Logistics firm JNE Express eyes $427 mn revenue in 2017
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.