Few things are more interesting that the convergence of old and new. It’s with that in mind that we once again look to Indonesia where East Ventures, an early-stage VC that’s behind a project to digitize the country’s street vendors, has backed a new startup that is modernizing street vendors who sell fresh produce.
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In Indonesia — and other parts of Southeast Asia — street-based vendors are a common and important part of local life. Best known for street food, they also span general convenience kiosks and sellers of fruit, vegetables and snacks, who often operate through cycle-based mobile ‘stores.’
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The focus for Kedai Sayur, which means ‘vegetable store’ in Bahasa, is mobile vegetable sellers. The six-month-old startup aims to bring the benefits of the digital economy to these humble “hawkers” in Indonesia.
Perhaps the most important focus of the business is that it helps hawkers get better pricing when it comes to sourcing their produce. As things stand currently, the procurement process is dogged by issues. Most notably that’s a long supply chain which adds cost — prices increase as more middlemen take their cut — and means that vegetables are less fresh by the time they reach the hawker.
The combat that, Kedai Sayur groups orders together and negotiates better-than-retail rates for its hawkers who order their produce through an app. Orders are made by 6pm each day, and delivered to hawkers by 5am the next morning, Kedai Sayur co-founder and CEO Adrian Hernanto told TechCrunch in an interview.
The startup also provides hawkers with a financial float that allows them to upsize their order without necessarily having the money up front, as is currently required. So, for example, they can double their orders for a day if they believe that one particular vegetable can sell beyond what they usually stock.
“The problem is barging power between hawkers and distributors,” Hernanto explained. “They trade in small quantity but across many products and that’s why they can only get retail price.”
With the working capital — which is not a loan — he explained that hawkers can “order as much as they can sell and then pay later after they receive payment from customers.”
“We want to remove their working capital limits,” he added.
Full repayment is required before a hawker can make their next order, said Hernanto.
This is what the average setup for a vegetable seller in Indonesia looks like (Image via Bay Ismoyo/AFP/Getty Images)
Distribution is also an area for modernization. Kedai Sayur offers an app for consumers that allows customers to order produce remotely, which the hawker can then deliver. This augments trade that hawkers traditionally do offline and, according to Hernanto, combined with working capital, some vendors have increased their takehome profit three- or four-fold.
The most visibily striking part of Kedai Sayur’s offering to hawkers is an upgraded mode of transport: three-wheeled vehicles that are brightly branded and contain a chiller section to keep produce cool. They can be leased from the company to replace the typically-dowdy bike-based kiosks that are synonymous with hawkers.
Beyond nicer aesthetics, there are practical benefits. Hernanto said the new transport can open up other avenues for making money.
That’s because the storage section is removable and it can be set up a kiosk. Hernanto said some enterprising hawkers sell coffee, bread and other daily products on the street or at night markets in addition to their vegetable sales.
Potentially there may be other options in the future based around logistics. Kedai Sayur is in talks with prospective partners about teaming up to deliver parcels and more.
“Hawkers are the neighborhood logistics experts. There is potential to utilize them for last-mile delivery as they already have a vehicle and know the neighborhoods well,” explained Hernanto — whose co-founders include Ahmad Supriyadi, whose mother was a vegetable hawker, and Rizki Novian.