The value of the digital economy is expected to continue to grow and according to a report from Google, it is estimated to reach up to US$360 billion. In your opinion, what is the role of startups in continuing to play an important role as a catalyst for digital economic growth?
Indonesia itself has a growing economy because we know that currently Indonesia’s population is dominated by Gen Z and millennials. So these two generations are in a productive age, where they actively utilize digital technology to fulfill their daily needs. Therefore, the role of startups is very crucial because most of the startups are utilizing technology to be able to deliver their products to their customers well. So, the backbone of the startup definitely is generations. Because of this, we really want the Indonesian economy to grow because we get a demographic bonus, where most of the population is at a very young age.
Indonesia’s economic potential is growing but facing a perfect storm. How does Social Bella deal with these uncertain conditions?
For us, this is actually a strategy from the start, when we founded Social Bella we had two concepts. We need a business model and at the same time, we also need a future-proof organization. It is a business model that can be sustainable in the sense that this business model must be a business model that is adaptive over time. The second is a future-proof organization which is also very important because this business is handled and run by a team or organization. We have put a lot of attention to our organization to be able to adapt to the business model because the business model will always change. So, the way we think about building the whole ecosystem so that we can serve our customers in the best and most efficient way.
On top of that, there are people who run this business model so the combination of the two actually always becomes our strength to deal with any situation. Not only when there is a crisis, but also when the economy is growing. For example, in 2020-2021 as we all know digital business is growing very fast because of the pandemic, and now everything has to be digital. A good organization means they can adapt quickly so they can capture this opportunity at the same time. However, the pandemic crisis is over, people are starting to go out. How this business organization is able to face this challenge so that we not only survive but also strive.
We know that the digitization of infrastructure in Indonesia, both digital and physical, is still uneven. How will Social Bella take advantage of this opportunity to encourage digital equality so that the digital economy can be evenly distributed to regions in tier 2 and 3?
In Indonesia itself, we see gaps or differentiation between big cities and smaller cities. But the gap is getting smaller. We realized that especially in tier 2, it has been much more covered in the last ten years. The government’s initiative and the growth of the startup become the supporting factors. But we are still seeing very clear gaps between tier 3 cities and many other smaller cities.
Our focus during the first and second years, when we started launching, we had omnichannel and focused on tiers one and two first. Now we’ve started to shift our focus to tier 3 even to tier 4, the cities are much smaller but we can see the huge potential there, and the way for us to get there is with our omnichannel strategy. The way for our point of entry is from the presence of the Sociolla Store, especially in crowded areas such as shopping malls.
Then from the Sociolla Store itself, we build a whole technology to enable the omnichannel experience where we also encourage digital behavior, for example, how to know what items they want to buy, and how they can understand what their needs are. With Sociolla Omnichannel, we can make it easier when people in these small towns want to buy a product because they can buy directly online and offline according to their needs. Besides, they adapt to digital use to find information about their needs will be much improved. We conduct education directly, on how to use Soco apps to figure out what are their needs.
The second is also to figure out what product is suitable for their skin problems. From there, there are many things that we can encourage people to do, such as to share whether the product is suitable for them. Hopefully, their digital penetration adaptation in these small cities will improve by itself. Because when they are already used to using our application for their beauty and personal care needs, in the end they will also start to get used to using similar things.
Collaboration is essential to technological innovation and also to the digital economy. How does Sociolla Bella collaborate to grow a sustainable digital ecosystem?
When it comes to collaborations with Social Bella, from the first day we were founded, it has been full of collaborations. Initially, as Sociolla, we had collaboration partners for brands in two ways, marketing partners as well as sales partners. In the sense of collaboration, how we can provide the best education about one brand to their potential customers. Then over time, Social Bella has grown from Sociolla which is only online e-commerce to become omnichannel. Then, we also have B2B, we have our own media so this collaboration escalates to a much deeper level.
For example, when we collaborate with brands, we help in terms of brand awareness and education, on how to use the products. But at the same time, we realize that with the amount of influence we have, we also need to put forward not only the brand but also how to create good awareness among customers so that the brand can also be sustainable.
We also understand customer dynamics, we must understand the need for Social Bella’s role as a central platform for collaboration. When we collaborate with brands to do marketing, at the same time we become a good platform for customers to share feedback and we will provide feedback to brands.
The agenda for inclusive digital economic growth is also marked by alignment with ESG. In more detail, how is it implemented in Social Bella? What are the challenges faced?
In this case, when Sociolla implements ESG, especially with regard to environmental sustainability, we don’t want to just get involved, only focus on something that is campaign or temporary just to get publicity. We ourselves focus a lot on initiatives that are helpful to the environment and also good in business. For example, when we build a brand, we always focus on the long term, not just a brand that can sell as much as possible and then stops when no one can buy anymore. We provide the principle that we must always be transparent, and provide information directly to customers. So, we are very selective when working with brand partners, not those that focus only on the economy and don’t care about the value and quality of their products.
We convey the criteria for brands to have sustainability, in the context their business must be able to provide good products. Second, the content of the information provided must also be correct, it cannot be based on claims, for example, claims this brand is organic but in fact, it is not. And what we do in reality is we work with them to continuously try to create, especially local brands. Local brands are easier, so we encourage them to be able to create packaging that is more environmentally friendly, for example, packaging that is much smaller for trials.
Then we also carried out initiatives with several international and local organic brands to do ‘waste down beauty ups’ and ‘waste down changes up’. We encourage both combinations through offline stores spread across Indonesia, currently, we have 50 stores. Customers can come with their used packaging, any brand when they collect, then we give SOCO Points which they can use for shopping.
Our initial target was to be able to collect 3 tons a year, in collaboration with Waste4Change. But surprisingly, until now it has managed to collect more than 20 tons from all over Indonesia. We see that this is a very extraordinary initiative, by the time they collect, they are indirectly contributing to recycling. At the same time they’re going to the store, they’re also getting access to information, maybe what products are suitable, something that we’re pushing from a business side as well.
Then, we became one of the e-commerce companies in early 2022 that dared to do zero bubble wrap. We have stopped using bubble wrap anymore, also pushing to use only eco-friendly packaging. This is something very important because in the end bubble wrap packaging is not needed. It is more difficult for consumers to open it, and this plastic is not environmentally friendly because it is difficult to recycle and takes a long time. We consistently do some of these things and we realize that the long-term economic impact will be good for business interests as well.
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