Warung Pintar Turns 5: A Breakthrough Worth Celebrating

November 18, 2022

Warungs are synonymous with Indonesia’s topography, lifestyle and business landscape. Today, there are more than 64 million warungs, which employ over 97% of the labour force of the country. Most Indonesians get all of their daily items at warungs. It is a typical sight in Indonesian neighbourhoods with warungs now accounting for over 3,57 million units. Every year, the general trade accounts for 65 percent of FMCG sales.

Despite the booming business landscape thriving with warungs or MSMEs at the core, the ecosystem is still plagued with its own set of challenges. The archipelago is diverse and highly fragmented, and thus a lot of small business owners are struggling to survive and scale in a digital-first world. 

This is where startups like Warung Pintar are transforming the warung ecosystem by helping digitise the country’s vendors. Jakarta-based Warung Pintar identifies that it is essential for all parties to take part in multi-sectoral collaboration to improve the Indonesian ecology. After all, multiple reports and studies have found that collaboration will be key in the post-pandemic future across all industries globally. Launched in 2017, the company provides services to more than 500,000 warungs with 110,000 active transacting users and 1,000 wholesalers.

We take a deep dive into the challenges faced by warungs in Indonesia, and how local players and key stakeholders can help address those gaps for a better, more resilient future.

Waring Pintar: Identifying the gaps and making a real impact

Despite the huge potential that MSMEs hold, they still have limited access to opportunities and Warung Pintar identifies low levels of education, low income, lack of entrepreneurship, poor health status, limited access to technology, low credit utilisation, and limited ability to adopt innovation as some of the main reasons behind it.

Furthermore, growth and efficiency are constrained by the general trade channels' extreme fragmentation and asymmetries. Up to five layers of intermediaries between brands and customers can be found in the FMCG supply chain in general trade retail, accounting for 20–25% of value, an internal study by the startup suggests. To address this, all the players within the General Trade ecosystem need digitalisation.

Key Players in the Warung Ecosystem

Challenges Faced

It is clear that for the entire warung ecosystem to thrive and contribute towards national economic growth, all the players within the General Trade ecosystem need digitalisation. This is where Warung Pintar can help by making digital transformation accessible for all, from warung owners to brands/manufacturers. As the brand completes five years in the industry, today, they are serving more than 500K warung networks across 200 cities in Indonesia with 15 distribution centres creating a real impact.

Waring Pintar's Impacts

From inventory management to delivery and logistics, local MSMEs face various challenges in Indonesia's fragmented market. Warung Pintar addresses these pain points with the Grosir Pintar mobile app created for wholesalers to list and sell their goods to the Warung Pintar ecosystem. This enables access for wholesalers to hundreds of warung owners between 5-10km. Another solution, Warung Pintar Middleware enables Supply Partners/Distributors to tap and manage demand from Warung Pintar App and other marketplaces. Whereas, the Warung Pintar distribution service helps set you up a massive upgrade in distribution chain transparencies and automation in areas across indonesia.

The platform also eliminates the  multiple layers of intermediaries between brands and their customers that normally capture 20-25% of value. Warung Pintar’s integrated platform allows brands to reach and engage with warung owners within their ecosystem. With the Warung Pintar App, sellers are able to list products and get access to 500,000 warungs and directly engage retailers with programs. The Sales Pintar program enables MSEMe to run offline engagement programs and seamlessly manage salesman daily tasks. Sales Pintar helps build deeper relationships with transparent and efficient offline engagement programs.

Furthermore, Warung Pintar can help boost brand exposure through their integrated platform which connects directly to millions of end consumers. One such brand leveraging Warung Pintar’s integrated digital solutions is Coca-Cola Europacific Partners Indonesia or CCEP; the brand uses Warung Pintar’s solutions to digitise the distribution system of traditional warungs without interfering with authorised distributors that have worked with CCEP Indonesia with the goal to collect more transparent information on the distribution of products, which will then serve as the foundation for the development of effective distribution and marketing plans.

Another great example of a brand leveraging Warung Pintar’s holistic digital solutions is Sasa Inti. The pioneer of Indonesia's seasoning, Sasa Inti collaborates with Warung Pintar in order to digitise the distribution system of traditional warungs aiming for higher sales on key products. 

Data from 2022 shows that Sasa Inti's revenues climbed over 10% from 2021 to 2022. When compared to 2021, sales of Sasa Inti flour products climbed dramatically in 2022, reaching up to 544%. Between January and March 2022, Sasa Inti saw a 23% increase in the number of retailers.

Integrated digital solutions that empower the General Trade ecosystem is what Warung Pintar aspires to be. The company is dedicated to developing a reliable ecosystem via innovation and collaboration with the aim of bringing about genuine change, and at SIRCLO we believe in enabling and empowering such transformative agents. That’s why we couldn’t be prouder of this M&A. Together with SIRCLO’s resources, expertise and experience plus Warung Pintar’s on-ground know-how, we will take Indonesia’s warung ecosystem to another level.