Heaptalk, Jakarta — Ula, Indonesia’s B2B marketplace app, pays attention to empowering traditional retail to gain more profit. In reaching this goal, the startup creates a resilience app system that covers features of in-app stories, bundling promo, and price strikethrough.
Indonesia’s traditional retail, known as warung, has a significant role in society as the place offers various retail stuff at affordable prices. Its location that is commonly close to resident housing or community activity centers makes people easy to access their daily needs.
According to the Head of Engineering of Ula, Samuel Pamudji, warung has contributed not only to society but also to Indonesia’s economy. “Turns out that warung makes a huge contribution to the Indonesia’s economy. There was probably around 250 billion dollars in the market which accounted for 20% of Indonesia’s GDP at the time. it is growing by about 15 billion dollars annually. It is a big industry,” delivered Samuel on Amazon Web Services (AWS) Cloud Day Indonesia 2022 (01/09).
In contrast to their contribution, Samuel recognized that warung remains underserved by related stakeholders. Warung receive less support than they deserve. He gave an example from one of Ula’s customers who had to close his warung while shopping to buy stock. The small shops are commonly self-employed with the owner or owner’s family as the shopman. Since the owner has to close the warung, there is no opportunity for the transaction. No revenue on that day.
Besides, warungs are also sensitive to price. Samuel said, “They regularly go to the main market to purchase stock. Compared to several stores in the main market, the difference in the price of Rp1,000 per box becomes important to them.” Then, if the owners do not have a private vehicle, they have to find public transportation to bring home the products.
Customer-based solution
The complicated supply chain system with highly volatile commodity prices have created a vast gap for warung to seize more profit, hindering them to attain time and cost efficiency, and other business potential. The issues have become the main reasons for Ula’s inception in 2020. “We see that there is an opportunity we can do through Ula, through technology, to help SMEs or warung,” voiced Samuel.
After conducting comprehensive research, Ula drew the warung owners’ habit, one of which is accessing three applications through smartphones, spanning Youtube, Facebook, and Whatsapp. Ula found that warung owners are very familiar with Whatsapp including the use of its features, namely stories. Aligning to its customer habit, Ula implemented in-app stories feature to communicate beneficial information to them.
Ula also discovered that the product variation sold by warung is monotone. Even though, there are many other types of products that potentially brings more profit and have better market potential. To bridge this matter, Ula provides a bundling promo that offers warung owners a special price when purchase a bundling package. The bundling promotion consist of two or more products, one product is familiar to the business owners and the rest is unpurchased products but have the large sales potential.
In addition, Ula also noticed that warung owners are sensitive to the price gap. They are willing to go further to find a cheaper price although the difference is only Rp1,000 or US$0.067. “So, we can provide notification to warungs when the price of a certain product has dropped. Therefore, this is the right time if you want to buy it,” said Samuel.
Resilience system to save budget
To provide the solution to warungs, Ula has to build and manage its system well yet can save budget. Samuel emphasized Ula’s team try to create a concept of resilience from the beginning, including designing a system when there is an interruption, the system can still run. Ula’s team picked spot instances or spare compute capacity on a cloud to support its system.
Spot Instances are known as a cost-effective computing infrastructure option if your application is running and can be interrupted at any time. The cloud provider can terminate the instances whenever it needs. Therefore, Ula’s team has built up a resilience system to tackle the sudden termination of spot instances.
By the approach, Samuel claimed Ula can serve 99.9% uptime even 134 requests per minute that can be scaled up to 41 times. “We obtain a cost optimization of 70% compared to on-demand instances. This is interesting,” uttered Samuel. On-demand instances are usually offered at a high price since the instances are dedicated to a certain client and the provider cannot terminate them suddenly.
In his conclusion, Samuel emphasized that Ula is not merely developing systems using technology but solving warung’s problems that have been the initial vision of the startup.
