GoToko Utilizes the GoTo Ecosystem to Work on the Grocery Shop Business

GoToko, Gojek‘s joint business unit with Unilever Group, continues its expansion to Greater Jakarta after one year of official operation. By leveraging the power of each other’s networks, GoToko is confident that it can compete with other technology companies that are both eyeing the warung market.

GoToko was first launched in August 2020. Initially, the company expanded to thousands of stalls in Tangerang and South Tangerang to be digitized.

“The company and its shareholders decided to expand its operational reach based on the positive feedback and high interest received from users,” said GoToko CEO & President Director Gurnoor Dhillon in an official statement, yesterday (3/2).

The GoToko platform allows shop owners to access and order hundreds of everyday products from various categories of merchandise with real-time availability status and on-time delivery.

So far, grocery stores have faced various challenges, such as the difficulty of getting products at competitive prices, the limited number of products offered, and the lack of reliable and cost-effective delivery services.

GoToko wants to be present as a solution that connects well-known packaged goods manufacturers with grocery stall businesses to meet the supply needs of their goods by creating an increasingly efficient distribution process.

Currently, GoToko offers a wide range of product supply services, ranging from the categories of food, beverages, household needs, toiletries, beauty and health, and baby needs.

As a platform, GoToko also complements the reach of well-known packaged goods manufacturers by targeting grocery stalls that have so far been less affordable in sales distribution.

Well-known packaging goods manufacturers such as Unilever Indonesia, Danone, Coca Cola Europacific Partners Indonesia, Nestle, Mayora, Wings are a number of brand partners in GoToko.

The company wants to ensure that all GoToko services run well from upstream to downstream, so as to create a smooth and unimpeded supply chain, making it easier for grocery shop entrepreneurs to get price certainty, delivery certainty, and goods certainty.

“Because GoToko is built on a foundation of trust and reliability, we will ensure that it has the necessary infrastructure and can serve user needs,” said Gurnoor.

Deliberately Targeting the Grocery Store

When contacted separately, Gurnoor emphasized that the target of GoToko users is to target grocery stalls that have been underserved in terms of sales distribution, in the sense that they have not been visited by sales representatives from the brand principal.

“Reputed packaged goods manufacturers (brand principals) want to reach 2.5 million markets and GoToko will help them expand their reach within the underserved grocery market segment, by ensuring the existence of relevant brand principal products for warungs, thereby widening their coverage area.”

For these grocery stalls, he continued, it is not only easy to manage stock, but they can also increase the efficiency of the grocery shop business operational process because grocery shop owners can order stock of merchandise from home without having to leave the shop.

However, he did not elaborate further on how far the efficiency that can be obtained by the shop owner in certain benchmarks.

The Potential for Digitizing Stalls

The grocery shop is part of the MSME actors who are one of the drivers of the national economy. KemenkopUKM noted that currently there are around 3.6 million grocery stalls which contribute up to 80% of retail sales in Indonesia.

According to the records of the Coordinating Ministry for the Economy, MSMEs also contributed up to 61.07% or the equivalent of more than IDR 8,573 trillion to GDP.

Despite having a large contribution to the national economy, there are still around 2.5 million grocery stalls that are currently not well served (underserved retailers) due to the complexity of the distribution of goods in Indonesia, and difficult to reach well-known packaged goods manufacturers (brand principals).

Gojek’s competitor, Grab has already entered this sector after acquiring Kudo by pioneering GrabKios. Grab claims to have more than two million GrabKios partners and is available in 500 cities in Indonesia.

Meanwhile, Bukalapak makes Mitra Bukalapak its main business after listing its initial shares to the public in August last year.