Type to search

Featured Stories Mime Stories Startup News Startups

TaniHub Chooses to Focus on B2B Segments to Increase Harvest Uptake

Share
TaniHub Chooses to Focus on B2B Segments to Increase Harvest Uptake

TaniHub is revamping its business by ceasing operations at its two warehouses in Bandung and Bali, as first reported by Katadata. This agritech startup has also stopped buying and selling food products in the Business-to-Consumer (B2C) segment which serves the household segment.

TaniHub Chooses to Focus on B2B Segments to Increase Harvest Uptake

TaniHub’s Corporate Communication Manager Bhisma Adinaya said the closure was part of the company’s business line sharpening strategy. TaniHub Group has business lines of e-commerce (TaniHub), supply chain (TaniSupply), and agricultural venture capital (TaniFund).

“We want to sharpen our focus and increase [business] growth in the B2B segment (Horeca, MSME, MT, and strategic partners). That way, the absorption of farmers’ crops will increase,” said Bhisma to DailySocial.

Due to this operational cessation, a number of employees were affected. It is not known how many employees have been laid off by TaniHub. Based on DailySocial’s monitoring on the LinkedIn page, a number of former TaniHub employees were seen looking for new job vacancies.

“We can ensure that all employee rights are properly fulfilled. Even our CEO, Pamitra Wineka, follows this employee rights fulfillment process,” he added.

However, Tanihub has not responded to our further questions regarding the background of this strategy change.

Last year, TaniHub said transactions for food products for households experienced a two to three-fold increase per day. To meet this demand, the company admits that this situation is a challenge to balance the supply and availability of food for consumers during the pandemic.

TaniHub Chooses to Focus on B2B Segments to Increase Harvest Uptake

B2C Market Challenges

Tunnelerate Managing Partner Ivan Arie Sustiawan assessed that the agritech/e-grocery competition in the B2C segment is generally very tight. This situation will be difficult for platforms that have limited capital for subsidies in price wars and logistics.

According to Ivan, these two things are important elements to maintain customer loyalty considering that Indonesian consumers tend to like promos/discounts.

He assessed, to win the agritech market in B2, startups need to build and implement the most sustainable and efficient supply chain model from upstream to downstream.

They also need to think about a profitable assortment strategy for their business. “Don’t sell everything to everyone for the instant or quick commerce where you do the self-fulfillment,” he said.

In the context of TaniHub, the company said that sharpening its business focus in the B2B segment can help increase the absorption of crops from local farmers. It is assumed that there are issues around logistics and the imbalance of demand and supply in B2C that drives this pivot.

In contrast to B2C, the B2B model is considered more stable because there is certainty of demand and supply with large orders and periodic requests. For example, the demand for fresh staples to the restaurant or hotel industry.

In the B2C segment, especially fresh products such as fruit and vegetables, Indonesians are still accustomed to shopping at supermarkets or traditional markets so that they can choose the desired goods themselves. Another major challenge is how platform providers can meet delivery expectations quickly to maintain product quality.

TaniHub Chooses to Focus on B2B Segments to Increase Harvest Uptake

Entering its Fourth Year, TaniHub Starts Focusing on Expansion Outside Java

Previously, online grocery was predicted to have a bright future in the midst of growing digital adoption and improving inter-platform and retail consolidation.

However, this refers to the market in the Greater Jakarta area. While outside this area, there is still a lot of homework that needs to be validated because it is difficult to change shopping behavior to online, especially for housewives.

Regardless of the market potential, the agritech sector in Indonesia is indeed quite risky, be it the potential for crop failure, access to capital, distribution, and the supply chain.

Based on our records, there are several P2P lending startups for farmers who have stumbled on cases due to business payment failures. Then, recently, social commerce startup Chilibeli was also reported to have temporarily closed its operational activities.

Previously, the Ministry of Trade asked stakeholders to optimize the absorption of local harvests. According to the government, currently agricultural productivity has improved despite the weakening economic situation. However, this increase in productivity must be balanced with market access and synergies.

Facebook Notice for EU! You need to login to view and post FB Comments!
Tags: