JakartaGlobe, By Sylviana Hamdani on 4:35 pm November 28, 2013.
Despite hackers and spies, the Internet is perhaps the greatest invention of the 20th century. The technology has literally expanded our world and made what was once out of reach completely accessible. The technology also allows us to traverse time and space, meet new people and start great collaborations.
The Internet is the engine that propels Project Hope, a new collaboration — not to be confused with the international health care organization — by the local logistics firm Caraka Group and the Japanese e-commerce company Rakuten, to help people in Wamena, Papua.
“Wamena is one of the farthest points in Indonesia,” said Rocky J. Pesik, chief executive of Caraka Group. “It’s the one place that people don’t have access to many things, [even] the most basic things, such as rice cookers and clothes. Everything is so expensive and difficult to get there.”
Caraka Group is the second-largest logistics company in Indonesia, with a distribution line covering 323 cities and small towns in the archipelago.
Last year, Caraka expanded its distribution line to Wamena and discovered much about the place.
Wamena is a quiet little town nestled in the heart of Papua’s highlands. Located about 1,600 meters above sea level, the town has very limited access to the outside world.
Wamena is only accessible by airplane. Even then, the flight schedule is intermittent due to the changing weather conditions in this region.
“The airport is often covered in mist, which makes it often impossible for planes to take off or land,” Rocky said.
Caraka operates two Boeing 737-200 airplanes with a total capacity of 12 tons each. These huge cargo planes fly in and out Wamena four to five times daily, weather permitting.
Logistical issues
“Flights to Wamena are always full,” the 37-year-old Rocky said.
These planes carry goods including rice and fresh produce, household goods, and construction material such as cement, iron bars and even cars to Wamena.
But according to Rocky, these airplanes fly out from Wamena completely empty. There are no products from Wamena being sold commercially in bulk quantities to the outside world.
“So, all goods flown to Wamena have to bear double transportation costs,” he said.
These transportation costs certainly add up to the prices of goods sold at Wamena.
Middlemen also take an active role in this part of the world. Due to the difficult access to Wamena, the number of middlemen, as well as their profit margins, multiplies along the distribution line, adding to the already exorbitant prices of the goods sold there.
For example, a cup of instant noodles generally costs around Rp 3,500 (30 cents) in Java. But in Wamena, it costs about Rp 8,000.
A small rice cooker costs around Rp 160,000 in Jakarta. But, in Wamena, the same rice cooker costs around Rp 280,000.
“Wamena is so far away,” Rocky said. “The people over there don’t have many choices.”
There are now about 12,000 people living in Wamena. The town is also surrounded by dozens of traditional villages, whose access to the outside world is solely through Wamena.
The people of Wamena, who are mostly traditional craftsmen, farmers, breeders and low-to-mid-income employees, find it hard to make ends meet because of the exorbitant prices to fulfil their basic needs.
Rocky believes e-commerce could be a solution to this problem. He then invited Ryota Inaba, chief executive and president director of Rakuten Belanja Online to Wamena.
RBO is a subsidiary of Rakuten. The business, headquartered in Tokyo, now has branches in 13 countries across America, Europe, Asia and Oceania.
Their Indonesian branch was opened in March 2011 and it now offers more than 500,000 items on their website. The products vary from gadgets, fashion, cosmetics, food, stationery and plants.
During his visits to Wamena, Inaba was captivated by the beauty of the land, its people and their creativity. He was also touched by the difficult living condition of the people there.
“The people in Jakarta, they can [easily] buy goods,” Inaba said. “But over there, it’s so remote and everything is so difficult.”
RBO and Caraka conducted a market survey, compared the prices between Wamena and Jakarta and calculated the transportation costs.
“We calculated that if we send the products, with the Jakarta prices, plus the transportation costs, it would still be cheaper than the prices in Wamena,” Rocky explained.
Both Rocky and Inaba noticed that Wamena has excellent fresh produce and handicrafts that may interest Indonesian and international buyers.
Among the well-known fresh produce of Wamena is the sweet-smelling coffee and Buah Merah ( Pandanus conoideus ), a type of pandan, which is believed to have curative properties.
Among the famous handicrafts of Wamena is the koteka (penis sheath made of hollowed gourd) and noken (hand-woven bag made of tree’s bark).
Noken has been acknowledged by United Nations Educational, Scientific and Cultural Organization as an intangible cultural heritage of Indonesia since December 2012.
Internet access
Most of these products are produced by local farmers, traditional craftsmen and home industries and sold to visiting tourists. The local people lack the know-how and experience to promote and sell their products to the outside world.
But the Internet throws open doors to the international world for the local people. By simply uploading pictures and specifications of their products on an e-commerce platform, they can sell their products to interested buyers from around the world.
Seeing this opportunity to help, RBO and Caraka started Project Hope for Wamena.
RBO provides their e-commerce platform to promote and sell Wamena products, while Caraka offers lower transportation costs for incoming and outgoing products from and to Wamena for this project.
With products both incoming to and outgoing from Wamena, the transportation costs can be halved. And the people in Wamena can enjoy significantly lower prices for the products that they purchase via RBO.
“The prices would be around 15 to 45 percent lower than they are now in Wamena,” Rocky said. “And it’ll be even cheaper in the future as there will be more products coming out from Wamena.”
Currently, RBO sells 22 original products from Wamena on their website, including the famous coffee, batiks, ethnic jewelry, noken and koteka.
“We’re probably the only internet company selling koteka all over the world,” Inaba said, with a laugh.
On the RBO website, ornate hand-carved koteka is sold at Rp 85,000 per piece. Noken of various sizes and styles are sold at Rp 125,000 to Rp 450,000. A packet of Wamena’s coffee is sold for Rp 55,000.
To invite more craftsmen, farmers and entrepreneurs selling their products online, RBO and Caraka distribute flyers to local churches, traditional markets and residential houses.
Unfortunately, the people of Wamena are not very familiar with the Internet.
While most offices in Wamena have Internet access, very few residential houses are connected to the Internet.
“People in Jakarta, of course, have the luxury of Internet access,” Inaba said. “But over there, it’s so difficult and the connection is usually very slow.”
To assist buyers and sellers with limited or no Internet connection, they set up a booth at a local market in Wamena.
The booth is equipped with two computers and fast Internet connection for local people to come and browse the products being offered at RBO. Sellers may also come to the booth to upload pictures and specifications of their products to the RBO website.
The booth is manned by local staff to help sellers and buyers to understand more about e-commerce transactions.
The booth also becomes a contact point for the sellers and buyers in Wamena.
Sellers can deliver their goods to the booth to be picked up and flown all over the world by Caraka’s team. Buyers from remote villages in Wamena may also come to this booth to pick up their deliveries.
“If they don’t have any credit or debit cards, we also accept cash on delivery,” Rocky said.
Caraka promises a delivery time of two- to three-days between Jakarta and Wamena if the weather is clear.
Despite the large investments that they have made on market research, promotion and preliminary set-up of Project Hope, Caraka and RBO don’t have any targets for returns on investment or profits.
“We don’t have any targets,” Rocky said. “The main purpose of our project is to do something good for the country.”
“The project is not driven by numbers profits,” Inaba said.
“We truly believe that empowering people, not just in Wamena, but all over Indonesia, is critical to our business.”
In the following years, they plan to expand Project Hope to other remote areas in Indonesia.
“We’ll continue exploring those remote areas in Indonesia that have unique products,” Inaba said.
“And Indonesia is full of them. It’s just a matter of finding them, identifying them, put them on the e-commerce platform and off we go and start selling.”
Rocky and Inaba hope Project Hope will inspire other companies in Indonesia to come up with creative solutions to help people living in remote areas.
“It’s a good initiative, the kind of thing that all other companies should do” Inaba said.
More information at rakuten.co.id