So what are the principles that have led to the rapid growth of Tokopedia–and what’s coming next for this powerhouse of Southeast Asian E-commerce?
MARK FITENY: Hi. I'm Mark Fiteny, and I run our internet investment banking business globally for J.P. Morgan. And I also run our new economy business for Asia-Pacific. I'm very excited to have William Tanuwijaya joining us from Tokopedia for our conversation here.Tokopedia is the leading e-commerce business in Indonesia, and it has a mission to democratize commerce through technology. I'll give a couple of perspectives, but then we will dig into some Q&A with William.First of all, there's a real purpose, opening up economy through technology, and seeing commerce as a force for economic development. It's part of the mission and vision.And there's a real sense of purpose there. Two, there is a platform strategy to the technology business that's being built. A super ecosystem, which brings commerce, cloud, and payments and links together consumers, merchants, and developers – a real organizing principle that has lots of different venues and vectors for extensibility based on the technology business that's being built. And number three, William believes that a marketplace is a beautiful model, because it aligns the incentive of the marketplace provider with the success of those that it enables. And so there is a real thought towards, how do you actually drive the business itself? So William, we're very excited to have you here. We'd love to have you just start off with giving a little bit of background on the business that you founded and where you are today.
WILLIAM TANUWIJAYA: OK. Thank you, Mark. Thank you for having me. So great to be here.
MARK FITENY: You want to give a little bit of background on the business that you're building and where you are in your trajectory?
WILLIAM TANUWIJAYA: Yeah, so next month, Tokopedia will be 11 years. So we have been building this for the past one decade. And it has started with an aim to building democratic e-commerce through technology.I actually come from a very small city in Indonesia, and I grew up and I spent my childhood in Indonesia. So when I went to the university, I realized that this inequality of access and opportunity – because Indonesia is the largest archipelago country in the world – its 17,000 islands. So we believe that technology can change that. So yeah, that's the background behind Tokopedia. Now we have about 8.6 million people in Indonesia starting a business through our platform, having about 90 million monthly active users, reaching 97% districts in Indonesia. And 2 out of 3 product that you buy in Tokopedia today will be delivered in the next 24 hours. So yeah, we are very exciting for the outcome and happy to discuss about all of these session today.
MARK FITENY: Yeah, it's really impressive to see the scale that you've come over such a short period of time. If you were to just look at Indonesia as a market and maybe with the frame of reference of other large markets where, in China, you've got 35% e-commerce penetration. In the U.S., still only 15% penetration. Where do you see Indonesia along its trajectory? And what are some of the unique dynamics to serving the Indonesian market?
WILLIAM TANUWIJAYA: Yeah. So Jack Ma once said that in the United States e-commerce is the dessert but in China, it's the main course. I think it's become self-fulfilling prophecy today. Right? So in Indonesia, with 17,000 islands, e-commerce become necessity and important tools that open and equalize business opportunity as well as providing equal access and transparency pricing to goods and services across the archipelago. Amazon started in U.S. in 1994. So as you mentioned today, U.S. having about 13% of online retail penetration after 27 years. So almost three decades. Alibaba started in 1999. Today China, already having both – 35% of online retail penetration after only about two decades, 22 years. Tokopedia started in 2009. It's a transition-based e-commerce model, only being introduced in the last one decade in Indonesia. Indonesia is like one decade behind China and almost two decades behind the United States. Five years from now, I think we will catch up to the United States. And in 10 years from now, we might be able to surpass the United States in that field, driven by three things. Number one is the necessity that I mentioned. The second part is because of the leap frog of infrastructure platform. 4G, 5G used to be one decade ago. To be able to access internet, then you need to build this landline. But Indonesia is archipelago country. It's very difficult to get equal infrastructure across country. But reaching 4G and 5G, this has become a leapfrog. Everyone can access to affordable mobile phones and data plan. The third factor will be actually the recent COVID 19 pandemic. This is actually isolating digital adoption and transformation across the country.
MARK FITENY: Yeah. And we're obviously coming through a big dislocation in the world with the coronavirus. And what we've seen is that has changed consumer behavior. And it's been an on ramp for e-commerce for a lot of reasons. Are you seeing that in your market? And how are you seeing that in your business – whether that's offline to online transition or a different way of serving your merchants and your consumers?
WILLIAM TANUWIJAYA: It's like in the past 10 years, we built the company to prepare for being expanded. We've seen acceleration of digital adoption and transformation across the country in the past couple of months. Businesses small and big are suddenly transformed and adopted digital in times of pandemic to be able to continuously operate and reaching out the customers. We've been living our mission and our vision. One maybe majority things that we have never been anticipated that is the work from home for the whole organization. While we are a technology company, it's still a major shift on how we operate. It's been more than five months already. All of our team members, thousands of them working from their home. Necessity can be a very powerful tool and blessing in disguise. It's actually helped us to think on how our organization can grow faster by embracing technology more and remains productive in the supply and demand online in a time like this while keeping everyone healthy and safe. One thing that I also noticed that during this pandemic, often we share about this dilemma between which needs to come first pandemic or economy. A lot of countries have already discussed about this. But I think from our every experience and see across the group even with such supply and demand online, distinct product could have keep everyone healthy and safe. It's a proof, if we can embrace technology adoption more, on doing business, we can actually have proof.
MARK FITENY: Yeah. And that makes sense. I like – I like the term necessity as something that is a value proposition so critical that it's necessary. As you look at the pain points that consumers have as they're looking for goods and services, and merchants have as they're trying to reach those consumers, how do you think about your – the design of your marketplace in being able to provide value to both sides? And what do you do uniquely that helps to address those needs?
WILLIAM TANUWIJAYA: It’s ar…if we can transforming [INAUDIBLE: ]. At the first, it's actually been the Software Class, when we start the company. Because we cannot meet in person splitting with like so many different islands. And we need to build a platform where everybody can meet online and can trust this segment. So the way that we do it is to adopt the escrow model. So every potential customers, when they buy in Tokopedia, they will pay in Tokopedia. And we only pass the payment to the merchants when the customers are satisfied with the product that they receive. And all the time then we start onboarding logistic partners. We are now actually working with a lot of logistic partners, including on-demand delivery like Go-Jek or Grab. This is Uber of Indonesia. So we are actually the first in the world that are combining marketplace e-commerce company with a ride hailing mobility company who work hand-in-hand to deliver goods to the customers from our merchants. Over time, we become continuously evolved. We then start to work with the government to actually digitizing all of their public services. So now we can actually pay for the tax – pay for any electricity bills, for insurance. And then we continuously evolve. We see a lot of like company and Indonesians start to do their payment. But then we realized that, unlike China that have two decades we need to accelerate this. So we took approach that greater than we did by ourselves, we need to find a strategic partner and effort. Then we actually put our payment together with a draft and with people, which is offline in Indonesia, to bring the compete use case. Using one currency, you can pay offline, on the mobility services, on the food delivery. And of course, on a new commerce platform for Tokopedia in Asia. And then lastly, we also start to entrance offline work by actually enabling a small offline stores, grocery stores we have actually these stores on demand be able to sell any surfaces and digital goods to their customers offline. So yeah, over one day then Tokopedia really transform into more complete ecosystem. And the way that differences compared to the others – here’s in the market globally – is we become a pure platform that is actually connecting different demand and supply and a pure technology platform that, until today, we do not have any product that we sell by ourselves. And that – and that makes sense. And I'd like to learn a little bit more about the platform strategy, to be able to unite each of these different pieces of the ecosystem to serve needs like logistics or like payments – the things that fundamentally are important to a healthy and vibrant ecosystem. How do you think about designing that? How do you think about organizing that? How do you think about pulling together the disparate third parties in order to give a unified approach to the consumer that gives them a great experience?
WILLIAM TANUWIJAYA: Yeah, so by basically building a very clear business philosophy, we at Tokopedia believe that we can only be successful by helping others become successful. So when onboarding all of these partners, we never once eventually think on replacing them. For example, we start to create our services. But instead of like building all the warehouse and the logistic capability by ourselves, then we actually just focused on building the technology infrastructure to standardize all of our partners' operation capability, to figure out what is the pattern and where we can actually improve and could connecting the demands that we already have is…a ten millions of the customers that exist on our platform on the regular basis of how, actually, we bring our customers to become our partners – become our partners' customers. And by consistently doing that for a ten decade, then we become a new partners for everyone to grow and expand their business in Indonesia. And especially during this pandemic situation, we continuously see this adoption in many, many ways, both offline and online.
MARK FITENY: And as an entrepreneur who is blazing trails in terms of the market development and the development of your platform, where have you looked for inspiration and advice and counsel as you're thinking through strategy and you're learning the lessons of what's worked and what hasn't worked in the past, you're trying to apply those lessons to your own market?
WILLIAM TANUWIJAYA: I like to consider myself as an entrepreneur by necessity. So I actually learned of this by doing. For example, I didn't speak English until 2010. So most of my learning actually comes from failure. So for example, first building a technology company, I know that I need to open access and raise money from global investors who actually not only have a capital [INAUDIBLE: ] but also to have a transfer of knowledge and know how.But I come from a humble family. So I actually went ... during my university time my late father falling ill. So I actually doesn't go to the university but spend most of the time in internet cafe on the job business. I work from 9:00 PM to 9:00 AM. So for example, when I tried to raise money, I met with potential investors in 2010. In only five minutes, they just said to me that, William, we don't understand what you're trying to say. Because I speak really, really broken English at that time. Still today, but I think it's much better now. So yeah, I just realized I need to continuously learn by doing. So I'm also, I feel, extremely privileged. Over this journey, I met with so many of my idols that I had previously only a bit online. People like Masayoshi Son from Softbank, Shailendra Singh from Sequoia Capital. And to the extent of the network, Joe Tsai from Alibaba and so on. And eventually, all of this – the persons that I meet through the [INAUDIBLE: ] become our investors and become my personal mentors, become our board members. And of course, from them, then I learn about the business strategy about how technology transforms so fast, both in the west of the world and the east of the world. I personally grew up using a internet based on the U.S. product in Indonesia, by [INAUDIBLE: ] day to day as a U.S. product. But I learned a lot from the philosophy of building business from the east of the world, from the China internet. And combining both of these, it's like [INAUDIBLE: ]. In Indonesia, we only these past 10 years, 11 years, internet has started booming. We've got a fairly young population, and we really can benefit from this learning – from this time that's in effect.
MARK FITENY: And what a long way you've come in securing some of the most blue chip of investors. Knowing that you were taking on such a large market opportunity that requires capital to be successful, if you had the ability to go back, what lessons would you bring with you on having gone through the investor engagement and capital raising process?
WILLIAM TANUWIJAYA: I believe it's a risk under consistency. So failure is a given. If you're entrepreneurs, you will fail more than you have been successful. So we just need to consistent. And I'm very lucky to meet with all these investors that eventually believe in our vision and our mission. And our vision and missions never change. Mission is the democratize [INAUDIBLE: ] commerce and technology. Our vision is to build an ecosystem where anyone can start and discover everything. And it's also because of the necessity of the mission that really need a platform like this. And because of that necessity and that consistency, then over time, you really shows the traction – the platform really shows the traction. Whereas the impact really bring change to millions of people alive. And that impacts start to reflect as the business metrics, and like your monthly active users on the transaction volume, the contribution to the economy of the country. And last year, we actually contribute 1% of the GDP of the country. And Indonesia today is about a $1 trillion economy. And this will just eventually grow to become a $10 trillion economy. So imagine if like Tokopedia eventually can contribute to 5% of the country economy. If like contribute 1% of the country economy. And more on the offline and online and enabling our businesses to do more in more efficient and effective way. The business opportunity that comes together with an impact. And this is the story that our investors and our employees, our merchants, our partners think would all believe in them. And yeah, I think that it's been extremely powerful. And it's really a blessing in disguise this journey in the past one decade.
MARK FITENY: You get the compounding benefit of the economic development alongside your own growth, alongside the different ways in which you're able to serve the ecosystem. How do you keep your balance between focusing on the right things for the long term while needing to execute in the near term? I imagine it's a tough balancing act. How do you – how do you balance it out.
WILLIAM TANUWIJAYA: So I think, in the technology business – business model and technology will continuously evolve and change things. And we need to adapt with them. And yeah, I think that it's been extremely powerful. And it's really a blessing in disguise this journey in the past one decade. But the most important is actually that we invest on the people. So starting from a very small team to the Tokopedia have thousands of team members. And of course, these team members, you need to empower them with, what is the vision and the mission? And what is the [INAUDIBLE: ] and the – building a culture around that. So [INAUDIBLE] questions, it's very important. Because we see that a lot of technology companies grow very fast. But then they also become very fast – [INAUDIBLE: ]. So there is a balance between short term and the long term are utmost import, right? So the long term will be defined by the vision and the mission. But the short-term project, the technical product that you need to release this month, this quarter, [INAUDIBLE: ] allowance, shifting gears between a time to grow exponentially and a time to actually fixing and to make sure that the fundamentals are strong, it could always put at balance. So yeah, I think that, in the end, if you rely on people that all have the common goal that all speak the culture and the DNA of the company. In the technology company, not making decision is actually worse than making wrong decision. So the speed of making a decision is also important. By making wrong decision, it's a very bad [INAUDIBLE: ]. We see that some decision is actually doesn't bring them back to the platform, or doesn't bring effect that you have expected. You know that, after you try, and then you know that this is the wrong move, then you can actually learn from them. Right? So how do never on that speed of position who thousands of people, the answer will be on the counter. So yeah, I think by defining the right counter, building the right philosophy on the organization, then you remember the organization to fulfill both the long term strategy and the stock [INAUDIBLE: ]. Often, people operate in the technology industry will say that a technology company is like running a marathon with a very-- a lot of like small spins in that marathon runs.They are running marathon and spins at the same time.
MARK FITENY: Yeah. And having a mission and vision that people can galvanize to breeds a true north for culture. And understand on the decision making process. How has managing your culture evolved from your – a much smaller company to being the bigger company that you are today?
WILLIAM TANUWIJAYA: We are still very consistent about that. We have [INAUDIBLE: ] advisory and all of our team members' day to day behavior. The first one is our focus on the customer. So this is a culture of serving, culture of providing the best experience and the customer obsession. That's our philosophy, that we believe we can ultimately be successful by helping others to become successful. Number two is a growth mindset. This is the culture of continuously learning. We encourage everyone in the organization to have a [INAUDIBLE: ] and have a humility and curiosity to learn by a student. This is pretty much inspired by Alibaba's organization. You see how Jack Ma successful founders, entrepreneurs that can already pass the baton. This is actually the dream of like myself on how to build organization that outlasts the life of the founders – and this is the culture of continuously learning. And we believe because Jack Ma used to be a teacher, then the organization has been continuously learning organization. This is also the things that I want to implement in Tokopedia. The headline [INAUDIBLE: ] may have happened [INAUDIBLE: ]. This is a culture of continuous innovation. You often see that – like in Facebook, for example, it used to be they said, move fast and break things. And they eventually become a public company and then changed their philosophy to be, move fast, don't break things. Tokopedia we believe that we need to make it happen. But we also need to make it better. It’s a culture of continuous innovation. It's like you're done [INAUDIBLE:] things that will kill Tokopedia, someone else will. I think that was also inspired by a lot of like philosophy from the history we see on how Tencent for example. Pony Ma actually decide to build a whole team internally on how to create the product that killed QQ and that product eventually become a WeChat. So if like we don't build things that will kill us, someone else will. So that is the beauty of technology company. If you stop evolve, you'll die.
MARK FITENY: And how do you – how do you actually stimulate the brainstorming around what products are on the horizon that you need to invent? Because if you don't, somebody else will? When you're in your own organization and your team knows its reality, how do you disrupt yourself?
WILLIAM TANUWIJAYA: Yeah, so by drawing to the first [INAUDIBLE: ] focus on the past slide. So we need to capture the voice of the customers and give the customers not only the buyers but also the merchants, our logistic partners and all of the ecosystem involved. So we keep asking that questions. Are we still relevant? Are we really addressing the pain point of the customers? So for example, Then I also – It’s a Pandemic when we are pretty much in semi-lockdown situation in Indonesia. I work from home and stay at home. My family has actually tried to fulfill everything we are on need the past five months during this lock down. Who try to explains and our life daily needs be fulfilled by Tokopedia? And we keep notes We explain We still suffer from [INAUDIBLE: ] If when the past, we used offline to fulfill these needs. We just recently have a baby. He just celebrate one year anniversary – one year birthday last month. And we also like having small party within the small family. And we tried to fulfill all of that priority needs. You've seen Tokopedia attacking. If the logistics experience is improving, it’s merchant's selection. And all of that become a feedback loop. So this is this kind of DNA that we are trying to build within our ecosystem. Yet the competition is not against either peers. The competition is like through ourselves. It's our product, our ecosystem continuously improve over months, over quarter, over years. And if it's not, where is the gap? And how we can actually fixing that gap? Besides these are customer voices. Then we also need to be able to capture that clients very quickly. We also benefit from this combination of sales orders that some have a very strong footprint in the U.S. market. Some very strong have footprints in emerging markets by – even with Africa region and so on, some having very strong in China for example. And [INAUDIBLE: ] what is the plans of the internet company, there's [INAUDIBLE: ] very fast. There's a [INAUDIBLE: ] in China. There's so many things that we capture, right? There's real trends of advertising start to picking – e-commerce start to picking advertising pie. We see that fulfilled by Amazon, for example, in U.S., we see China network in China. And combining all of that know-how is like learning from over decades of experience and then transforming it to uniquely Indonesia demography. 17,000 island, how we should actually not copy paste it, but take that inspiration and actually fixing the customer's pain point? And then, after that really become the custom, our family become the customers. Our family gives us the feedback. We factor that feedback loop. We talk with the government and so on. So that will – that here again we will focus on the customers, make it happen, make better, and just continuously learning. You combine it together. That is our [INAUDIBLE: ] to continuously survive in this highly competitive market [INAUDIBLE: ].
MARK FITENY: Yeah. And so that's a great philosophy on being inwardly focused in order to make sure that you're satisfying the needs of your various stakeholders. And then do you look externally as you – I mean, you used the word "competitive market." If I look at pan-regional competitors, or local market competitors, or, at some point, having more global competitors recognizing what a strong market Indonesia is, how do you make sure you don't lose sight of the exogenous competition at the same time?
WILLIAM TANUWIJAYA: So we are lucky that we face all the competition since very early. So it's like, you'd like to play football. But very soon, we are actually in a messy life [INAUDIBLE: of Ronaldo? If it’s] the best of the word. So only 6 months after we launched our platform, we already need to compete with eBay. And then on our first year, we need to compete with them. And then it’s come from each family in Indonesia also, come from e-commerce platform, which they already have lots of retail footprints and so on. So we face different kind of competition. Its they actually have a better technology, better know how, even a better capital. When we first raised $100,000 we need to face eBay. When we first raised $1 million, we need to [INAUDIBLE: face …] and so on. When we first raised $100 million, we actually faced Alibaba. When we first raise $1 billion, we need to be prepare to face Amazon, is a $1 billion company. So capital will never give a tier. So by competing with the best, we will bring out the best of you. And despite we don't have the best type of luxury of capital, we don't have the luxury of technology and so on, I personally believe that we are the luckiest generation ever. Because in the internet era, it's the era of the underdog where everyone has the same opportunity to challenge the status quo against all equal need. We see all the very successful energy companies today. Google yes start as a startup, where there's so many Yahoo and so on. That has a much larger empire than them at that time. We see Facebook, for example, is already Myspace and so on. So we understand this. The biggest competition will never be the known but is always be the unknown. But over time, we also realized that we just need to compete of our own self. That's the key, right? So if you see all the best up keeping the world. It is the biggest competition that it never appears. It’s has this competition is like themselves. Every morning, we wake up in the morning, and there's like keep make sure that today are be better than yesterday. So that is the DNA that we are trying to build again. And do that philosophy again, if like you don’t done things that kill you, someone else will.
MARK FITENY: So market share is output. And the input is getting the value proposition right to the consumer and to the merchant.And if you do that, then you grow and change.
MARK FITENY: Interesting. So what products still need to be invented? What's on the roadmap. And if I look a couple years out, what's different about Tokopedia?
WILLIAM TANUWIJAYA: As I mentioned during these five months, stay at home. My wife makes using only Tokopedia to fulfill everything our family needs. So we learn a lot from this feedback loop. So two years from now, we believe that Tokopedia will continuously evolve, where offline and online experience will evolve into one seamless experience. Delivery would be much faster. [INAUDIBLE: … of the product] will be delivered the next 24 hours. Of course, we want that 100% products that you buy will be delivered within the next 24 hours. And selection will continuously cover everything – order and services, offline and online. From the customer's perspective, our customers will reflect. And we believe it can no longer imagine how life without Tokopedia. For our merchants, then we need to become their closest partners to continuously grow their business offline or online. For our buyers, the everything stores that provide essential goods and services for their everyday needs. But explicitly in the [INAUDIBLE: time of …] So my personal important patient project, for example, on the business side, we need to transform Tokopedia to become, from a marketplace, this needs to become more infrastructure as services. To be the ecosystem where not only the marketplace can help everyone in Indonesia to fulfill their needs, from the moment they wake up in the morning until they sleep again at night, from the baby grow and born when they grow up old. Into infrastructure as a surfaces that empower any business, both offline and online, to continuous relevant and efficient. So far see if I can try to add on information revolution. For example, as I mentioned that delivery experience. So in order to transform [INAUDIBLE: ] reaching out to 100% of 17,000 islands of Indonesia. We ask this question, how we can improve that in the next couple of years? So living from Amazon to China Network we stop [INAUDIBLE: ] initiative which is our fulfillment strategy. And logistic [INAUDIBLE: ]. We put the artificial intelligence inside, to bring the reality where one day you can buy any products, and all of them will be delivered in the next 24 hours – in less than 24 hours. On the organization side, the most important project that I care of personally is to build Tokopedia, to be a company that outlasts the founder’s life. We always wish that Tokopedia would be more like university [INAUDIBLE: ] where you see a lot of like companies that this is they're more like a kingdom. These have become more like family business. That is, defined by the king or the queen or the founders or the CEO. We believe that a company that can last hundreds of years, they are more like university than defined by the society. Even defined by their graduation. How could Tokopedia as an institution, where generations remembers us not by who is the king, the queen, the founders, the CEO, and they remember us because of the impact. That will be my most important focus.
MARK FITENY: That's amazing. So for the last question, to bring this full circle, if you sit where you are today, and you look at the future of commerce in Indonesia, what are you most optimistic about?
WILLIAM TANUWIJAYA: I think part of me really [INAUDIBLE: ] thinks I'm very optimist about this. I think the dilemma between [INAUDIBLE: ] and economy, this being a bit challenging in Indonesia. Because we have 10 millions of people that is actually living day by day by daily income. So we cannot have a luxury of like some more developed country, where the government can just like strictly having a lockdown, because a lot of people would just die because of do not have enough money for their daily needs. And the government, it's impossible to just subsidy all of that. If we continuously having the lockdown without the solution for the economic sector, then it will become a vicious cycle. The small business will collapse and unemployment will be at all-time. So I think with this we will be accelerating that – if we embrace technology like today, despite a different time zone and a space, we can still combat this conversation and can be seen by so many people at their home. We just need to embrace more technology. If we embrace this technology, then we can have hope. And this, I think, gives me a lot of hope Indonesia this type of more on the emerging market and emerging market with the fourth largest population in the world, we can actually leapfrog and accelerate from a $1 trillion country to become $10 trillion country where the engine of growth will be this technology-driven solution.
Five Insights from an Indonesian E-Commerce Giant
William Tanuwijaya is the CEO and Founder of Tokopedia, an Indonesian technology company with the biggest marketplace that is today leading the E-commerce business in Indonesia. Now in its 11th year, the company contributes more than 1% of the GDP of Indonesia.
In a special online discussion as part of the 2020 J.P. Morgan Tech Exchange, Tanuwijaya spoke to Mark J Fiteny, Head of New Economy Investment Banking, Asia Pacific and Global Head of Consumer Internet Investment Banking, J.P. Morgan.
Growing up in a small city in the largest archipelago in the world, Tanuwijaya is driven by a mission to democratize commerce through technology in Indonesia.
So what are the principles that have led to the rapid growth of Tokopedia–and what’s coming next for this powerhouse of Southeast Asian E-commerce?
Things are moving fast in Indonesia
Tokopedia has roughly 90+ million monthly active users and 8.6+ million merchants, reaching 98% of districts in Indonesia, which is a considerable achievement given the country has more than 17,000 islands. So how does this rapid growth in E-Commerce penetration compare?
Amazon started in the U.S. in 1994, and after nearly three decades of operations has reached 13% of online retail penetration. Alibaba started in China in 1999 and today already has 35% of online retail penetration.
Tanuwijaya believes Indonesia is a decade behind China - and will catch up with the U.S. in just five years from now.
In his view, the growth is being driven by three factors. First, E-commerce is a necessity in Indonesia, and Tokopedia is enabling an unprecedented diversity of products to be bought and sold. Second, 4G (and perhaps soon 5G) technology has been a ‘leapfrogging infrastructure’ in the country.
And third, the COVID-19 pandemic “is actually isolating digital adoption and transformation across the country,” he says.
We believe that we can only be successful by helping others become successful.
It’s possible to grow collaboratively
But it isn’t just the growing customer base that Tanuwijaya takes inspiration from. There are more than 8.6 million people in Indonesia that have started a business through the Tokopedia platform.
“We believe that we can only be successful by helping others become successful,” he says. “So when onboarding all of these partners, we never once eventually think of replacing them.”
For instance, when a supplier is established as a good fit, they’ll let that supplier continue doing what they do best – and try to increase all-round efficiency.
“Instead of building all the warehouses and the logistical capability by ourselves, we actually just focused on building the technology infrastructure to standardize all of our partners' operational capabilities.”
Keep trying to ‘kill’ your company
Tanuwijaya sees merit in the original Facebook mantra - move fast and break things. Indeed, he views continuous innovation as a business necessity and has his team constantly reflecting inward.
“We keep asking that question – ‘Are we still relevant?’ ‘Are we really addressing the pain point of the customers?’”
He recounts the story of Tencent’s Pony Ma (Ma Huateng), who built a whole team internally that was given the task of creating a product that would ‘kill’ their own QQ messaging application. The result of that exercise was the creation of WeChat – and the rest is history.
“It's like – if you don’t do things that will kill Tokopedia, someone else will.”
Build a university, not a kingdom
“On the organizational side, the most important project I have is to build a company that outlasts the founder’s life,” explains Tanuwijaya.
He has seen a number of large companies increasingly resemble family businesses, “defined by the king or the queen or the founders or the CEO.”
“We always wish that Tokopedia would be more like a university,” he says, explaining that he aims to build his team’s capabilities and create an internal culture that finds inspiration from within.
“We believe that a company can last hundreds of years - they can be more like a university than defined by the society.”
This is a lucky generation
Tokopedia is now at Series H of funding, having already attracted an impressive $2.9 billion to date. Nonetheless, Tanuwijaya believes that when it comes to the internet, “it's the era of the underdog - where everyone has the same opportunity to challenge the status quo.”
“I personally believe that we are the luckiest generation ever,” he says, and it’s the process of solving problems and creating new solutions that continue to give him motivation.
“The biggest competition will never be the known – it will always be the unknown.”