Lo­gis­tics firm JNE Ex­press eyes $427 mn rev­enue in 2017

Mint Asia ST - - Inside - BAY ASTHA M AHESHWARI

In­done­sia’s ex­press and lo­gis­tics courier com­pany JNE Ex­press is bet­ting big on debt cap­i­tal and self-fi­nanc­ing to fuel its growth plans, tar­get­ing rev­enue to the tune of Rp5.7 tril­lion or $427.5 mil­lion by the end of 2017, its pres­i­dent di­rec­tor M. Fe­ri­adi said in an in­ter­view.

Fe r i a d i said the firm has been ap­proached sev­eral months ago by PE firms but doesn’t plan to have a for­eign in­vestor and had de­cided to seek a bank loan in­stead.

Pro­ceeds will be used for op­er­a­tional costs and work­ing cap­i­tal pur­poses, among oth­ers.

“We want to grow or­gan­i­cally. Our do­mes­tic busi­ness reach, and our grow­ing e-com­merce lo­gis­tics busi­ness, speed of de­liv­ery and al­ready es­tab­lished in­fra­struc­ture are our big growth driv­ers” he said.

JNE Ex­press, whose full name is PT Tiki Jalur Nu­graha Ekakurir, claimed to have grown more than 30-40% in the last two years, and cap­tured al­most 22% mar­ket share in In­done­sia’s courier mar­ket. It counts its large do­mes­tic pres­ence, span­ning is­lands spread far and wide, and deep fo­cus on the lo­cal mar­ket as its big­gest ad­van­tages against many new com­peti­tors such as Go-jek.

The com­pany is the one of the lead­ing e-com­merce lo­gis­tics ser­vice providers with cus­tomers such as Toko­pe­dia, Bukala­pak, and Bli­bli.com. Around 80% of JNE’S to­tal rev­enue comes from retail, of which 50% is from e-com­merce. The firm claimed to have com­pleted 18 mil­lion de­liv­er­ies per month this year, a 12.5% in­crease from last year. Cur­rently, the com­pany has a pres­ence in 16,000 lo­ca­tions and is plan­ning to in­crease the num­ber by al­most 15-20% lo­ca­tions by end of year.

JNE Ex­press started its jour­ney with eight em­ploy­ees, in­clud­ing its four found­ing mem­bers, and around Rp100 mil­lion of cap­i­tal in 1990. It has since trans­formed into one of the coun­try’s big­gest lo­gis­tics com­pa­nies with 16,000 em­ploy­ees and plans to in­vest around Rp500 bil­lion, or $37.5 mil­lion, by end of this year.

JNE plans to in­vest in in­fra­struc­ture, in­for­ma­tion tech­nol­ogy and new busi­ness part­ner­ships.

The lo­gis­tics firm is also plan­ning to en­ter a crowd sourc­ing part­ner­ship with a Sin­ga­pore-based com­pany soon that will be able to de­ploy JNE’S em­ploy­ees. It is also plan­ning to part­ner with banks and fin­tech com­pa­nies as it seeks to di­ver­sify into new ar­eas.

“We are think­ing of pro­vid­ing fin­tech ser­vices as well. We have a few projects in the works to be an­nounced next year,” said Fe­ri­adi.

The pre­dicted en­try of Ama­zon in In­done­sia soon is also seen as a po­ten­tial op­por­tu­nity for JNE Ex­press. Fe­ri­adi said the e-com­merce giant will need lo­cal part­ners with a strong reach in the ar­chi­pel­ago.

Set­ting goals: JNE Ex­press pres­i­dent di­rec­tor M. Fe­ri­adi said the firm is bet­ting big on debt cap­i­tal and self-fi­nanc­ing to fuel its growth plans but doesn’t plan to have a for­eign in­vestor.

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