We recap the journey of Super, Indonesia’s leading social commerce company, the first to be ISO 9001:2015 certified, addressing the economic inequality in private consumption for 240M+ people across rural Indonesia (tier-two to tier-four cities with GDP per capita less than US$5000) through their agent-led, group buying retail approach.

Since the start of the podcast in 2020 we have covered their journey, and six years into their journey, we highlight sharings from Super’s leaders over the past four years. These sharings tackle different aspects of Super’s business and organization, and serve as an introduction to first-time readers on both the company and the Indonesian social commerce opportunity.

1. On Market Opportunity, Go-To-Market, and Competition from our 2020 conversation with CEO and co-founder Steven Wongsoredjo
2. On Organizational Development from our 2022 conversation with VP of Talent Nabil Abdullah Ishak
3. On Market Expansion, Revenue Generation, and Competitive Moat from our 2022 conversation with CEO and co-founder Steven Wongsoredjo
4. On Private Label Products and Profitability in Rural Indonesia from our 2023 conversation with VP of Innovation Nadira Zahiruddin and VP of Business Development & Strategy Gisella Tjoanda
5. On Building the Groundwork for Future AI-Driven Retail in Indonesia from our 2023 conversation with CEO and co-founder Steven Wongsoredjo
6. On Super’s Impact on Incomes, Business, and Talent in Indonesia from our 2022 conversation with CEO and co-founder Steven Wongsoredjo

Market Opportunity: Ecommerce in Indonesia was only 4% of total Indonesian retail. How is the rest of private consumption being tackled?

Steven: I’ll try to slice my answer into two parts. The first part is actually the market opportunity for social commerce itself. So if you see the economic instrument of Indonesia that 60% of our GDP is driven by private consumption. And if you look deeper into Indonesia’s demographic that 30 million people live in Jakarta, so most people live outside of Jakarta.

And if you see today that the propensity of the middle class is immense, and they account for the majority of the total population of Indonesia, which gives us a total addressable market of 200 billion-plus. So this is basically how we see the market opportunity, the things that we tap for Super.

Before we started we also tried to identify how the business model will look like. Of course, there is the first generation of commerce in business models like Taobao that has been happening in China and India. Social commerce is also thriving in those countries, mainly in the tier-two cities going to rural, in other models, more like O2O.

But we think that Super never copy-and-pastes the business model that I see from India and China because we think that we need to have our own model. So we’re kind of the hybrid of what’s happening in India and China.

Second, why is the opportunity still massive and still untappable for those people? Because look at it this way. If you see the data for the past ten years, a billion dollars has been pouring for the first generation of commerce, for ecommerce juggernauts in Indonesia. And you see that they can only capture 4% of the total Indonesian retail market.

It tells you something that the Indonesian’s offline market is going to be subtle for a while, in this way, we see that the offline market is a very massive market that we need to tap with technology in a more unique way that’s why we think social commerce has a big potential to crack ecommerce tier-two cities, tier-three cities, and rural Indonesia.

Go-To-Market: Social commerce (community-based group buying) is the key to unlocking the 200B private consumption market in Indonesia.

Steven: This is the thing that makes the distinction right. Instead of buying one by one, we do group buying. We have minimum group buying of 200 bucks and 50 bucks, and the way this agent purchases can be different from one to another. For 200 bucks we deliver the goods to their place if it’s below 200 bucks and it has to be at least 50 bucks they have to pick it up from the SuperCenter.

Basically, SuperCenter is a place or a property that we partner with. It can be mom-and-pop’s, it can become someone who owns a house, where we store the goods over there. So imagine it’s like an Amazon Hub Plus. Why do they have to pick up the goods from there? Because it makes sense economically compared to us delivering the goods below or equal to 50 bucks up to 200 bucks.

What we do as an agent or as a villager, if you are a community leader and you are joining us, you don’t need an upfront fee, you just have to install our app, and you can aggregate all of the demand, you order all the goods based on the demand. And there is no maintaining the franchise store fee. Therefore it will be more friendly for you to operate this.

Competition: Social commerce is ripe for multiple market leaders with the diversity of Indonesian consumption.

Steven: The social commerce market in Indonesia is quite massive compared to any third-world country. What I believe in the next three to four year or five years there’s going to be four to five kingdoms of social commerce, and we’re going to be one of them.

The same thing like the first generation of ecommerce that’s been happening in the first-tier city, there are four kingdoms of the first generation of ecommerce, and we think this is what is going to happen to social commerce. Why?

Because the Indonesian market is niche. The discrepancies in social economics affect certain people to behave in certain ways and they have different kinds of demand and this archipelago with the island that varies in kilometres apart also contributes to that thing.

So to give a very fun fact, so for the area that we cover, let’s say we go to the east, people will like more spicy food, and you go down to the […], which is not so far away, they usually like sweeter food, and you have to provide them with several different types of SKUs or goods. So this is what I think is going to happen to Indonesia.

Paving the ecommerce road for Indonesia’s rural economy with Super CEO and co-founder Steven Wongsoredjo

Organizational Development and Leadership: An organization nurturing local talents is necessary to scale a social commerce business tailored to hyperlocal needs.

Nabil: In a sense, I do believe HR is not the icing on the cake, but it’s very much the baking powder I would say. HR can make a huge difference for a company to either scale up or bust. So HR is an entity that defines your business right from the very beginning, your culture, your competitive advantage through people, your growth, as well as your exit strategy.

As a local startup, we fully embrace our culture of inclusion. In Indonesia, we believe diversity is required to be a forward-thinking company. However, we also believe in nurturing our local talents and growing their confidence, and their professional network, and equipping them with tools to truly succeed in a global workplace. So, I always say to my team that being in Jakarta or having international experience is not necessarily a prerequisite of success. What’s more important is having an open mind and willingness to succeed.

What we aim for is sustainable and profitable growth. We are going for the long haul. We run like we’re sprinting but we pace ourselves for a marathon. What we aim for is the growth that naturally comes with bringing in more and more people to [build up] our organization bench strength. As a Head of HR, I want Super to attract the best local talents and build a winning team that will take us to the new heights and establish us as an employer of choice.

A Leader A Minute Episode 5: “HR is not the icing on the cake, but the baking powder. It can spell the difference between scaling or not.” – Nabil Ishak, Aplikasi Super Head of HR

Market Expansion: East Java and South Sulawesi are already substantial markets, but these are just the beginning.

Steven: Probably the big thing that we would like to do in the next few years first is geographical expansion, and second is three points on the business strategy that we would like to do.

If you’ve seen the data, the propensity of Indonesia’s middle-class income based on the World Bank data is immense. And if you look deeper into our GDP, 60% of Indonesia’s GDP is driven by practical consumption, [and] one-third of it actually comes from rural areas. So actually Super has a huge total addressable market that is US$200 billion. So there is no way for us to go to the capital city. We’re just going to go on to the rural areas to go deeper especially East Indonesia. So from the business perspective, we’re gonna do three things.

First is we’re going to expand to more new cities and add more agents. Right now we do have [around] 30 thousand and of course we would like to triple that and quadruple that in the next few years ahead. And the way we’ve seen the opportunity is so humongous right now we are in East Java. So we do have a different approach when we are expanding. We are not going after the whole Indonesia, we’re going it step by step because for us locals who really understand what’s going on on the ground, supply chain is a very complex business and it’s going to take a while for us to reach economic efficiencies, network effects, and so on.

In fact, Super is only in its first three years as a company and is only in East Java. And right now we are expanding to only one new province, which is in South Sulawesi. But look at it this way — most of these first generations of e-commerce got to unicorn status by having 70% of their transactions from Jakarta only.

And Jakarta has US$200 billion GDP. And then right now in East Java, it’s US$160 billion-plus US$40 billion in South Sulawesi. And then if we could take 5% of it, we would become a very meaningful business. And what we’re trying to do — we’re now in 35 cities, and there are still like 480 cities left that have GDP per capita lower than US$5000. We’re gonna go there. And typically per city density, we could get around 2000 [agents] and each of these agents would make around US$1-2 thousand GMV for Super per month. So we’re going to generate an amazing cash flow in the next few years ahead.

Revenue Growth: Private label and exclusivity deals as key to unlocking greater revenues.

Steven: Second of all, we’re not just building market share and volume, but at Super here we’re also thinking about revenue because the more funding you raise, the more you’re going to get closer to IPO. And of course, you need to build these fundamentals as part of your backbone. So the next plan is — you’ve known about it — we’ve been successfully purchasing and acquiring [products] through private labels. We are going to acquire more down the line, but it’s different. The difference with these private label products is that most of the competitors are distributing first-tier cities’ brands. We’re actually partnering with local underdog players on the ground and acquiring them and amplifying their growth with us. So that’s the thing that we would like to do on the ground.

And the third is that we are exploring and expanding more vendors’ exclusivity on the ground because at Super here, we do sell some like P&G, Unilever, and some of the top brands, but most of the SKUs that we’ve sold are from local brands. So people that have never heard or never seen these products in the capital city, and we are partnering with them. We kick in the exclusivity on the ground to increase the gross margin and revenue over time.

Competitive Moat: Super as a technology retail business rather than just ecommerce, just FMCG or just a supply chain company.

Steven: In the end, it’s like an art of jiu-jitsu that we’re playing here, so people think when they are fighting Super, they’re fighting with this e-commerce general player. But hey, wait, actually, this guy is actually also a private labeled brand that actually has an FMCG kind of like angle that have very strong revenue.

Then people think that they would like to file us in the FMCG category, but hey, actually this guy has network effects on the ground and is utilizing these local vendors in distributing the product. We’re not using this like the local supply chain that we actually find in the capital city. And some of those folks are freelancers, truck drivers, and so on. So we’re gonna be like a deadly animal to deal with.

And in the end, the big vision of the company is we would like to become the Walmart of Indonesia, without having the presence of retail stores and having a very efficient [supply chain] on the ground. So that’s the big plan for the company for the next few years ahead.

S04 Call #37: Unlocking Economic Impact through Commerce Innovation with Super’s Steven Wongsoredjo, Janio’s Junkai Ng, and Konvy’s QingGui Huang

Private Label: Taking a multi-pronged, multi-SKU approach to private label to find the best pathway to profitability.

Nadira: At the moment, we’re focusing on three categories for private label. So one is we are focusing on sembako products.

So far we’ve already launched our two rice brands. The main reason is that they are the number one GMV contributor to Super. It is a main necessity and we see constant demand consumption for these types of products as well.

But we also have F&B, so we launched our crispy macaroni snack in November. And this is also one of the top GMV contributors to Super. And we also see that the margins are pretty high and can go up to double digits, hence why we have actually balanced out sembako and F&B to boost both the GMV and the gross margin side.

So other than health and beauty, which is pretty much straightforward why we have gone into these areas — health and beauty are known to have high margins — we are also focusing on sembako and F&B. But in terms of my role, in the private label, since I have been exposed to the FMCG industry, I help to leverage existing connections and network for suppliers and vendors to negotiate the best margins when we can.

I also leverage the knowledge that I have on FMCG on choosing the right types of products and using best practices to build and grow a product for our private label. So meaning setting up OKRs and targets, the right north stars that we need to focus on for each quarter to really achieve our goals for private label and building the number one product in each category.

But so far, since I joined, private label has grown to contribute 2% to our monthly GMV. So after this it’s just growing our existing private label. And we also already have a few more private label brands that are in the pipeline, which are also in line with our goals for both profitability and revenue generation.

So we have two approaches to build Super’s private label brands. One is what we call organic, where we actually develop the products and brands from scratch. And then the other approach is called inorganic, where we actually acquire existing brands in the market that have already achieved PMF.

So far the three brands that I mentioned, the two rice brands, and also the macaroni snack are all organic. So far we have only been developing our brands organically. But we have recently started to look for existing brands in the market that are doing well. And if everything goes well, then we’ll be acquiring them for majority ownership essentially.

Profitability: Why Super is investing in agent productivity and existing infrastructure to build a more sustainable business. 

Gisella: So, actually when we started building Super, we actually thought of building it for the end consumers assuming that they will understand the benefit of e-commerce for the rural areas. But after learning from our research and also our experience, we actually had to change the way we build products and whom we build them for.

So instead, we are building our products for the community leaders instead of directly for the end consumers in the rural areas. And we empower these community leaders with technological tools, which enable them to learn how to sell FMCG products to their communities. It not only helps to improve the accessibility and the inequality of FMCG products, but it also allows them to support their family and put food on their table, especially for those in rural areas.

And when we build products for these agents, we also think about how we can maximize their output, which is their commissions, with limited constraints, which is their time. So in a sense, we need to prioritize the agent’s productivity as we build the product for them. And we hope that by providing these tools to our agents, we can help them improve their quality of life.

And also I mentioned before that the needs and the wants in the major cities and rural areas are very different. So we really need to be able to empathize with the users’ perspectives and tackle what they need and what they want instead of assuming everything is the same with major cities.

Nadira: So executing new strategies in rural areas is definitely very different. Maybe three things that I’d like to highlight.

The first one is, again, always look at the market that you are serving for each initiative and continuously experiment with the best strategy to roll out. So for us, we always do experiments on a smaller scale, as I’ve mentioned as well, to really see which ones have the great potential, and then we then roll out on a large scale for the ones that do work out right.

But another thing that I would like to say on this point is that in rural areas, we also cannot introduce too much tech upfront as well. I mean, it creates an intimidating environment for some of the people there. So with tech-related strategies, we always see how we can simplify the journey and also leverage social capital to build awareness with the consumers there.

So for example, if one of them sees their friends do it or their family members use it, then it’s something that they would kind of follow as well. But on the second point, I also want to highlight that you should be resourceful and leverage existing resources when you can.

New strategies in rural areas can be quite capital-intensive, especially if you are expanding to new areas. But think about leveraging existing infrastructure and internal data that you have for each market. So, like what Gisella mentioned, the white space analysis is something that we leverage a lot for any kind of new strategy. But other than that, leverage also team members or any other resources to kind of start off new initiatives. So that’s also to become way more efficient in rolling out a new strategy.

And the last one is of course, always think about the impact. I think for me, innovation is not just merely inventing something new or a great product, but it is creating something innovative that is impactful to society, especially serving millions in tier two and tier three cities. So how do we impact their lives before and post executing the new strategy, which is very much aligned with Super’s mission and values.

Call #112: Why Private Label in Rural Indonesia is a Whole New Ballgame to What It Means to Win It with Aplikasi Super Head of Business Development Gisella Tjoanda and Head of Innovation Strategy Nadira Zahiruddin

AI: How Super is laying the data groundwork for a future with AI-driven, personalized social commerce.

Steven: In the rural areas, the GDP per capita is lower than $5,000 USD. The more things you put in the app, the harder it is for you to get to product-market fit. So it’s very important to manage the balance between innovation and product-market fit.

If you’re being too innovative in the rural areas, then no one’s gonna use it. Your AI is just gonna become a trophy in the cabinet.

And for business decisions, it’s also the same thing as well. Based on my understanding, building an AI after rural areas is like building a skyscraper. You need a solid foundation before you get there.

The first stage is building a bank of data. The second is deep learning, where this deep learning will assess the data and interpret, extract, and give you some advice.

Super right now is building that bank of data and in the inception of deep learning. So we’re not yet fully implementing AI. Why is that? Same thing. People who are executing things in the rural areas are not as advanced as in the capital cities.

So even if you integrate AI throughout your system, it won’t work if they don’t even understand how to bank the data properly. So that’s the thing that we need to tackle before moving forward.

But then, if you’re asking me about the future, I think AI will help us in making business decisions. Let’s say, it’s summer, and in the eastern area, they like spicier food. AI would then help us find out what kind of spices that they would like to eat, and give us a much better predictable distribution towards the SKUs that we need to sell during those seasons, and so on.

But at this point, we’re still building towards it. I think we’re not there yet, but we’re at the foundations of it, and it has to be properly addressed before we fully implement AI so the team can execute well and use it properly to interpret, extract, and decide for making better business decisions.

And at the same time, we have to make sure the device is suitable, and has the capacity to load because the more you put AI-driven functionality in an app, it’s going to slow down the app loading. And if you’ve seen the data, users often drop after 10 seconds. And so once we put one AI, loading can take up 15 seconds or 20 seconds. That’s not the trade-off we’re trying to chase.

Call 146 | The Reality of Leveraging AI in Southeast Asia’s Leading Consumer Platforms 

Impact: How Super is increasing wages by more than 50% the minimum, empowering underdog, local brands, and hiring local talents to drive the tech ecosystem and economy of Eastern Indonesia.

Steven: First is definitely job creation. Typically at Super, [our agents] could make around 60 bucks per month, and the minimum wage in that area is around 140 bucks.

Therefore, imagine if you do have — well, I mean we’re talking about like second-tier cities and rural areas 140 bucks is kind of like a big deal. That’s the way that you have to see that. Let’s say you make US$10,000 per month, and suddenly your wife could make US$5000, that’s going to be very meaningful for your household, right? So that’s basically what we are trying to do and what we are trying to continue to do in the next few years ahead.

Second of all, by actually acquiring private label brands, it’s not only working one side for us. Basically the production is still being taken care of by the people who own the brand, but now we own the brand and amplify all of the growth. They’re gonna grow with us. So empowering more of these underdogs to basically fight with the first-tier city brands is [what] we’re trying to do over here.

Lastly, there has always been like aspirations of Indonesians who spent time back in the day growing up in rural areas. If you’ve seen all of those like decacorn and unicorns that are now born and raised in the city, probably those are like metropolitan kids. We would like to become the villagers kids building this app, built by those who were born and grew up in rural areas. And still [no other] company has done this properly to build this tech ecosystem [for] East Indonesia. And we hope we could become one of the voices of this East Indonesia economy.

I mean, five years ago I still remember, we started as underdogs. And I think one of the reasons why Yinglan picked us is because why are these guys trying to make their life harder by building the business in rural areas, you know? And then, I got passed by a lot of like investors back in the days because they were just saying, “Why don’t you just launch in Jakarta, right?”

And rural five years ago was just jargon. It was not like a big thing. But now we’ve seen that more and more people are going to build companies for rural areas. And I think we were one of the ones that started the tide and hopefully in the next few years ahead would love to see and inspire more people who come back to the country and not just build this tech ecosystem in the capital city, but also think about how to solve problems outside of the capital city.

S04 Call #37: Unlocking Economic Impact through Commerce Innovation with Super’s Steven Wongsoredjo, Janio’s Junkai Ng, and Konvy’s QingGui Huang