Some experts will tell you it’s too late to catch the fast-moving ecommerce train in Indonesia, as names like Lazada, MatahariMall, Tokopedia, and Bukulapak may soon have the mainstream consumer market sewn up. LiteLabs — a startup and innovation lab operating in Singapore, Jakarta, and Bangalore — would argue against that idea. The international company builder’s co-founder and CEO Dipendra Singh Jain is betting that the archipelago still has many greenfield opportunities in ecommerce.
“Some of the biggest names in India were successful models in the USA,” explains Dipendra. “However, the success for these startups lies in the fact that the ventures were able to plug the holes in the [existing] operating models […] This is lacking to a certain extent in Indonesian startups, where execution still seems to be tougher in spite of the creative ideas.”
Dipendra spent his formative years in Indonesia during the early 1990s, when the internet was just getting started, he says. Abroad, he worked for a few “top Fortune 100 companies,” with stints at Dell, HP, Accenture, and others. Now, he’s back in the archipelago with what he believes is the right know-how to “capture a piece of the Indonesian ecommerce pie.”
With a modest bankroll of US$5 million, Dipendra says LiteLabs is currently working on seven in-house startup concepts. In the investment game, US$5 million is a small sum. Dipendra knows that, which is why LiteLabs won’t be able to adopt the spray and pray investment thesis in Jakarta. It also won’t be able to launch firms that can compete with those of Rocket Internet right out of the gate. Instead, Dipendra and his crew will need to aim carefully, and act more like a sniper with only a couple bullets.
LiteLabs is working on multiple projects for Indonesia. But Dipendra discloses only two of them to Tech in Asia. The first is a product called SearchOn, which isn’t live yet. Dipendra says, “SearchOn will be a game changer for online ticket bookings, for movies and events, and more.” According to him, the firm will let users set up a night out on the town, and have nearly every aspect planned for them, before they step out of the house. Ideally, SearchOn users will be able to buy cinema passes for the exact seats they want to sit in. They’ll also be able to make dinner reservations, and arrange for scheduled transportation to and from the evening’s destinations.
Many will agree movie tickets seem like a good idea in the archipelago. But others may argue transport is a problem that’s already being solved by the likes of Uber, Go-Jek, and GrabTaxi. True skeptics are sure to suggest SearchOn will need to search on for a better product-market fit, as many startups have tried to do restaurant reservations in Indonesia, but alas saw questionable local demand, and ended up pivoting. Yet Dipendra remains confident in his team’s ability to execute.
He also says LiteLabs is hatching a startup called LiteRents, which he says will be a “real estate ecommerce” site, but did not elaborate further on the business model.
Skin in the game to ensure focus
LiteLabs isn’t looking to make external investments, but instead build everything in-house. “Since we are not a [traditional] incubator, we are focused on our strategy to grow organically for the first three years,” says Dipendra. “We would be keen on acquisitions if there is a strong fit in the long term. Given that the Indonesian market will see more activity in the years to come, we will be scouting for targets. However, expansion to other Southeast Asian countries would depend on the success of our product, and if localization […] is possible.”
Dipendra says LiteLabs will use its own funds for the early stages of its in-house ventures. However, should they start to see traction, the team will search for later stage funding from outside investors like VCs and larger firms. Dipendra feels that by paying out of pocket in the beginning, the LiteLabs team will be forced to put all of its focus and passion into the first couple startups.
He shares a couple more clues. “[SearchOn] will be available online as well as on iOS and Android. Apart from these, we are working on developing an ecommerce delivery system,” he says. “We are [also] focusing on developing a logistics and supply chain model.”
Dipendra didn’t mention where the funds for LiteLabs come from exactly, but he did say that he and fellow co-founders Rishi and Manish Sharda pulled the cash together themselves. “Based on the burn rate […] we would be continuously assessing the need for capital requirements,” he adds.
In his mind, the top three challenges LiteLabs will face in Indonesia are scalability, managing regulatory issues, and understanding the way locals adopt new tech. He says, “For me right now the adoption rate is a bigger concern, considering the low internet and mobile penetration rates […] Our goal is to develop a successful product which has a high adoption rate, and which ultimately becomes synonymous [in terms of adoption] with Go-Jek, Lazada, and Lamudi.”