As the Covid-19 shutdown continues in Indonesia, two types of basic food markets are experiencing change in contrasting ways – one facing the challenge of adapting to survive, and the other overwhelmed by an unprecedented boom in sales. With different levels of tech familiarity, for some it is a matter of ensuring that their business thrives, while others will be glad if they can simply survive until after the storm passes.
Traditional market food sellers are vying for customers through WhatsApp sales channels and e-marketplaces like Tokopedia and Bukalapak, while their digital equivalent – startups and e-stores focused on selling similar goods – are overrun by them. Online shops such as Wahyoo, HappyFresh and Sayurbox are doing so well during the health crisis that they're finding it a challenge to keep up with orders.
Sayurbox had to close down temporarily for eight days early this month to "complete all incoming orders" and “Let (their) employees take a moment of rest, especially the on-the-ground team who have been dealing with orders these past few weeks,” an official statement reads. According to the company's Head of Communications, Oshin Hernis, the amount of transactions has multiplied by five times its usual level.
"Now that more people are embracing social distancing to help prevent the spread of Covid-19, we have seen an increased demand for our services,” she tells CompassList, adding that the sudden growth has been a crash course in expansion and post-quarantine sustainability. Hernis says that Sayurbox now focuses on “(making) sure our service is excellent and that our customers have a magical experience with us now and in the future.”
Wahyoo's founder and CEO Peter Shearer shares with CompassList that, between February and March, his e-commerce, which sells staple food supplies to businesses such as restaurants and stores selling basic goods, has grown 80% by number of users. The total as of early April has reached 13,000.
Shearer says that the best sellers has been basic groceries purchases such as rice, sugar, eggs and cooking oil.
He says that the increase in sales has encouraged his existing business partners while enticing new ones. “Those numbers of monthly growth have made our business partners eager for more advertorial push,” he says, adding that he has been approached by more parties interested in various forms of partnership.
Farmers, small suppliers benefit, too
David Lim, HappyFresh's Vice President of Marketing, says that the company has seen a “spike” in both traffic as well as volume orders, not only in Indonesia but also in Malaysia and Thailand, the other countries to which they market. He says that they are currently at 100m downloads of the HappyFresh app, and that many of their increased sales are of dry goods and dairy as well as fresh produce.
“We also registered an increase in purchases of products linked to personal hygiene and home-care,” he adds.
In response to the growth in business, these companies have taken steps to employ more workers to move their orders along more efficiently.
“(We) continue to increase the employment of personal shoppers and riders to provide more delivery slots to families and households across all three countries,” Lim informs CompassList. HappyFresh has a current total of 70 employees, serving 300 supermarket stores and 100 specialty stores in those countries.
Like Sayurbox and Wahyoo, Lim says that HappyFresh has also all ramped up their communication to keep customers and partners on the loop.
“(The marketing) division has taken on a communication role during this period where constant updates on the situation are provide through our social media channels as well as newsletters to our existing customers.”
We have been able to help even more farmers sell to customers that they could not reach previously
These e-commerce successes have also trickled down to some of the online shops' partners.
According to Hernis, Sayurbox has increased the number of their suppliers from a former level of between five and 10 farmers to 20 currently.
“So we have been able to help even more farmers in selling to customers that they could not reach previously,” Hernis says.
Even smaller e-shops are benefitting. Irvan, a bank manager in Jakarta, works from home with his wife and mother in-law to run an online vegetable shop inside the e-commerce website Tokopedia. He says that his customer orders have spiked from their average 10+ orders per-day to hundreds. With a daily current gross sale of around IDR 20m this past two months, Irvan – who asks that his last name not be used so as to not upset his employers – has benefited from the more flexible work routine. He says that the burst of sales has been overwhelming, but having to go to the office only intermittently has meant that he is able to drive straight to farms not only in Jakarta but in other cities such as Bandung.
For the past month, his shop has been the biggest vegetable seller in Tokopedia, according to the website's ranking. Irvan isn't complaining.
“We've had to re-arrange our storage/ office space in Jakarta, just because it's overloaded with (the ordered vegetables). It's been crazy but, to be honest, also a welcome surprise,” he says.
Hopes of sustainability
While traditional and modern market vendors are mostly buying time with technology and waiting for things to get back to normal, the existing online stores are naturally hoping for the surge in sales to continue post-quarantine.
In general, they see it as important to have things already in motion to sustain their momentum. Some are pushing hard on social media content to keep engagement with new customers alive. Some have more detailed plans.
We are aware of the shift in behavior for grocery purchases during this period – from offline to online
HappyFresh's Lim says that they have initiated a “recovery plan”.
“We are aware of the shift in behavior when it comes to grocery purchases during this period – from offline to online – and how this could be a 'trial' period for our new customers,” he says, adding that they have started “aggressive improvements” in their customer experience, from the onboarding process, the in-app experience, and the order-fulfillment journey.
Sayurbox's Oshin Hernis says that they expect to retain the new customers post-quarantine as the startup has always been focused on controlling customer acquisition cost and growth through targeted marketing campaigns and word of mouth.
“We have historically had a very high rate of repeated orders once customers discover our value proposition,” she explains, “The [current] boost in our popularity has dramatically lowered our CACs while increasing our scale enabling us to offer even better prices, assortments and delivery flexibilities to our customers.”
For now, there has yet to be a consensus among the shoppers.
“I've shopped for basic food online, as well as some of my friends, and we are certainly not going to make it a habit. The picks are bad and they are often expensive,” says Arlena Petrana, a homemaker from Banten, a province right outside Jakarta. Like a few other people we spoke to who are trying online basic food orders for the first time, Petrana says that the fulfilment of shopping physically is also lost.
Ertina Indrajaya from Bandung, West Java, says that she and most of the people she knows personally, will return to buying from traditional and modern markets. She currently orders basic food necessities from her usual market vendor who sells his goods in her neighborhood WhatsApp group.
Sociologist and author Solita Sarwono concurs that tradition and price will be the key challenges for online stores hoping to sustain their momentum. “Besides, you cannot see, let alone taste the product before you buy it”, she says, pointing to the basic human experience of physical action and interaction that going to the market possesses.
Conversely Renata Halim, a graphic designer from Jakarta, says “If you find the right (online) vendor, it's cheaper and obviously less hassle than going to the supermarket. I won't start buying clothes online but some groceries, maybe.”
According to Siwage Dharma Negara, a research fellow at Singapore's Institute for Southeast Asian Studies (ISEAS- Yusof Ishak Institute) whose research has focused on industry and trade in Southeast Asia, while the pandemic will trigger behavioral changes in people's habits, they will still be “relatively small," though even this estimation depends on factors including the length of the crisis, the e-commerce's strategy, and government policies.
He tells CompassList: “At the moment, we notice that e-commerce seems to be the big winner during the pandemic. But I think after the crisis ends, most people will go back to their routine, for example, going back to traditional markets or supermarkets.” Like Sarwono, he believes that this “is driven by the nature of human behavior, which prefers closer social interaction. I think this social behavior takes time to change.”
The hope for online shops selling basic food is that the quarantine will adjust customers' behavior to encourage them to prefer the practicality of online shopping to its more traditional equivalent.
“We strongly believe that everyone should spend their limited time with families or doing things they enjoy more efficiently, with or without the global pandemic,” Lim says.
Tradition moves online
In Indonesia, where the majority of citizens still rely on routine purchases of fresh material and basic goods from traditional and modern* markets, the Covid-19 quarantine has resulted in a complete upending of that habitual tradition. While there has not been any official survey of the sales dip in these market sales nationally, many reports are showing them as suffering significantly, including in major cities such as Bandung, in West Java, and others like Semarang, where a decrease of 30–50% in customer visits is reported.
According to the government's Statistics Indonesia in 2019, there are 4,182 traditional and 1,839 modern markets in the country, each containing high-tens to hundreds of vendors. Depending on each province's policies, some have been officially closed during the quarantine, some open only for a limited number of hours, and some are still fully open.
“It's been really empty for about two weeks,” says Hasan Budiman, owner of a raw meat stall at a modern market located in Tangerang, a city very close to the capital, Jakarta. Budiman tells CompassList that the early stages of the quarantine was “scary” for him and his fellow vendors.
“We didn't know what was going to happen, and everybody was complaining and stressed. We wanted to protest and be angry, but we didn't really know who to,” he says before correcting himself, “We still don't know what will happen, but a lot of us got together and figured out a way to still make money.”
That “way” is a group of vendors putting together a list of their usual items as something of a menu/order form, and sending it regularly to a WhatsApp group they created. That group is made up of their regular customers and key community people such as neighborhood heads who would then forward those forms on to friends who also live around the area, as well as to neighborhood group chats. Interested customers would then make their order direct to the vendors' WhatsApp numbers while motorcycle-taxi services such as Gojek would most often be used to deliver.
But it was more than WhatsApp groups which kept Budiman and his group – as well as other groups in different markets – afloat in these past few weeks.
“I've started selling my stock through online stores,” says Ratih Akbar, a basic goods seller who mostly focuses on selling eggs in her stall located at a modern market in West Jakarta. She tells CompassList that she saw a drop of about 20–40% during the early days of the pandemic, but has bounced back since she started selling through the Shopee e-commerce marketplace. For many vendors who are accustomed to traditional ways of selling goods, this migration onto a digital platform is a big deal.
Budiman and a few of his fellow vendors have done the same, setting up e-shops on e-commerce websites such as Tokopedia, Bukalapak, Shopee and others. Budiman says that the embrace of the use of e-money in modern markets in recent years has helped himself and other vendors – a good number of whom are older – in getting used to the idea of utilizing more tech in their business.
“I never thought of selling meat on Tokopedia before this. I thought it was for selling electronic items or clothing and those types of things,” 57-year-old Budiman says, adding that his son was the one to set up the online store and now helps forward each order to his father. Through a combination of the online store and mobile sales, he says that he is selling about 50% of what he usually does.
Though not all have found success or even a steady return to sales, this digital migration process has helped maintain their relationship with regular suppliers, including farmers and fishermen – a key part of their business.
The quarantine itself has posed many challenges for vendors in ensuring quality supplies, as that process must now be done remotely. Ultimately, they can only trust that suppliers will not send them bad goods, explains Ratih, who adds that “the customers are safe though, because I weed out eggs that have gone bad.”
Both Budiman and Ratih plan on keeping their online store open when the pandemic passes.
"Of course it will stay open," says Ratih, who likens it to having a new stall that happens to cost nothing to rent.
*While modern markets are more-curated price and location wise than “traditional” ones, the two are essentially the same – a collection of small-run and modest stalls relying on customers who come in routinely to purchases fresh goods at a price significantly cheaper than in supermarkets. Both are also an amalgamation of wet and dry markets, where vegetables, eggs, and meat share space next to noodle kiosks and shops selling cheap pajamas and bootleg toys.