Indonesia’s fisheries leapfrog supply chain gaps with Aruna
Published on September 29, 2022
Indonesia has the third-longest coastline on Earth with over 60% of the population living in roughly 12,000 coastal villages.
Naturally, the country has one of the biggest fisheries sectors in the world. However, while the archipelago may be one of the largest seafood producers, the local industry is highly fragmented, with most of the nation’s 12 million fishermen unable to earn a living above the poverty line.
This is why local tech company Aruna offers an integrated fisheries commerce platform that helps to bridge the gaps between local, small-scale fishermen and the global market.
The challenges of Indonesia’s fisheries
Farid highlighted that when it comes to Indonesia’s fisheries, the sector is not optimized in terms of capacity.
“What I mean by that is simple. If you look at our production volume, we are second globally, right behind China, but when it comes to export value, we are not even in the top ten,” he explained. The main reason behind this, Farid believes, is a lack of efficiency across the supply chain.
He said, “Most of our products spoil as raw materials, as there is a significant post-harvest loss because the supply chain is not integrated.”
According to a 2020 report, loss of fresh fish is a particular problem, with an estimated 20% to 29% of fish lost annually in Indonesia’s domestic supply chain.
“This is where we are helping local small-scale fishermen by optimizing the supply chain and connecting them directly to the demand. In this way, we are able to create value for the fishermen and increase profit for the company at the same time,” explained Farid.
He also highlighted that Indonesia is the biggest tuna producer in the world but not the number one exporter (not even in the top five) and this is something that Aruna plans to solve.
An Indonesian fisherman’s journey with Aruna
When asked about a fisherman’s journey before and after joining Aruna, Farid explained that Aruna recently used third-party research conducted by the University of Indonesia to determine the value-add to a fisherman after using the platform.
After polling several fishermen across different locations, the research team found that fishermen on Aruna saw an increase in their income by 200% to 300%.
“If you see the range of income of fishermen with us, it is between US$250 to US$2,000 per month. This is a minimum of three times and up to 12 times of the national average,” he mentioned.
According to Farid, local fishermen are happy enough with the platform that many recommend it to their peers. This leads to organic word-of-mouth marketing that results in Aruna’s impressive Net Promoter Score of over 20.