The Transformation of Traditional Kiosk

Warung Pintar

1. No Poverty 8. Decent Work and Economic Growth 9. Industry, Innovation and Infrastructure 10. Reduced Inequalities

Overview

Warung Pintar (Literal translation: smart kiosk) was founded in August 2017 by these amazing people; Agung Bezharie, a former Investment Associate, Sofian Hadiwijaya the former Vice President of Business Intelligence in one of Indonesia's prominent start-up companies, GO-JEK; Harya Putra, and Pandu Kartika Putra. With a remarkable business solution, they found an opportunity to help reduce income inequality in Indonesia and develop their entrepreneurial skills.

Involving the technology equipment, Warung Pintar supports an individual partner by helping with managing the kiosk; from buying the inventory, to selling the products. The growth is nothing short of exceptional, where it started with 7 kiosks in several areas in Jakarta, by the end of 2018, more than 1000 kiosks exist. The company is planning to expand its business to other cities. Indeed, there are around 30,000 potential partners of Warung Pintar, waiting to join the business. About 34 principals are likely to partner with them, providing inventory for each kiosk, with more than 370 different products sold.

Author

Shifa Mahdiya

Shifa Mahdiya

School

IPMI International Business School

IPMI International Business School

Professor

Amelia Naim Indrajaya

Amelia Naim Indrajaya

Innovation

Warung Pintar is a micro retail technology company with a mission to improve the community by changing the conventional Indonesian kiosk (warung) into a ‘modern version,’ by utilizing advanced technology.

The system run by Warung Pintar allows their partners to get Rp 1 million free inventory as the initial fund to start the ‘kiosk'. 100% of profit (produced by selling the products in a kiosk) goes to the partner, without profit-sharing.

According to the impact manager of Warung Pintar: "We consider ourselves as a social business which we don't take any profit from the products sold in each kiosk. Our system works by lending the inventory assets (including the kiosk and technology equipment). If the partners couldn't perform within the given time period, Warung Pintar would take back all the assets. However, we take 2-3% of profit produced by the installation of advertising from each kiosk."

The transformation of the kiosk is noticeable from its features which the things that differentiate them with other conventional kiosks. They put a surveillance camera, unlimited WiFi, charging station, prefab building, LCD TV, stove & dispensers, mini refrigerator, and digital system (slates) containing applications for goods inventory, sales and accounting figures sales of a ticket, phone credits and electricity tokens.

Paying system with QR codes is one of the interesting parts of the Warung Pintar business system. A QR code is used not only as the transaction tool but also data from the system, including customers' buying behavior and financial inclusion, are considered as a market and customer insight which are taken by the partners to set business strategy and maximize business profit.

Besides that, the company provides help in several areas such as giving direct access to goods at a cheaper price, doing promotional activities that support increasing the number of transactions, conducting regular training and mentoring for a software application, financial management as well as recording stock. Warung Pintar wants to ensure their partners eventually run the business independently and gain an entrepreneurial mindset.

The Transformation of Traditional Kiosk

Inspiration

The idea came when the traditional kiosk often visited by the founder was in danger of being evicted. Feeling sad by the situation, the founder eventually tried to help the owner get land and design the look of the kiosk.

Increasing the level of the traditional kiosk (that has been part of the everyday life of Indonesian people) by escalating the quality of its service is the main goal of Warung Pintar.

"We also image Warung Pintar can reduce the gap of income between high level and lower-middle level of social economic people by transforming micro entrepreneurs into upgraded Small Medium Enterprises and enabling them to participate in the digital economy to earn more income and improve their living standard."

Overall impact

Joining the business of Warung Pintar, people evenly increase their income around 37% and return the capital within 10-12 after open the business. It is totally different with the early conditions of people before joining Warung Pintar where 85% of them are in the middle-low economic position with monthly income below Rp5 Million.

Business benefit

Warung Pintar simplifies the supply chain process by taking out the middleman and directly buying the goods from principals then distributing them to each kiosk. This is the process behind traditional kiosks; having the ability to compete with modern retail stores by getting inventory at lower prices. In addition, by cutting the process of the supply chain, the partners of Warung Pintar can get a higher margin around 3-12% compared to if they buy goods from a middleman.

Social and environmental benefit

  • Based on the conducted research, 70% of Indonesian people have the desire to become entrepreneurs. Because of that, Warung Pintar has a purpose to help grow the entrepreneurial side of the Indonesian people.
  • In terms of social aspect, at least one kiosk must have one community with a minimum member 12 people consisting of students, employees, online drivers. The objective is to create a social community that can bring a positive impact to the community by doing several activities (watching together, religious events). These communities also play an important role in increasing the number of transactions in Warung Pintar.
  • Warung Pintar partners with Indonesia's Ministry of National Development Training as an intermediary to work together with the Indonesian Economic Creative Institution (BEKRAF) and Protection Agency and the Indonesian Manpower Placement (BNP2TKI) in order to help Indonesian workers who are coming back to Indonesia to start their own business.

Interview

Jiwo Damar Anarkie , Impact Manager

Jiwo Damar Anarkie , Impact Manager

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Warung Pintar

Warung Pintar

Jakarta, ID

Business Website: www.warungpintar.co.id

Year Founded: 2017

Number of Employees: 11 to 50

Warung Pintar is a micro-retail technology company with a mission to bring through digitization for the grassroots population to improve the living of community surrounding by changing the conventional system and look of Indonesian traditional kiosk into its modern version by utilizing the advanced technology.