Indonesian furniture-as-a-service startups add a fresh coat of color to the industry

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IN FOCUS

In today’s newsletter, we look at:

How Indonesian furniture startups are exploring new models to thrive Reliance Jio’s new US$12 feature phone How this serial founder bootstrapped her beauty brand Coco & Eve to profitability

Hi there,

Browsing furniture shops took over my life as I prepared to move into my new home a couple of years ago.

Having gone through the process of purchasing furniture and having it assembled, the thought of moving somewhere else, and having to go through the whole process of disassembling and reassembling once more, now fills me with dread.

Even if I stay in place for a while, furniture suffers from wear and tear, and it will have to be cleaned and repaired on occasion.

In Indonesia, a number of startups have emerged to address the hassle of owning furniture – a topic my colleague Jofie explores in this week’s Big Story. Instead of buying furniture, why not rent it and have the startup be responsible for maintenance costs instead?

This model may be especially attractive to businesses, which have to deal more frequently with issues like maintenance, having a variety of pieces, and scaling up – or down. It is particularly suitable for companies that operate an asset-light model and want to save on fixed costs.

Startups like Bioma offer a furniture rental service, with clients ranging from startups to conventional companies, property firms, and F&B businesses. The firm itself is also asset-light, partnering with third-party brands to source the actual furniture.

These days, even furniture can be “as a service.”

Meanwhile, in this week’s Hot Take, I look at Reliance Jio’s new US$12 feature phone, and how it is part of a trend in which market leaders try to expand their total addressable market by making their products and services more affordable.

— Simon

THE BIG STORY

Furniture startups remodel Indonesia’s billion-dollar market with customization, rental options

Firms like Bioma and Monoliving are setting themselves apart from players like Dekoruma with their innovative business models.

THE HOT TAKE

Reliance Jio introduces new feature phone for US$12

Here’s what happened:

The JioBharat is an entry-level device equipped with basic internet services. With a user base of over 439 million, the Indian telco giant is going for the 250 million users who are still in the 2G era. The beta trial for the first 1 million JioBharat phones will begin on July 7.

Here’s our take:

Reliance Jio continues to disrupt the Indian mobile phone market.

It first made waves in 2016 by launching mobile and data services at “ridiculously low” prices – a move which drove out several telecom operators and established Reliance Jio as the dominant player in India.

Then, it earmarked US$25 billion to rollout 5G services, aiming to cover every town in India by the end of 2023.

Now, it has launched the JioBharat, a basic feature phone that retails for just 999 Indian rupees, or around US$12.

These phones may not seem like much, even compared to the first iPhone model. But they do allow users to make unlimited calls, stream music, watch videos, and access the unified payments interface, which is India’s national instant payments system.

Akash Ambani, chairman of Reliance Jio, noted that there are still 250 million Indians who “remain ‘trapped’ in the 2G era, at a time when the world stands at the cusp of a 5G revolution.”

Indeed, there is a stark juxtaposition between these 250 million Indians and the ones who can afford to buy an iPhone 14 Pro – from one of the new Apple stores in Mumbai or Delhi – which costs 130x the JioBharat.

While an iPhone may be out of reach for many poor Indians living in rural areas, the JioBharat can help to bridge the gap.

This initiative is the latest example of how some tech companies are looking to target previously unreached segments of the market.

Recently, Grab, the Singapore-headquartered super app whose services include food delivery and ride-hailing, has been offering lower-priced solutions. An example is the reintroduction of GrabShare, which allows customers to pay a lower price in exchange for sharing a ride with other passengers.

The company’s taking this seriously. One of the reasons given for its recent unexpected layoffs was the need to achieve cost leadership in order to offer “even more affordable services.”

Meanwhile, EV manufacturer Tesla just announced a record number of vehicle deliveries, beating market estimates following price cuts earlier in the year.

Back in January, CEO Elon Musk said that there were “a vast number of people that want to buy a Tesla car but can’t afford it.”

Some analysts are now describing the cuts as “a smart poker move” that will pay “major dividends … especially for the China market.”

Of course, mobile phones, ride-sharing services, and electric cars are very different things. But the trend is clear – market leaders are in a position to increase the size of the whole market by making their products and services more affordable.

NEWS YOU SHOULD KNOW

Also check out Tech in Asia’s coverage of the ecommerce scene here.

1️⃣ Needle raises $1.2m to help optimize ecommerce marketing with AI: The Singapore-based firm provides personalized recommendations and automates campaign creation, helping clients reduce costs and improve ROI.

2️⃣ Rebel Foods eyes $100m in revenue in Saudi Arabia expansion: The Indian unicorn hopes to operate 60 cloud kitchens in Saudi Arabia by the end of this year.

3️⃣ Shein denies reports of US IPO filing: The online ultra-fast fashion giant said it has no IPO plans.

4️⃣ Baskit raises $3.3m amid tough B2B ecommerce landscape: While the company currently operates largely in the West Java region, it plans to use the fresh funds to expand into Greater Jakarta.

FYI

1️⃣ How serial founder bootstrapped beauty brand Coco & Eve to profitability, strong growth: The Singapore-based firm expects its sales to grow 40% year on year in 2023.

2️⃣ Key takeaways from J&T’s prospectus: rapid China growth offsets slowing SEA numbers: Apart from SEA and China, the delivery company has recently expanded operations to the Middle East and Latin America.

That’s it for this edition – we hope you liked it! Do also check out previous issues of the newsletter here.

See you next time!