Indonesia’s Astro , a nation comprising numerous islands, has long been a source of issues for logistics companies operating there. Yet, a lot of companies (especially local ones and those from fellow ASEAN countries).
Among those brave ones is Astro Indonesia. Based in Jakarta, the online grocery delivery firm promising 15-minute delivery margin was recently able to seal a funding of USD$ 60 million. This was done via a Series B financing round. This lifted total funding to USD$90 million since it launched itself approximately nine months ago.
Who established Astro?
Astro was created by Tokopedia veteran Vincent Tjendra. His new company plans to spend its funding proceeds on product development, user acquisition and hiring more employees to expand the workforce.
What are the key features of Astro?
Astra has a three-click checkout (where users can browse for the product, add to cart and select payment). It also offers a personalized experience enabling ease of product discovery and also guarantees customer satisfaction, by replacing damaged or wrong items in 15 minutes.
Surprisingly, Indonesia’s Astro raises $60m thanks to its strong brand promise and its potential to improve Indonesia’s eCommerce.
Who led the Series B round?
Accel, Citius and Tiger Global were leading the Series B round, with further participation from AC Ventures, Lightspeed, Global Founders Capital and Sequoia Capital India. Astro Indonesia declined to disclose its valuation post money.
The speed at which the company attracted investment exhibits the fact that a hefty upfront investment in the grocery delivery business. Indonesia’s Astro raises $60m for a very good reason. Why? Because it is about establishing a robust infrastructure for logistics quickly, locking in numerous loyal customers ahead of rivals.
Is Astro’s main area of focus a popular area of business for many others?
Online delivery of groceries, especially on-demand delivery got a much needed boost during the COVID-19 pandemic not just in Indonesia and ASEAN but also around the world. In Indonesia, the landscape for such a delivery mechanism is complex.
Moreover, penetration for online delivery of groceries is quite low. Estimates suggest it to be at 0.5% in comparison to 6% in China and 34% in the Republic of Korea (South Korea).
It indicates a crucial opportunity for numerous eCommerce companies and for Astro Indonesia, in terms of delivering groceries and other essentials online in Indonesia. The latter is doing its best to prove that ordering groceries online is much better than going grocery shopping outside in today’s uncertain times.
Surprisingly, the market for online grocery delivery in Indonesia is projected to reach USD$ 6 billion by the year 2025.
Astro’s value proposition – what does it have to offer?
Astro Indonesia offers a delivery margin of 15 minutes within an optimum range of two to three kilometers. Such is done via its network of partner stores. They are basically distribution hubs which have been set up only for online shopping which complement Indonesia’s Astro 15 minutes delivery.
The online retailer decided to go for a cash-intensive model. Reason being is that it owns the whole user journey, ranging from inventory sourcing, supply chain to the end delivery. The benefit of such an approach is that the company is able to monitor customer experience and service quality on its own.
What are the operating locations of Astro and against whom is it exactly competing?
Astro Indonesia currently operates at almost 50 places across the Greater Jakarta metropolitan area, which has 30 million residents. Current fleet stands at around 1,000 delivery drivers. According to the company, revenues grew more than 10 times over the previous few months whereas app downloads reached the one million mark.
The startup has competitors in local firms namely: HappyFresh, Sayurbox and TaniHub. Astro’s customers range from young parents at home to working professionals looking for convenience. Indonesia’s Astro raises $60m thanks to its strong brand promise and robust infrastructure.
According to the company’s founder, the business of delivering groceries requires a lot of cash. But he is optimistic about margins improving when the business begins scaling towards growth. The company’s main revenue is derived from the gross margin earned from selling groceries and from the delivery charges customers pay.
Indonesia’s Astro 15 minutes delivery is possible thanks to its chain of partner stores. They help reduce the delivery distance by being placed strategically at key geographical locations.
A large portion of the firm’s expenses come from delivery. Yet Astro’s founder is of the view that these expenses will reduce in time as the company deploys more hubs and subsequently cuts down the delivery distance for more areas to be covered.
How can Astro’s growth be possible?
The momentum of high growth driving Astro Indonesia is possible with a strong love and affinity with customers, with total app downloads almost one million within the first six months, and also receiving high ratings and good reviews from customers as well.
Recent partners have also exhibited further usage and closeness over time. This results in overall spending growth on the platform. The high frequency and high affinity behavior enables the firm to drive strong finances to achieve top-notch growth for a long time.
This is among the many reasons Indonesia’s Astro raises $60m timely and with a proven promise given its delivery margin. Indonesia’s Astro 15 minutes delivery is not a theoretical promise; it is possible thanks to its chain of partner stores placed geographically smartly in the Greater Jakarta metropolitan area.
For Astro, such an opportunity is great and yet it is just the beginning as groceries in Indonesia ranks among the biggest business and retail sectors. Digital penetration is however among the lowest, which is 0.4 percent in comparison to overall penetration of 10 percent, in Indonesia’s eCommerce sector.
The COVID-19 pandemic was able to drive digital adoption upwards and the opportunity is quite large, especially with eCommerce in Indonesia. This opportunity is going to become a USD$ 6 billion one within the next 3 years. This is a billion dollar opportunity which can be unveiled each year.
What does Vincent Tjendra have to say for Astro’s mission?
Astra’s co-founder and Chief Executive Officer Vincent Tjendra is enthusiastic about his venture. He stated the company’s mission is making people’s lives easier and simpler. The company‘s employees have continuously served customers whenever they needed Astro’s help the most, especially when the Omicron variant caused havoc in Indonesia.
He felt proud at his startup partnering with well known names like Accel, Citius and Tiger Global to scale its mission. Astro promises to continuously strive on making an impressive organization with a talented and qualified workforce all across Indonesia, delivering top-notch customer experience.
Indonesia’s Astro 15 minutes delivery Modus Operandi is based on a solid basis thanks to the network of partner stores and distribution centers.
Astro will also be working together with local businesses for its private label launch. The initial launch included a variety of breads and coffee, and seasonal treats like desserts and sweet cakes for the holy month of Ramadan.
Such a start is basically an extended part of Astro’s first efforts in securing collaboration with local farmers. This will help provide them with wider access to the target audience. Hydroponic and Fresh vegetables, and fruits, of a wide variety will be provided to customers in 15 minutes.
Additionally, Astro is also offering more than 1,500 stock keeping units (SKUs) at competent prices available round the clock on the app. And, Indonesia’s Astro 15 minutes delivery is key to ensuring top notch customer and user experience.
Moreover, it is made with accessibility for all sorts of customers in mind, making sure it is user-friendly and straightforward for those shopping for groceries online for the first time.