery delays. Handhika Jahja, Shopee Indonesia’s… Read more »

Singapore accelerator selects 11 pre-series A startups for its fourth cohort

Singapore-based accelerator Accelerating Asia announced it has selected 11 companies as part of the fourth cohort of its flagship 100-day program for pre-series A startups. Founders Amra Naidoo and Craig Dixon/ Photo credit:… Read more »

Should Grab and Gojek drivers be considered employees, not contractors?

Drivers on super apps like Grab and Gojek are called “partners,” but the reality is that this relationship is hardly equal. Hendry, a full-time ojek driver in Tangerang Selatan, a city 30 kilometers… Read more »

Indian edtech major Byju’s eyes global markets, to launch in Indonesia by May

“India’s edtech leader Byju’s is now turning its attention to international markets with a one-to-one learning platform called Byju’s Future School,” Entrackr reported. Details: The platform will be launched in USA, UK, Australia,… Read more »

Indonesian agritech is pandemic-proof, but here are the warning signs

Indonesia’s agriculture industry is proving to be pandemic-proof. The country’s Central Statistics Agency (Badan Pusat Statistik) recorded that agricultural exports went up by a little over 14% between 2019 to early 2021, with… Read more »

Ex-Sunseap Group exec’s startup to raise $100m for its battery-swap business

Oyika, a Singapore-based startup aiming to lower the barriers to electric vehicle adoption in developing countries, said it is raising US$100 million for its energy-share business in Southeast Asia. The company neither specified… Read more »

Eduardo Saverin’s B Capital Group launches $415m fund, enters China

Facebook co-founder Eduardo Saverin’s B Capital Group announced the close of a US$415-million fund on a new investment category within the firm. However, the company didn’t specify if this would be the first… Read more »

Will ShopeeFood bulldoze its way into Indonesia’s food delivery scene?

The motorcycle jackets are out and so are the Instagram ads – Shopee has quietly launched ShopeeFood in Indonesia. Food delivery is not new territory for its parent firm Sea Group, as shown… Read more »

The untold truth of tourism’s post-lockdown ‘recovery’

Unless you had a valid reason to travel for work in the past year, you likely had to swap out that beach vacation for a staycation or a trip to the local zoo.… Read more »

Letter to readers: Indonesia’s final frontier

Dear readers, I watched a fair bit of Star Trek growing up. I still do. There’s something about venturing into a new frontier that appeals to me. But it’s all escapism. In the… Read more »

SEA remains a top market for tech recruitment despite rising compensation packages: study

Southeast Asia remains an attractive market for tech companies to secure talent, despite increasing compensation packages within the region, a report from Monk’s Hill Ventures and Glints showed. Lim Kuo-Yi, managing partner of… Read more »

Deep Dive: Behind Sea’s latest moves

Over the past few weeks, one company that has frequently been hitting the headlines is Singapore-headquartered Sea. As the biggest Southeast Asian internet business, dwarfing startups and listed companies alike in valuation, every… Read more »

How hospitality startup RedDoorz saw record revenues despite Covid-19

With additional reporting by Aditya Hadi and Terence Lee. As the Covid-19 pandemic unfolded last year, Singapore-based hospitality startup RedDoorz posted record revenues, according to a recent report by growth equity firm Asia… Read more »

Alleviating rural Indonesia’s FMCG issues

Every day, 100k+ smart people read our newsletter. You can sign up here. Hello readers, I ran out of milk for my cereal a couple of days ago. I’m ashamed to admit that,… Read more »

Covid-19 has equalized digital competitiveness across Indonesia’s provinces, says East Ventures report

The accelerated digital transformation brought on by the Covid-19 pandemic has equalized the digital competitiveness across provinces in Indonesia, a report from East Ventures noted. Photo credit: Pexels The East Ventures Digital Competitiveness… Read more »

A startup looks to become Indonesia’s next big consumer goods brand

In their previous jobs, Wilson Yanaprasetya and Ryan Manafe got a firsthand look at Indonesia’s struggle to modernize, especially in areas outside the major cities. “Most of Indonesia looks nothing like Jakarta,” says… Read more »

How LinkAja can help Grab and Gojek fend off ShopeePay

LinkAja has done something that Grab and Gojek couldn’t do themselves: Thanks to the Indonesian digital wallet, the rival super apps have laid down their arms and joined the same company as shareholders.… Read more »

Sources: Facebook’s payments partnership with Gojek affected by delays

“Facebook’s partnership with Indonesian technology startup Gojek has been hit by delays, stalling the US technology company’s expansion into one of the world’s biggest social media markets,” reported the Financial Times, citing sources… Read more »

How Disney+’s Indonesian rivals plan to fight back

The total viewing time spent by video on demand (VOD) service subscribers in Indonesia has reached 3 billion hours per month, according to research conducted by digital marketing firms TradeDesk and Kantar. The… Read more »

99.co appoints former ProperGuru exec as deputy CEO for Indonesia

Southeast Asian proptech firm 99.co said it has named Wasudewan as the company’s new deputy CEO for its Indonesia unit. Darius Cheung on stage at Tech in Asia Jakarta 2017 / Photo credit:… Read more »

Indonesia to introduce rules to prevent predatory ecommerce pricing, sources say

“Indonesia will issue a regulation to prevent predatory pricing on ecommerce platforms, including for Chinese goods, a minister said on Thursday, as President Joko Widodo urged consumers in Southeast Asia’s biggest market to… Read more »

His startup was acquired by Ovo. Now, he wants to build a global F&B brand

In March 2019, Abraham Viktor joined Ovo after selling Taralite, the peer-to-peer lending startup he founded, to the Indonesian fintech unicorn. But just three months later, he packed his bags and left. “At… Read more »

What’s powering GudangAda’s growth?

Indonesia is on the road toward digital transformation. According to McKinsey, embracing digitalization would help the country reach new levels of economic growth, adding an estimated US$150 billion to its gross domestic product… Read more »

Grab aids Indonesia’s Covid-19 vaccination push via drive-through service

“Southeast Asia’s ride-hailing giant Grab is setting up drive-through vaccination services across Indonesia in collaboration with the government to help the nation inoculate more than 180 million people against Covid-19,” Bloomberg reported. Details:… Read more »

Report: Traveloka plans to launch fintech services in Thailand and Vietnam

“Traveloka, Southeast Asia’s largest online travel startup, plans to launch financial services in Thailand and Vietnam as it eyes a US listing through a blank-cheque company,” reported Reuters, citing the company’s president. Details:… Read more »

Warung Pintar acquires B2B ecommerce firm Bizzy Digital in $45m deal

Indonesian microretail startup Warung Pintar announced that it has acquired Bizzy Digital, an integrated business-to-business ecommerce firm, for US$45 million. Bizzy Group CEO Andrew Mawikere / Photo credit: Bizzy The companies, however, didn’t… Read more »

TikTok ramps up ecommerce hiring in Indonesia, Singapore

Short-video platform TikTok has started hiring for its ecommerce service in Indonesia and Singapore, opening positions across several areas. Photo credit: Pikist Listing the jobs a week ago, TikTok is mostly looking for… Read more »

How Tokopedia is raising the bar for financial literacy in Indonesia

How do you raise the quality of life for Indonesia’s 275 million residents? In a country where an estimated 66% of citizens are unbanked, the answer lies in fintech. That’s what some of… Read more »

Report: Oyo to lay off half its Latam unit staff as SoftBank exits partnership

“The Latin American unit of Indian hotel startup Oyo Corp has ended its joint venture with the SoftBank Latin America Fund, less than six months after they struck a partnership in the region,”… Read more »

99.co sees 62% surge in 2020 revenue amid Covid-19 setbacks

Finding a new home, whether to own or to rent, can be a daunting and time-consuming process. At a time when visiting a physical site is a real challenge, Singapore-based real estate portal… Read more »

Sea’s shadow looms over a Gojek-Tokopedia merger

As Gojek and Tokopedia face strong competition at home, a merger would refresh their narrative – and prime them for a public listing. But it would also put the merged entity right in… Read more »

Will Ovo complicate a Gojek-Tokopedia merger?

If it pushes through, the Gojek-Tokopedia merger would be a significant event in its own right. But the deal could also put into question an established alliance in Southeast Asia’s tech industry. At… Read more »

Edtech needs to do some soul-searching as it powers ahead

“It’s like a superpower. I feel like I can solve any problem in the world,” says Shresth Kant, a 13-year-old from the North Indian city of Mohali, Punjab. Kant’s enthused conversation about coding… Read more »

Disney+ Hotstar pulls in 2.5m subscribers in Indonesia, surpassing Netflix

Total paying subscription video-on-demand (SVOD) customers for the top 10 operators in Indonesia reached roughly 7 million, with Disney contributing a significant chunk to that number. According to research platform Media Partners Asia… Read more »

Is the IDX ready for tech listings?

Every day, 100k+ smart people read our newsletter. You can sign up here. Hello readers, When the term “IPO” is brought up, ringing the bell at the New York Stock Exchange is probably… Read more »

Sea Group commissioner: Why now is the time for local unicorns to IPO

The rumors of Indonesian companies planning to carry out an initial public offering are growing louder. Tokopedia, Gojek, Traveloka, and Bukalapak are prominent examples. The drying up of private market capital could be… Read more »

GrabToko founder arrested by police on the charge of online scamming

“Founder of Indonesia-based electronic ecommerce GrabToko, Yudha Manggala Putra, has been arrested by local police on the charge of online scams and money laundering,” reported Kompas. GrabToko is an ecommerce company that sells… Read more »

Indonesia’s GrabToko reported an investor to the police for embezzlement

“Indonesia-based electronic ecommerce firm GrabToko claimed that its investor has embezzled the company’s money,” reported CNBC Indonesia. GrabToko is an ecommerce company that sells new Android smartphones and iPhones at a steep discount.… Read more »

The supporting cast in Indonesia’s ecommerce boom

Every day, 100k+ smart people read our newsletter. You can sign up here. Hello readers, I love online shopping. There’s just something magical about buying an item online and having it appear at… Read more »

Indonesian shipping firm Sicepat raises $50m in series B funding

Indonesian logistics firm Sicepat Ekspres raised US$50 million in a series B funding round from Praus Company. Photo credit: tomas1111 / 123RF The new financing round gives the Indonesian company a post-money valuation… Read more »

Indonesian fintech firm Finantier secures Y Combinator backing

Finantier, a fintech firm based in Indonesia, said it has received an undisclosed amount of funding from US startup accelerator Y Combinator. Finantier CEO Diego Rojas (left) and chief product officer Keng Low… Read more »

Edfintech is changing Indonesia’s unaffordable education system

Every day, 100k+ smart people read our newsletter. You can sign up here. Hello readers, Growing up in Singapore, I’d never even thought of education as a privilege. Moving from kindergarten all the… Read more »

Traveloka evaluates merger with SPAC route to go public, report says

“Traveloka, Southeast Asia’s largest online travel app, said on Monday it was looking to go public soon and was evaluating a merger with a special purpose acquisition company (SPAC) as a possible stock-market… Read more »

Why ‘edfintech’ is ripe to thrive in Indonesia

Annisa is a communications student at one of Jakarta’s top private universities. But the economic disruption caused by Covid-19 cut into her family’s income, and she was unable to pay her school fees… Read more »