Warung Pintar: Developing Indonesia’s Most Popular Micro Businesses
By : Nathalie Depari
Every Indonesian knows the word “warung”. Warung is an Indonesian word for ‘small kiosk’. These kiosks are very popular: the warung is a favorite place for many Indonesians, where they can purchase food or small daily goods and chat with other patrons. Located widely across cities and towns, the easy availability of daily goods makes the warung essential for many Indonesians.
Although minimarkets and supermarkets are expanding in various parts of Indonesia, the warung remains a favorite place for many Indonesians just to sit around and chat. Warung Pintar (meaning smart warung) is a startup that sees the important role of these kiosks in Indonesian social life and strives to take them to the next level by digitizing one of the most traditional business models in Indonesia. Jumpstart had the opportunity to interview Dista Mirta, the brand manager of Warung Pintar, to learn more.
JS: When and how was Warung Pintar established?
DM: It was in November 2017. At that time, founder of Warung Pintar, Bezharie, was actually working for East Ventures. Bezharie was working on a co-working space project when he noticed that in front of the building which was being renovated, there was a warung. The warung was always crowded and was something of an eyesore–but instead of displacing it, as many others would have done, he realized he could offer to co-operate with the owner on tidying it up. It was then that he had the idea for Warung Pintar.
JS: What is Warung Pintar’s business model?
DM: There are roughly 3.1 million food stalls throughout Indonesia. Warung Pintar is transforming the warung business ready for the future economy by providing them with the same resources as other businesses, especially in terms of infrastructure and technology.
Warung Pintar works on a partnership system, meaning the warung owner is our partner. To become a partner, one only needs to have legal land ownership and register online. After that, we will issue a questionnaire and lend the owner a starter pack in the form of a cart, CCTV, charging system, TV, refrigerator, and so on.
Once the initial steps have been completed, the next requirement for partners is that they must order their sales inventory through Warung Pintar with an app called the “Juragan App”. Juragan is a term for our partners. They do not have to pay anything extra to us for the service, but using this app enables Warung Pintar and the warung partners to monitor business development more closely. By ordering goods directly from producers, the warung can retail to consumers at affordable prices. We have around 3000 partners now in Greater Jakarta and Banyuwangi.
JS: How has Warung Pintar impacted its target audience?
DM: 70 percent of Indonesia’s population falls into the grassroots category. While many people actively and positively participate in business, the problem is that their business growth is very small and does not growth from micro businesses even to small or medium enterprises. The main problem is that they don’t have the same access to resources, but this is changing. The impact of Warung Pintar’s method of collaboration, based on our social index report, is that the average kiosk owner’s monthly income has increased by 89.5% after joining us, and is 15% higher than the regional minimum wage.
JS: Have there been problems or obstacles in the partnerships?
DM: Some of our partners ended up closing down, but the main problem usually comes from the partner’s mentality–for example, when they have no real intention of running the business. Running a warung is just the same as running another business. It is not easy. People who underestimate the effort it takes end up closing their business.
The main problem is commitment. It is quite a challenge for us to prepare products that are suitable for them–such as the Juragan app–because the industry is also quite new.
JS: From your perspective, how developed is the tech startup ecosystem in Indonesia so far, especially in the field of supporting micro businesses?
DM: Actually, tech startups in Indonesia have entered their second wave after GO-JEK, Tokopedia, and Traveloka. These startups have targeted the lower middle class, educating the market about the benefits of technology. Warung Pintar is part of this shift: many people learn that technology makes their lives more advanced, easier, and more efficient. The challenge lies in how we provide products that are fit for this market. Micro business in Indonesia is very heterogeneous. It’s not only the warung model that needs help. Because of this, we must continue to use the opportunities that exist, and adapt.
JS: Does the Indonesian government support Warung Pintar and similar startups working with micro-businesses?
DM: Jakarta’s government is actively organizing meetups for the startup community so as to share information on how the government can help. The government is trying to improve infrastructure to facilitate the technology startup ecosystem. Several times, we have been invited to meet with the minister directly, through an open forum for discussion.
JS: In your opinion, what could be improved for the development of tech startups in Indonesia?
DM: Startups in Indonesia develop from the desire to solve problems–therefore, their development in Indonesia is sustainable. There are a lot of problems in Indonesia, so one improvement might be that startup growth should not be viewed only as a trend, but also as a part of this problem-solving process.