Indonesia is located in the ring of fire, surrounded by volcanic mountains, which makes its land fertile. That not only made us the leading country in agriculture but also supported our population to be one of the largest in the world. 

While over the last few decades, young people have been increasingly moving to cities, the land is still there and people still need to be fed. Sensing the opportunities, entrepreneurs have moved in, backed by investors, to increase the efficiency of agriculture and supply chain of agricultural products, including fruit and vegetables we eat every day. 


Agritech in Indonesia

Agritech is not the new kid on the block; they’ve been here since early 2010s but more players started to join in 2015-2016. Pushed by the pandemic they are getting more and more popular these days. There’s a lot of different segments in agritech and one of the most popular one that’s close to the consumer heart is grocery/agriculture eCommerce, i.e. leveraging the internet to deliver agricultural products to consumers. 

The sector is still in its early stage but we can see players like Happyfresh (fulfillment service of fresh groceries from supermarket/stores), Chilibeli (community group buy), Tanihub (fresh produce from farmers), and Sayurbox (fresh produce from farmers). Consumer internet giants like Shopee and Tokopedia also started to join the party offering Shopee Segar and Tokomart last year, during the pandemic.

We talked to one of the players on the ground to understand more about the business, what are the challenges, and how they’re changing the mindset and perspective of people living in rural areas.



Started in 2016, Sayurbox’s business model is to manage an end to end solution starting of the fresh product supply chain, from farmers to distribution and end consumers. 

This process aims to transform fragmented areas of agriculture, unstructured with a long and winding distribution process, to a simpler and easy to control process of distributing fresh goods to customers. 

SayurBox recently received a series B funding, led by Astra Digital International and Syngenta Group Ventures and with Global Brain Corporation, Ondine Capital, and others also participating in the round.

We spoke with Amanda Cole (CEO of Sayurbox) and her team on their future plan and she said, “We’re going to focus more on increasing the capacity before geographical expansion.The objective is to fulfil the consumer demand in areas they cover, and increase the density/penetration.”


The supplier/farmers in Indonesia

Before we dive deep into what the future will look like for agritech players in Indonesia, it’s best for us to understand how the suppliers in this case, the farmers, look like in Indonesia. Sayurbox team shared with us the biggest challenges they faced when onboarding the farmers to their platform:

  • Rural and fragmented
    Most farmers are still living in the rural areas and they are fragmented – this is not the typical large automated farming you see in the US for example. Many of these areas are hard to reach and hard for an organised distribution system to function well. 
  • Tengkulak
    Tengkulak are supposed to be the distributors who manage the distribution system from farmers to the end consumers. Tengkulak initially bridged the gap of inefficiency flows of information, goods and funding between farmers and the market – however, over the years with their positioning they have been profiteering. They are well known for more than a century as the ones who took most of the profits from the goods sold by farmers.  In many cases Tengkulak are the ones who lend some money to small farmers. And when farmers are harvesting, they are forced to sell the crops to these Tengkulak.
  • Mentality
    With Tengkulak controlling the market, farmers mostly don’t understand anything that happens in the market beyond the parties that lease them land or collect their produce. They tend to play by ear on best selling goods in the market – and such information has lag, often resulting in cycles of overproduction where farmers are hurt the most.


Understanding the consumer needs

Farmers are one side of the fresh produce ecommerce,  fulfilling the consumer needs is also very important. For Sayurbox, the top selling items are not anything fancy but local staples like Papaya and Mango in the fruit category.  For veggies, the popular items include ingredients for gado-gado (Indonesian style salad with sweet-savory peanut sauce) like broccoli, water spinach, cabbage, lettuce, and other leafy greens. Most of their customers who live in urban areas say they have challenges finding fresh, clean and good quality greens for salads.

The most common Indonesian gado-gado.
The most common Indonesian gado-gado.

While the whole market is price sensitive, customers living in the 1st tier cities also prefer high quality products. Amanda shared, “To balance the two, SayurBox usually does product grading, they supply grade A products to the customers demanding highest quality, but they also lower price grade B products to the more price sensitive customers.”


Pain points solved by Sayurbox 

Based on the pointers above, Sayurbox is trying to address farmers challenges to meet with customers’ needs by providing:

  • Supply chain
    A way to cut down the Tengkulak in order to create a simpler and easy system for farmers to understand, and actually benefit from, the market.
  • Harvest planning
    With tech support and an end to end management, farmers can do better harvest planning. a more structured plan allows farmers to stagger their harvest almost every day with various different vegetables, based on projected and actual market demand
  • Quality distribution
    They make sure the fresh goods harvested by farmers are in a good shipping condition when it gets distributed to the end customers. As per now, they’re still doing in-house logistics with a few fleet partners to maintain the quality of the products they are selling on their platform.


The ecosystem in China

We’ve seen that tech players in Indonesia are trying to tackle grocery/agriculture ecommerce and this scene is not a new thing. We’ve also seen that many tech giants in China are also going to the grocery/agriculture eCommerce. One of the biggest is Hema by Alibaba. 

Hema (盒⻢) or literally translated to fresh hippo is an integration of online-offline supermarket, logistics, and value chain that aimed at giving customers an integrated experience with especially fresh produce. I visited one of their stores in Hangzhou right before covid hit and was impressed by the high quality products with a cheaper price compared to other marketplaces.

Few days ago, I talked to Randolph Hsu from Ondine Capital, one of the investors in Sayurbox. I asked him if what happened in China could also be a trend in Indonesia. And here’s his answer: “Top tech players might have the urge to do fresh goods eCommerce and there are a few reasons for that:

  1. They want traffic to get a full coverage on everything;
  2. It’s a more complicated business because it’s not just selling fresh goods but it’s also a logistic business to control the supply chain;
  3. It’s a good story to tell others that it’s a high margin business “even though I haven’t seen any tech companies get profit from this business.”

Startups will find it increasingly hard to compete against multi-vertical tech giants for consumer traffic – on the other hand giants do not have the bandwidth or willingness to go full upstream to control the supply chain. That creates opportunities for founders. 

He also shared about a company called Baiguoyuan (百果园), one of the biggest fruit sellers in China in terms of revenue. Similar to SayurBox, Baiguoyuanmanages an end-to-end business model to supply fresh fruit. This end-to-end model allows them to control the supply chain especially in terms of quality and price. What’s unique about Baiguoyuan is that they didn’t do all the consumer distribution in house,instead they do an open partnership with tech players such as Meituan and for delivery and use WeChat for their marketing.

Randolph also mentioned the similarities between Baiguoyuan and Sayurbox is one of the reasons why Ondine decided to invest in Sayurbox. “I don’t think traffic is the key to success but instead how to create value by providing quality and controlling the supply chain is what’s more important.”

The future of fresh produce ecommerce is still uncertain, with the market in early stages and most of the consumers concentrated in tier 1 cities. However, with the surrounding infrastructure and customer education maturing, it is the time for innovation in the agricultural supply chain. 

And as what Randolph mentioned before that traffic is not the key to success,  rather, building a sustainable business model is more important.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].