In this article, we look at Indonesian supply chains from a different angle: cross country expansion, and where the Smart Warehouses of Shipper comes into play.

Shipper Warehouse and FulFillment Services. Taken from Shipper's YouTube channel.

On Beauty, Sleep, and Baby Care Products: How Shipper Supports Retail Expansion Across Indonesia

In this article, we look at Indonesian supply chains from a different angle: cross country expansion, and where the Smart Warehouses of Shipper comes into play.

In our last article on Shipper Indonesia’s warehouse case studies, we covered how they supported the supply chain digital transformation of Kopi Kenangan, eFishery, and Bata, market makers and leaders in their respective industries.

In this article, we look at Indonesian supply chains from a different angle: cross country expansion. Indonesia’s economic growth in recent years goes well beyond Jakarta and the surrounding cities. In Eastern Indonesia for example, government initiatives to develop digital infrastructure, logistics connectivity, among other aspects of the region’s economy, have led to a 900% increase in online transactions from the region.

This may draw brands to the region, but it is not as simple as making products available for delivery to the region. There needs to be online-to-offline infrastructure in the back end supporting this expansion, to ensure SLAs are met, product quality is maintained, and storage across SKUs is optimized.

This leads us to exploring three stories, three brands, and three industries where Shipper’s Smart Warehouse System came into play, this time to not just digitally transform the brand’s supply chain, but help the brand unlock new growth in previously untapped regions in Indonesia (largely Eastern (centered around Surabaya) and Western Indonesia (centered around Java)). Insights are takeaways from Shipper’s case study library.

The first is Mimpi Sleep, an online retail company offering premium mattresses and pillows imported from Europe. Mimpi Sleep is most known for offering the first online mattress in Indonesia that can be packed in a box. See the full case study here.

The second is Raena, the largest beauty product reseller and dropship platform in Indonesia with 321,000 resellers collaborating with more than 250 beauty brands and more than 1000 original products ready to sell. See the full case study here.

The third are mom and baby brands in Indonesia. See how Shipper helps these brands here. For all three brand types, they share key supply chain and storage challenges as they expand across Indonesia:

(1) Concentration of warehouses in one area results in high costs of fulfillment and inefficient customer experiences in other areas.

But it’s not as simple as adding more warehouses, given the costs of infrastructure and management. Brands have to be strategic and leverage automation where they can to optimize warehouse expansion. It requires an analysis of factors including target market proximity, transportation infrastructure, and cost-effectiveness. 

For example, Raena’s warehouses were initially concentrated in Western Indonesia, especially Java, leading to high last mile or shipping costs to consumers. Expanding to Eastern Indonesia meant have to be strategic about where to open up in that part of the country.

After developing an expansion strategy on top of Shipper’s countrywide network of smart warehouses, Raena opened up 6 new warehouses, one of which is located in Surabaya, considered a gateway to the Eastern Indonesia market with its flexibility towards both land and sea delivery. This expansion led to a 70% reduction in the cost of shipping goods to Eastern Indonesia, and also enabled 30% more resellers to join their platform.

For Mimpi Sleep, the brand was looking to expand both in the East and the West. With Shipper, they targeted main hubs in the West (Legok, Tangerang) and East (Surabaya) to optimize last-mile delivery distance and times and reduce shipping costs.

(2) Location is one thing, but brands also have to keep up with SLA.

This can include a complex mix of special incentives and return policies, in the world of ecommerce, as they meet greater demand in more regions. 

WIth their expansion in both Western and Eastern Indonesia, Mimpi Sleep allowed Shipper’s Warehouse Management System (WMS) to optimize and automate their warehouse operations. This helped to better time deliveries and meet SLA standards pre-expansion.

Critically, for most brands, SLAs will include special return policies. Mimpi Sleep in particular has a 100-night free trial program / return policy. Shipper’s real-time fulfillment dashboard plugged into their warehouses enabled the brand to efficiently manage and track the progress of this trial program, which can easily spiral out of control without proper management.

(3) Having the right location is one thing, and maintaining SLA is another, but are the products still of quality when they reach the customer’s doorstep?

It is important to find the right warehouse and technology partner able to meet the complex requirements of products in cosmetics or mom and baby care.

For Raena for example, Shipper provided Cool Room Storage for products that cannot be exposed to high temperatures, like skincare and makeup. They also provided Dry Room Storage for products sensitive to moist temperatures, like makeup accessories.

Both storage types are plugged into Shipper’s real-time dashboard where Raena is able to track stock statuses as it relates to damaged or expired products. While all these are in the backend, the efforts put investing into such warehouse infrastructure manifests in the product quality, which has not only helped Raena expand its market but also reseller network across Indonesia.

This ability to store temperature and humidity-sensitive products as they cross long distances in a country like Indonesia (i.e., cold chain logistics) is not just important for beauty products, but more so for baby food, milk, and fresh baby care items.

The tropical climate in Indonesia is an additional factor to consider for brands, as this affects shelf life and product safety. More than having different types of storage facilities, Shipper’s warehouse network eliminates the need for expensive temperature-controlled vehicles while prolonging product shelf life.

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Paulo Joquiño is a writer and content producer for tech companies, and co-author of the book Navigating ASEANnovation. He is currently Editor of Insignia Business Review, the official publication of Insignia Ventures Partners, and senior content strategist for the venture capital firm, where he started right after graduation. As a university student, he took up multiple work opportunities in content and marketing for startups in Asia. These included interning as an associate at G3 Partners, a Seoul-based marketing agency for tech startups, running tech community engagements at coworking space and business community, ASPACE Philippines, and interning at workspace marketplace FlySpaces. He graduated with a BS Management Engineering at Ateneo de Manila University in 2019.