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Tech Boosts Indonesia’s Informal Sector

One of the distinctive features of the Indonesian tech start-up ecosystem is its close relation to the informal sector. Tech companies are continuously providing platforms to let their customers embrace the digital era. These start-ups have raised a great amount of funding and made a difference in the ways Indonesians are using these services.

Today, another start-up is getting ready to innovate with the informal sector. The app aims to transform how customers interact with travelling food vendor or locally known as “pedagang keliling”. Commonly found in both urban and suburban areas, food sellers travelled by foot, bicycle, or motorbike to offer their products directly to customers in their residences. They usually use a modified cart to carry and prepare their products.

A notable part of Indonesian street food culture, the “pedagang keliling” provides a level of convenience that can only be rivalled by food delivery services. But there is one simple barrier to accessing these services: sometimes, people might just miss them. This is something that the tech developer has experienced many times before.

According to the developer, there is a segment in the culinary industry that remains untouched by digital innovation, and that is travelling food vendor. Often, people wait for their favourite street food sellers, but they miss them –simply because they fail to hear them coming or they happen to be away from home. Therefore, the company is building an on-demand feature that enables customers to check and summon food vendors in his area.

The service is available as a mobile app and via a messaging app. In addition to travelling food vendor, customers can also use the app to order frozen or packaged food from sellers in other cities. The start-up says that it has secured 3,800 culinary merchants onboard its platform. To acquire its users –from customers to merchants to couriers, the app utilises omnichannel marketing strategies. It also plans to team up with cooperatives and local businesses to grow its presence in Indonesian cities.

The platform is currently undergoing the testing process and is set for a launch in Q1 2021. In its debut, the app will be available for users in Greater Jakarta Area and Bandung.

In the future, the app wants to expand its offerings to include other services including airline ticket booking and even vehicle registration number extension. It also believes that working with travelling food vendor will open the door to many great opportunities.

However, the tech developers have yet to find a platform or registry that keeps a record of the number of travelling food vendors in Indonesia. If they can seize this opportunity, this segment will be able to compete with others in the culinary industries, they added.

As reported by OpenGov Asia, the use of digital technologies has experienced significant growth in Indonesia in recent years. This trend has accelerated since the COVID-19 pandemic began, with face-to-face services forced to close or dramatically cut their hours and visitor numbers to reduce the spread of the virus. Further, there has been a lot of interest in Indonesia’s booming tech sector – both domestically and from overseas. Indonesia is slated to have three new unicorns – a privately held start-up company valued at over US$1 billion – in the next five years. Currently, Indonesia has one decacorn or start-up with a valuation of more than US$10 billion and four unicorns valued at over US$1 billion.

Based on research from a survey of over 2,100 end consumers and 1,100 retailers in 23 cities along with and interviews with stakeholders in 13 cities, these massive start-ups could come from the three sectors – e-commerce, fintech and digitisation of Micro, Small and Medium Enterprises (MSMEs).

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