Aruna optimizes the supply chain for Indonesia’s fisheries
Published on October 6, 2022
Home to over 17,500 islands, with the ocean making up more than 75% of its geography, Indonesia is a hotbed of fisheries. The sector is central to the country’s economy, contributing US$27 billion to GDP, supporting more than 7 million jobs, and supplying more than half of the country’s animal-based protein intake.
However, the fisheries sector in Indonesia is plagued by challenges, one of the major factors being a fragmented supply chain that leads to massive post-harvest losses and millions of fishermen living in perpetual poverty.
Aruna, a local tech company, seeks to address this problem by offering the country’s largest integrated fisheries commerce platform connecting small-scale fishermen to the global market.
On a recent episode of the Indonesia Digital Deconstructed hosted by Michael Soerijadji of AC Ventures, Farid Naufal Aslam, co-founder and CEO of Aruna, shared more about how his company seeks to help make Indonesia a global leader in fisheries.
Integrating supply chains and streamlining the fisheries industry
The transcript below has been condensed and edited for focus and clarity.
Michael: So Farid, what led you to start Aruna? Can you share a bit about your background with us?
Farid: I met both my co-founders in college. We shared a common vision that we wanted to do something to genuinely contribute to society. Both of my co-founders come from coastal families and have a strong understanding of the fisheries industry. We came up with the business idea and won a hackathon after graduating in 2016. This gave us the validation we needed, and eventually, the company was born.
Michael: How is Aruna helping the Indonesian fisheries sector?
Farid: We serve as an end-to-end supply chain aggregator for Indonesia’s fishermen by leveraging technology. We basically provide the fisheries community with a reliable collection system and we are doing so by building a community hub for easy and efficient storage and processing of fish. We also help carry out the fulfillment and distribution from our hub to the customer warehouses. We are currently focused on B2B customers, such as food distribution players and food service companies overseas, but also those inside Indonesia.
Michael: Can you share more about the scope of Indonesia’s fisheries scene?
Farid: One of the main challenges with the fisheries industry in our country is that it is not optimized in terms of capacity. Based on production volume, we are second globally, right behind China, but when it comes to export value, we are not even in the top ten. Also, we are the biggest tuna producer in the world but not the number one exporter – not even in the top five. We have identified the lack of efficiency in the supply chain as one of the main problems. We address this by integrating and streamlining the supply chain and distribution channels.
Michael: What do local fishermen think of Aruna?
Farid: Today, we have 36,000 fishermen across 155 locations, including the islands of Sumatra and Papua, on our platform. Local fishermen are happy with our platform and that reflects in our excellent Net Promoter Score score of over 20.
Michael: In the past three years, Aruna has seen a triple-digit CAGR growth but the scope for growth is still massive. What’s next for you guys?
Farid: Sure, we have a clear roadmap for the next few years. Mainly, we want to penetrate the entire country and build supply hubs for Aruna’s fishermen. We want to focus on exports, but also the domestic market. We already export products to countries like the US, Canada, China, Singapore, Japan, and Korea. Moving forward, we want to strengthen our presence and eventually launch our direct-to-consumer (D2C) brand in these markets. We have actually already launched our D2C brand in North America. This will not only help us improve our margin but will also strengthen the brand’s position across the global market.