Iruna eLogistics, a logistics startup company, plans to open two new fulfillment centers in Surabaya and Medan by the end of this year as part of its rapid expansion to provide back-end logistics services to Indonesia’s small and medium-sized enterprises.
Indonesia’s small and medium-sized businesses have embraced e-commerce and digital marketing platforms to boost sales in the last two years. However, they often find high warehousing and transportation costs expensive and experience complications in tracking inventory, which in turn hinder growth.
Iruna, which was founded by logistic veteran Yan Hendry Jauwena last December, tries to address the problem by offering integrated logistics solutions which manage the storage, packaging, handling and delivery of items for small business.
“We wanted to improve the ecosystem by taking care of the back-end issues involved in online commerce. That way the small and medium-sized businesses can focus only on the production and marketing of their products,” Maria Bebasari, Iruna’s vice president for marketing and communication, said on Tuesday.
Currently, Iruna handles delivery of more than 1,000 types of items a day, ranging from tiny soaps to bulky furniture from its 5,000-square-meter space in Sunter, North Jakarta. The facility is equipped with freezers and coolers to handle food and beverage delivery as well as secured storage for items worth more than Rp 5 million ($374), Maria said.
Still, the company is not yet able to transport gold — which requires a separate license — or living plants or animals, she said.
Iruna plans to open similar facilities in Surabaya next month and in Medan by the end of the year, occupying an area of 2,000 to 3,000 square meters each, Maria said.
Maria said e-commerce consumers are concentrated in big cities despite vendors being spread out across the archipelago, making it costly for individual item delivery.
“It’s more economical for both the producers and consumers if the delivery is done from our warehouse,” Maria said, adding that their storage and handling facilities differentiate the company from existing logistics firms like state-owned Pos Indonesia, Tiki or JNE.
Maria said that Iruna targets to deliver 1 million different types of items and add six more fulfillment centers across the archipelago over the next three years, fully confident in the country’s e-commerce prospects.
Indonesia e-commerce market is projected to reach $130 billion in sales by 2020, according to an estimate from the Ministry of Communication and Information Technology.