February 22, 2024

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Indonesian FMCG sector gets digitally empowered

Image courtesy: www.techinasia.com

According to an international management consulting firm, Indonesia is on the road to digital transformation. Embracing digitalisation would help the country reach new levels of economic growth, adding an estimated US$150 billion to its gross domestic product by 2025.

One area that is ripe for digitalisation is the fast-moving consumer goods (FMCG) sector, which runs on a fragmented and convoluted supply chain. Moreover, as the country constitutes 40% of Southeast Asia’s (SEA) total population of 664 million people, research says that with relatively young and productive individuals currently comprising the nation’s biggest demographics, the country has a growing base of captive consumers for FMCG in the region. Therefore, Indonesia is an extremely important market for the FMCG sector within SEA.

Several start-ups have tried to digitalise the sector, but the going has not been easy. Companies have come up against roadblocks like the digital divide and conflicts with incumbent distributors. Considering this, a business-to-business FMCG marketplace firm is trying to tread down a different path. With over 300,000 merchants across 500 cities in Indonesia using its platform, they processed US$1 billion in transactions in 12 months as of March 2020 – 2% of the US$50 billion that is transacted in the country’s FMCG space annually. It has also raised US$35.9 million from investors to date.

The firm decided to take a combined online-offline approach given that a lack of knowledge and awareness is one of the biggest barriers to digitalisation in Southeast Asia, They said that most start-ups aim to resolve the challenges faced by the FMCG sector by focusing only on providing digital solutions for transport and commerce. However, the FMCG market is hard to penetrate as traditional wholesalers and retailers are not familiar with technology and prefer traditional methods of distribution and trading.

One of their alternative approaches is to tackle the challenges in the FMCG supply chain. According to the firm’s chief technology officer, their programme works as a marketplace where wholesalers can list their products and where retailers can purchase through an app. They added that they are not displacing any of the existing industry stakeholders in the FMCG industry, but they build the tools and the platforms for these stakeholders to run more efficiently.

In response to this, the B2B marketplace also runs a program to educate merchants on the merits of digitalisation. This process continues even when traders become members. The company provides training on business digitisation, helping merchants plan shop inventory, conduct faster transactions, and determine the best prices for their goods. Currently, the firm has over 600 people in its business development team spread across more than 500 cities in Indonesia.

They also intend to build an ecosystem to support the merchants on its platform. On top of its marketplace services, the platform also incorporates delivery and payment offerings as well as a logistics feature, which was launched after the firm received feedback from merchants that delivery was a particular sticking point.

The firm’s payment services, meanwhile, is their answer to the relative nascence of the digital payments sector in Indonesia, which is a significant barrier to the digitalisation of more traditional suppliers and retailers. They also said that the payment infrastructure in the country is not fully developed yet, so they provide escrow services to help sellers and buyers transact.

Accordingly, an international report says that technology and innovation can further help the country along with its business sectors to recover from the effects of the pandemic. Lockdowns have channelled many people online for shopping, learning, entertainment, and working, accelerating the shift to digital services. Simultaneously, companies are pushing ahead with internal digitisation for staff, customers, and suppliers, for instance, enhancing supply-chain visibility, offering digital learning experiences, and providing new channels to customers.

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Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

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CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

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Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

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SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

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HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

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IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

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