JaPang Provides Grocery Supply Chain Innovation to Focus on Outside Java
Recently received seed funding from angel investors; soon to close the pre-series A funding in January 2022
Yenny Yusra - 29 December 2021
The huge opportunity to disrupt the system of providing rice, chicken and eggs as staple food for the community has inspired Jaringan Pangan (JaPang) to present a breakthrough in the distribution system empowered by technology. In particular, JaPang serves lots of customers outside Java for its product and technology services. This startup officially launched in April 2021, targeting the B2B segment.
Jaringan Pangan Indonesia's Founder & CEO, Benny Tjong said to DailySocial that the reason they focus on rice, chicken and eggs is because the products has a large volume. For rice alone, the market opportunity is recorded at around $22 billion per year.
"Aside from volume basis, these products are not easily rotten. Rice is guaranteed as a lifetime product, while we sold frozen chicken, it can stay longer. Likewise for eggs, which mostly have at least 30 days shelf life from its laying," Benny said.
Partnership with local farmers
In order to provide these products, JaPang has established partnerships with local farmers. It is expected to give them direct access to the target market, which is still difficult. At least 350 rice farmers have joined, 100 chicken farmers and 20 chicken egg farmers. JaPang also has 45 B2B clients in various cities.
"We also sell complimentary products such as cooking oil and sugar. We developed our private label for all of these products. These products are also complementary to basic food products," Benny added.
Focusing on cities outside Java, JaPang claims to have covered most cities in Kalimantan. They also target Sulawesi, Maluku and Papua. In particular, JaPang has several revenue streams, B2B for distributors and agents, as well as B2B2C specifically for retail and their flagship initiative, "Jawara" (JApang WARung RAkyat).
Jawara for B2B2C
In addition to bridging the distributors and agents needs, JaPang helps them distribute and sell all products. Apart from having partners in various areas and even in several cities that are included in the primary city category, JaPang will open its own depot, all of which are managed by the JaPang team. This is related to the company's next step to develop the B2B2C segment, Jawara.
"We present Jawara for SMEs by creating a social impact for those novice entrepreneurs who want to star a business. In terms of capital, we will provide capital in the form of stock by selling rice, eggs and chicken," Benny said.
He added that they also partnered with several financial institutions to provide capital. It is expected that more partners from other financial institutions will join JaPang to help the Jawaras.
This latest initiative is still concentrated in the Greater Jakarta area. However, JaPang targets to expand throughout Indonesia in the future. In the first quarter of 2022, they target to reach around 10 thousand Jawaras.
In order to simplify the process, JaPang will be managing the launched depots. In the future, the it can be functioned as a dark store (that only serves online transactions) and will adopt an omnichannel strategy for pick up or delivery. Currently, JaPang has 5 depots in Jabodetabek and 5 others outside Java.
"Currently, we have reached more than 100 Jawaras in Jabodetabek and it is estimated to reach 500 this month. In January 2022, Jawara is to expand to Surabaya, followed by other big cities," Benny said.
To date, JaPang has secured seed funding with a total value of $500 thousand or equivalent to 7.1 billion Rupiah. This amount is a combination of the founders' investment and fresh funds from several angel investors. In order to accelerate business growth and expansion plans, JaPang is currently in the process of finalizing the pre-series A fundraising. If it goes well, JaPang will announce the news at the end of January 2022.
In addition to fundraising, JaPang is currently developing an app. It has been launched for B2B clients, but since it is still difficult to adopt them online, this app is currently available for internal. In the future, JaPang will develop an app for all partners to buy products, as well as for Jawara and the end consumers.
"It's not exclusive for Jawara, buyers will be able to find out where the nearest Jawara is. Everything is currently under development forthe app," Benny added.
In 2022, JaPang will focus on introducing Jawara to the wider market. This includes acquiring more Jawaras, especially those who are affected by the pandemic and want to earn additional income by joining Jawara. The logistics development alone is part of the company's roadmap. They are currently utilizing third party logistics.
"Our focus remains on B2B and Jawara clients, as well as how we can have food security and help SMEs have economic resilience," Benny said.
–Original article is in Indonesian, translated by Kristin Siagian