Logistics Startup Estimated to Grow Up to 30% due to PPKM

Startup companies in the logistics sector are estimated to grow positively during the Community Activity Restriction or Emergency PPKM.

Chairman of the Indonesian Logistics and Forwader Association (ALFI) Yukki Nugrahawan Hanafi said that logistics players who play in delivery services can grow by 25-30 percent.

“This is because there are lots of food orders and purchases of daily necessities,” he said, Wednesday (7/7/2021). Furthermore, he explained that mall closures and increasingly tight restrictions on movement forced people to use logistics services.

Yukki said that every player is now better prepared to adapt during Emergency PPKM, by observing health protocols and encouraging vaccinations to courier partners and other supporting instruments.

Head of the Center of Innovation and Digital Economy Institute for Development of economics and Finance (Indef) Nailul Huda said the policy of limiting economic activities brought positive winds for online activities.

According to him, the increasing number of e-commerce transactions has brought fresh air to all related industries, including the logistics business. So the logistics business will be hoisted when in a period of restrictions.

“Logistics business growth can increase 1.5-2 times. Moreover, for digital logistics startup companies that collaborate with more e-commerce platforms and enter the social commerce sector,” he said.

Digital Transactions Increase since 2020

For information, Bank Indonesia noted that the total electronic money transactions had reached Rp201 trillion at the end of 2020, growing by around 38.42 percent in one year. Meanwhile, electronic money transactions in 2021 are predicted to reach IDR 266 trillion.

Meanwhile, e-commerce transactions in 2020 reached IDR 253 trillion. This figure increased by 23.11 percent from the position at the end of 2019 which reached Rp. 205.5 trillion.

According to Bank Indonesia’s projections, the trend of spending in e-commerce will be even higher in 2021 and its value is estimated to reach IDR 337 trillion or an increase of 33.2 percent on an annual basis (year on year / yoy).

Treasurer of the Indonesian Venture Capital and Startup Association (Amvesindo) Edward Ismawan Chamdani said that the more appropriate step for logistics startups is to discuss and approach central and local government programs to participate in recovery and assistance plans.

The reason is that, depending on how long the Emergency PPKM is carried out, it also provides the possibility of a decline in demand for the sector so that every player must anticipate from previous experiences.

“The space for all sectors, including logistics, will be limited by the Emergency PPKM. In general, the logistics sector, as well as B2B during the last PSBB period, were affected by a fairly large decline of around 20-30 percent,” said Edward.

Paxel, J&T, and Ninja Experience Increased Delivery

Logistics delivery service companies Paxel, J&T, to Ninja Xpress recorded an increase in goods delivery during the pandemic and the implementation of micro-emergency Community Activity Restrictions (PPKM).

Where the e-commerce sector is the driver of the increase in shipments. Paxel’s co-founder Zaldy Ilham Masita said the same-day delivery service at Paxel has increased since the implementation of the emergency PPKM.

“It continues to increase by more than 30% compared to before PPKM,” he said, Friday (9/7). Likewise with J&T.

J&T Express CEO Robin Lo said that the company recorded an increase in deliveries during the emergency PPKM period. The increase occurred due to restrictions on mobility, especially in big cities.

In addition, emergency PPKM makes e-commerce transactions increase. As a result, it affects the delivery of goods using logistics delivery services such as J&T. Where, about 70% of shipments at J&T come from e-commerce.

Ninja Xpress CMO Andi Djoewarsa also stated the same thing. During the pandemic, delivery of goods on Ninja Xpress was dominated by small-sized packages such as cosmetics, fashion accessories, clothes, watches, glasses and others.

“We also adjust the current e-commerce market trend, because it is one of the factors driving logistics growth,” said Andi.