In emerging markets, traditional supply chains are infamous for their intricate complexity and numerous layers of intermediaries. These complex environments heavily rely on wholesalers and distributors, who act as the backbone of the chain. They provide crucial infrastructure and working capital and establish essential relationships to bridge the gap between manufacturers and distributors. Without them, finding your favorite snacks or any other products on the grocery shelves would be impossible. While many aim to increase profits by eliminating the middleman, Indonesian startup Baskit takes a different approach. It empowers wholesalers and distributors through its comprehensive cloud-based platform, bolstering the entire supply chain and preparing it for more advanced forms of digital commerce.
Baskit’s core mission is to secure the privilege of digitizing previously “offline” businesses. This is achieved by offering salesforce augmentation and automation, a robust commercial stack, and an expedient method for rapidly boosting sales. Traditional customers prioritize revenue above all else, and once they witness a genuine commitment to their interests, they become more receptive to embracing technology. As trust is built, Baskit proceeds to digitize their inventory and equips them with user-friendly tools for efficient management of warehouses, trucks, and bookkeeping. This unlocks a plethora of fresh opportunities for intermediaries, including enhanced sourcing efficiency with better pricing and leveraging the ideal product and price mix to fuel further growth.
By providing great service to middlemen, Baskit has established a formidable network of wholesalers and distributors, effectively addressing long-standing challenges that have haunted the industry for decades. Led by CEO Yann Schuermans, the company secured an impressive USD 1.5 million in pre-seed funding in March, followed by an oversubscribed seed round that brought in USD 3.3 million. Already, Baskit has empowered hundreds of customers in West Java, primarily focusing on consumer packaged goods and vital commodities such as flour and palm oil. In the near future, Baskit aims to expand into additional categories like lubricants and over-the-counter medication, offering comprehensive support across various sectors.
How Baskit enables intermediaries across Indonesia
From timeless classics like Coca-Cola to essential over-the-counter medications like paracetamol, distribution chains play a pivotal role in the lives of millions in Indonesia. These chains are the backbone of the country’s economy, contributing to approximately 50% of the GDP and providing employment for tens of millions. Despite dealing with colossal volumes, most products prioritize affordability, leaving distribution businesses with relatively slim profit margins. As a result, companies strive to boost product sales, leading to a fiercely competitive, fragmented, and intricate ecosystem. At the heart of it is a complex and competitive supply chain involving multiple stakeholders with diverse needs. Thus, constructing a truly cohesive system where everyone emerges victorious poses a considerable challenge.
During a discussion with Arteculate Asia, Yann shed light on the challenges confronted by wholesalers and distributors. Many still rely on outdated legacy systems, resulting in operational inefficiencies and a disconnect between supply and demand. A striking statistic that underscores the extent of this inefficiency is that traditional market shelves, on average, remain 20-25% empty. This can be attributed to the prevailing purchasing behaviors of retailers, who often resort to self-pick-up, and the inconsistent availability of supplies at intermediaries due to poor visibility and planning. Ultimately, this leads to higher consumer prices and missed revenue opportunities for brands, intermediaries, and retailers.
Instead of eliminating wholesalers and distributors from the supply chain like most tech companies, Baskit empowers these businesses through technology and commercial support. By utilizing Baskit’s advanced platform, companies can streamline their operations, cut costs, and uncover new sales opportunities. This results in supply chains that are efficient, transparent, and well-suited for thriving in the digital commerce landscape.
Being Partners for Effective and Comprehensive Digital Transformation
Baskit’s primary objective is to empower wholesalers and drive sales growth, but its platform goes well beyond that. According to Yann, “We go beyond digitizing sales processes and delve into other critical aspects of their business, such as leveraging data, customer insights, sourcing strategies, and redefining their approach to external financing.” By leveraging the commercial impact we generate, Baskit builds trust and establishes itself as the trusted partner to digitize these businesses for the first time, fostering a mutually beneficial partnership.
An impactful illustration of this can be seen in how Baskit empowers wholesalers and distributors to access credit. This is achieved by digitizing their transactions, enabling them to provide concrete evidence of their creditworthiness and scalability. Leveraging this foundation, Baskit establishes partnerships with financial institutions, bridging the gap for clients to access flexible financing options previously inaccessible due to limited data and restricted access.
The Origins of Baskit
Before venturing into entrepreneurship, Yann, a Brazilian and Belgian national, boasted a rich background in supply chains. His journey traces back to his family’s longstanding involvement in manufacturing and distribution, spanning over 300 years across Europe and Latin America. Building upon this legacy, Yann continued to make his mark in Asia by working for AB InBev, one of the world’s largest FMCG companies. He held various senior positions, gaining extensive operational insights into some of Asia’s most captivating supply chains, including those in China, India, and Southeast Asia. Notably, he spearheaded supply chain digitization initiatives and oversaw business units, affording him a comprehensive understanding of running a business and optimizing distribution networks.
Throughout his career, Yann keenly observed the severe neglect in various aspects of the supply chain. This neglect was particularly evident in the case of intermediaries, namely wholesalers, and distributors, who played a crucial role in enabling fragmented supply chains. Unfortunately, these intermediaries were often undervalued and dismissed as unloyal profit-seekers. Recognizing the persistent underserving of these vital players, despite their significance, Yann made the bold decision to establish Baskit in 2022. The company embarked on its commercial operations in Indonesia in November, driven by the realization that Indonesia’s supply chains are among the most fragmented and complex in Southeast Asia.
Backed by a team of early members, including Yasser Arafat Akhmad and Yoonjung Yi, and guided by esteemed advisors like Shafie Shamsuddin, former CEO of Trans Retail, Baskit experienced rapid team expansion and successfully implemented their growth strategies. While the company now enjoys significant traction in West Java, its early days were not without their fair share of obstacles.
Overcoming the struggles of building a successful startup
Yann revealed that Baskit initially faced challenges establishing partnerships with wholesalers and distributors. The main hurdle was their hesitancy to depart from legacy systems and embrace the tools offered by a software startup. “However, we quickly realized that approaching the wholesalers’ sales teams and demonstrating the simplicity and advantages of Baskit was the crucial step to securing clients,” he explained.
With an increasing number of wholesalers embracing Baskit’s platform and digitizing their operations, the company faced a new challenge: sourcing talented individuals to meet the growing demand. As a result, Baskit embarked on an expansion phase, diligently seeking out individuals with a balanced blend of operational expertise and a fervor for solving significant and relevant problems. Today, Baskit boasts a team of dedicated and passionate professionals who share the goal of revolutionizing the supply chain, making it more interconnected and efficient. “While many startups prioritize unfettered growth, our primary focus lies in cracking the code of the traditional supply chain. Particularly in the aftermath of Covid, the market is reemerging with increased digital literacy and an eagerness to explore digital solutions. We are strategically positioned to ride this wave.”
Supporting the Backbone of the Supply Chain
In an ever-evolving global economy, the significance of an efficient supply chain to meet consumer demands cannot be overstated. Within a remarkably short period, Baskit has experienced rapid expansion, leaving a palpable positive impact on the customers it serves. It has garnered respect from participants who were previously skeptical of disruptive startups entering the space without due responsibility. Looking ahead, Baskit will maintain a growth strategy that prioritizes cost efficiency, relying on superior technology, lean teams, and high-margin revenue streams to secure victories. Crucially, the team remains deeply committed to supporting traditional distribution businesses. Expanding beyond current verticals, Baskit aims to foster even greater positive transformations across Indonesia’s supply chains.