Indonesia’s warungs Indonesia’s warungs — mom & pop retail stores that dot the archipelago — have faced several existential threats of late. If the rapid advance of convenience stores was not enough of a problem to contend with, the pandemic had a disruptive effect on consumer traffic as well as on supply chains.

But the warungs are proving to be surprisingly resilient. Recent research from DealStreetAsia backed by Bukalapak reveals that warungs stand a good chance of meeting these challenges head on. This is especially true of the stores that have fastracked their digital transformation, embracing the services offered by online-to-offline (O2O) e-commerce startups.

These current wave of O2O startups began with the formation of Mitra Bukalapak in 2016. But over the last couple of years, they have proliferated, backed by the urge to tackle one of the most vexing problems with Indonesian retail, as well as millions of dollars in private capital investments.

The O2O startups have approached the warungs with the promise of helping them deliver a wide assortment of products including FMCGs, top-up vouchers for telcos and e-wallets, financial services and even products related to gaming and entertainment. They have also made helping warungs in areas like procurement as well as book keeping part of their offering.

A pertinent question to ask is about the actual impact of these models. To investigate, DealStreetAsia went straight to the source — the warung owners. Hiring YouGov, we interviewed 1,000 warung owners across the archipelago.

Some interesting facts that have emerged through the course of the research include:

• The penetration of wholesaler/O2O applications stands at 31% with more than half first adopting apps in the past 24 months, suggesting a significant impact made by the pandemic.
• Among users of these apps, 75% professed satisfaction, versus 23% who are neutral and 2% who are dissatisfied.
• O2O app adopters have greater tendency to save and borrow money

To find out more, and to hear principals across areas like finance, FMCG and digital products speak of the transformative impact that bringing warungs in is likely to have on their business, please download the full report.