The increase in prevalence of e-commerce in Indonesia has caused the demand for courier services across the country to increase accordingly. Therefore, it may be a lucrative and profitable decision for one to start a courier service company in Indonesia.
According to the latest set of statistics, courier and logistics services in Indonesia have been registering an impressive rate of revenue growth every year. This figure typically lies between 30% and 40%. This growth has largely been attributed to the high rate of growth of the country’s logistics business, in particular the growth which has been registered in the industrial logistics and shipping goods sectors in Indonesia. Most courier and logistics companies in Indonesia are typically operated by small and medium-sized companies. For this reason, the courier service industry in Indonesia is categorized as a fragmented industry because no company has a truly large and dominating market share which would have a serious impact upon the policy direction of the sector.
One of the primary factors driving the significant growth of courier services in Indonesia is the growing e-commerce business that demands delivery of products to be sold between customers. This growth of e-commerce has in turn increased the demand for courier services across Indonesia. Therefore, to cope with the increased demand, courier service companies have been adopting new technologies which will see them keep up with the increasing level of competition which exists in Indonesia today.
Why Courier Services Are Necessary
The changes which have become evident through changes in world trade patterns, the most significant being the emergence of online trading systems commonly referred to as e-commerce, have necessitated the need for courier services. The rapid development of e-commerce has been powered by the spread of information and communication technology, including the development of mobile applications and the availability of relatively inexpensive Internet connections. With the increasing number of Internet users in Indonesia, more people are shifting to online shopping, making it necessary for businesses to adopt courier services. An increasingly tight and competitive business environment underpinned by factors such as market penetration by new competitors as well as the increasing demand for satisfactory services has also greatly contributed to the adoption of courier services by most businesses in Indonesia.
In addition, in order to increase turnover while at the same time managing operational costs, courier services across Indonesia have begun to expand their operations internationally. To fully meet the customer requirements and needs, it has become necessary for such companies to adopt the use of courier services. This allows them to offer tailor-made services to their customers while at the same time attracting new ones with the different packages they offer such as cheaper rates pick-up services with insurance coverage as well as real-time data and tracking.
Why One Should Start a Courier Business in Indonesia
To cope with the increasingly competitive business environment, many businesses in Indonesia have been formulating strategies to deal with the challenges which they would be likely to face. The impact of ICT development, increased availability of Internet connection in Indonesia, as well as more conducive trade rules between regions and countries have given rise to the growth of e-commerce and has therefore resulted in more opportunities in the courier and logistics sector. The business opportunities evident in Indonesia’s courier industry do not only stem from the shipping process but also from the storage and management in the warehouse and inventory system as well as the order management system. E-commerce’s influence upon Indonesia’s courier services is not only restricted to that of companies, but also that of individual e-stores. As one of the catalysts for the increased courier service demand in Indonesia, e-commerce has had an unparalleled influence on the growth of the courier services industry in Indonesia and will continue to do so with each passing year.
Furthermore, many businesses have been increasing their range of customers worldwide because modern technological equipment has been taking up the primary delivery mechanisms of Indonesian courier services. The relatively favorable cost of conducting business activities in Indonesia has also allowed most companies to expand their market locally, regionally, and internationally. To keep up with this increased market access, many such companies have opted to adopt the services of courier services in order to remain competitive while at the same time attracting and retaining customers.
Cost of Starting a Courier Service in Indonesia
Owners of courier service businesses which are focused on logistics and express delivery of goods and services have to consider not only shipping costs but also other relevant factors such as warehouse systems, inventory management, business insurance, and the application of ICT in facilitating operational processes to its courier services. A web-based system is also necessary for the tracing and tracking of courier services. In order to remain competitive, some courier service companies in Indonesia have been implementing ICT systems which are highly advanced and integrated. They include important operational processes, marketing, finance, and customer service provision by providing online real-time data for each stage of the work to be completed.
To start a fully operational and effective courier service in Indonesia, all stated factors have to be taken into consideration. Thus, in many cases, a significant capital investment is required. Therefore, in order to meet customer requirements effectively and efficiently, many owners of courier services in Indonesia have taken to crowdsourcing. However, crowdsourcing also includes costs which are related to integration and implementation and may therefore impose a significant financial burden on a company. Certain regulations and policies many also force certain actions to be taken by the owner of any company owner in Indonesia, and these in turn may drive up the cost of starting and operating a courier service in Indonesia.
Of course, when starting any company in Indonesia, the matter of finances must be adequately settled. Therefore, it is crucial that your company’s financial planning be adequately managed. Fortunately for you, we at Paul Hype Page & Co are able to assist you with this important matter. The financial plans which we formulate will permit your Indonesia-based company to remain in a stable and viable financial condition in spite of changes which take place with regard to the existing customer market in Indonesia.
Licenses Related to Indonesian Courier Services
For any business to operate, it must have a valid license. Just as is the case anywhere else in the world, there are specific licenses which are related to and must be used by Indonesian courier services before such a company may legally conduct business operations. The most important of these licenses is the principal license. The principal license is the license granted to a courier services company in Indonesia with reference to patent rights. It grants the company the legal rights to exclude others, both within Indonesia and beyond, from making, using, selling, and importing an invention similar to its own. Another important license is the inter-city license. This license grants a courier company the permission to conduct its operations between different cities within the country. Branch licenses allow courier service companies to open branches all over Indonesia in order to better serve the growing market. Branch licenses allow such companies to open as many branches as are desired by the company.
An agent license allows an Indonesian courier service company to enlist the services of an agent. Such an agent may either be an individual or a group. These agents will conduct business activities on behalf of the courier service company and may do so with either local of foreign clients. The national license grants a courier service company permission to operate anywhere within Indonesia, while an international license permits such a company to expand business operations to any other country in the world and by doing so, increase the level of available access to international markets.
Should you require any assistance with obtaining any of the necessary business licenses in Indonesia, we at Paul Hype Page & Co will be able to be of assistance to you. If you happen to face any difficulties in the obtaining of an Indonesian business license, we will do all we can to solve whatever the problem might be. We will also contact any necessary government authorities on your behalf if necessary.
Courier services all over Indonesia have put forth a considerable level of effort in order to achieve a level competitive advantage which can be sustained. The development of the Internet across Indonesia, the shifts in customer markets brought about by the development of e-commerce business, and changes in the target market associated with many products sold all over Indonesia have led to courier services in Indonesia having to change their approach in order to obtain the highest level of business success possible. Therefore, it is imperative that such businesses develop procedures which will cause them to thrive as they attempt to maintain their level of competitiveness within the changing business landscape in Indonesia.
Paul Hype Page & Co – OSS service provider and Asean Chartered Accountant.
Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia
Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.
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Step 5- Assist as your company to hire staffs and handle all HR matters
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Starting a Courier Service in Indonesia FAQs
Although it may nevertheless be possible for a courier service based in Indonesia to remain in operation despite not possessing every required license, the failure to do so will also cause the privileges conferred through ownership of such a license to become inaccessible to the business and its owner.
Courier services in Indonesia have the options of delivering goods via land, air, or sea. However, the size and geographical makeup of Indonesia have caused deliveries via air to have become by far the most common.