Logistics in SEA’s largest economy
Indonesia is ASEAN’s largest economy with a nominal GDP of 1.1 trillion dollars and a GDP per capita of USD 3800 which is approximately twice that of India’s. A unique feature of Indonesia is that it’s an archipelago meaning it’s not a contiguous land mass like most countries are. Instead, Indonesia is a collection of Islands which makes moving people and things across the country very challenging.
As you can imagine logistics in Indonesia is an extremely inefficient & costly affair. In tier 2 and tier 3 cities, shipping costs can often add up to 40 per cent of e-commerce basket sizes, serving as a major barrier to mass e-commerce adoption in the country.
Shipper addresses major problems in Indonesia’s logistics sector including lack of transparency, inefficient tracking and confusing mix of warehousing and shipping options. Shipper is founded by Budi Hondoko and later joined by Phil Opamuratawongse. Earlier this year Shipper raised USD 20M for their Series A from Prosus and others.
Abdul Paravengal, the CFO of Shipper and a common friend, introduced me to Phil Opamuratawongse. When I did an introductory call with Phil I realized that he returned to South East Asia after working at McKinsey and a Venture Capital funding Silicon Valley. In fact, Phil was born in Thailand and later immigrated to USA as a young boy along with his family.
Naturally, why and how he made his way back to SEA were the first questions that occurred to me. I also wondered how does someone with little exposure to the local economy could end up building a large business there.
In this episode…
I asked him these questions and more. It made for a very interesting conversation. This also happens to be the first founder we have interviewed at The Termsheet who is from South East Asia. Naturally, I have asked him about Indonesia’s startup ecosystem and the opportunity there. So, I am very excited to bring this episode to you
A special mention to Abdul Paravengal who introduced me to Phil. Thanks Abdul!