Plastic Pollution Challenge
Indonesia is the second-largest ocean plastic polluter. One of the most common items found on beaches are the small single-use/serving plastic packets or sachets. At Mandalika’s beaches, 25% of plastic found is mixed or layered plastic (the same plastic type as these sachets and pouches). Given that plastic sachets and pouches are hard to recycle, we need to reduce plastic waste at the source. This will result in less strain on the waste management system, less plastic being burned, and less plastic polluting the environment as well as entering the oceans.
Furthermore, 70% of Indonesians buy their household goods in single serving ‘sachets’ (i.e. liquid soap, shampoo, detergent and coffee). As 15% of the sachet cost comes from packaging, low-income populations often pay extra for their everyday needs in small portions, a so-called “poverty tax”.
Siklus deliver refills of everyday consumer products to your door – without plastic packaging. Customers can simply order on our mobile app or WhatsApp and schedule a refill. A bike – retrofitted with a refill station – comes to their doorstep where they can use their own containers to refill everyday necessities like soap, shampoo, detergent, cooking oil and more at a lower cost.
We are on average 20% cheaper and our product allows customers to save on everyday necessities while drastically reducing plastic waste, all in a convenient, to-door solution. As such, we create a more efficient and sustainable distribution network for refillable Fast-Moving Consumer Goods (FMCGs) products.
Siklus’ refill solution could become the most effective way to help reduce plastic waste at the source. Delivering in refills also increases the purchasing power of low-income customers as it meets low-income and middle-income household needs who previously had to rely on sachets and other small quantities of product in plastic packaging to save money. We offer a 10%-20% saving to our customers compared to sachets, which is very significant, given that these households on average earn between $70-350 monthly.
Our intended impact is to scale up and be able to reach over a million Indonesian customers by 2023, saving over 62 million sachets from polluting the ocean and saving our customers over USD $1.6 million. The primary outcomes we intend to track are plastic saved from the ocean and savings to our customers from switching to our products. Even if we grow at 20%, which is less than half of our current growth numbers, we would reach around 1.8 million customers by 2025. Our customers, as our direct beneficiaries, would save a combined USD $3 million. According to the same growth rates, we would save 77.5 million plastic sachets by 2025. Hence, the impact of affordable refillable solutions is huge, having the potential to change the game of retail and sustainability globally.
Nevertheless, Siklus also has unintended outcomes that include health benefits since much of Indonesia’s pollution comes from the burning of plastic waste and there are not many feasible options to get rid of plastic pollution. Only 45% of waste in Indonesia gets collected, thus anything to reduce pollution levels will have a significant impact on public health.
Our business model relies on partnering with FMCGs to create a more efficient supply chain with circular bulk packaging. It is composed of three phases: direct sales of products, analytics and advertising as well as white label and merchant model development.
Our core business model is a B2C business model, where our revenue is generated from the sales of products. Our margin is derived from the savings created from cutting packaging costs and we already have very healthy gross margins. We also use a third party logistics provider for warehousing and last mile delivery for more scalability. Secondary revenue streams are data insights and advertising, and later we want to build our own D2C brand.
Siklus is in the scaling stage. As of now, we operate in the Greater Jakarta Area but plan to launch in Bandung and Greater Jakarta by late 2021. In 2022 we want to launch in Bali, Yogyakarta, Surabaya and more cities. Within the next 1-2 years, we want to test various scaling strategies. Additionally, as we are aiming to reach more areas and increase customer density, we will continue to partner with more successful third party logistics to help us improve scalability. Consequently, these expansions will help us achieve $10 million ARR by June 2022.
In the next 2 – 3 years, Siklus also plans on delivering products to rural customers, partnering with family-owned stores for distribution, and building group buying and bulk buying features. Our longer term plan involves expanding to other Southeast Asian countries, partnering with supermarkets, creating Siklus brand products, and adding additional refillable products to our line.
To date, we have raised investment from prominent angel investors such as Gojek’s C-Level executives, Teja Ventures, and partners from renowned VCs such as Jungle Ventures and InvestIdea, as well as grant funding. For current seed investment round, we need the total of:
US$ 2 Million
to improve technology and scale our business
Regarding the upcoming pilot in Mataram, we will allocate:
US$ 2 Million
This amount will be used for the following activities:
- Conduct pilot in Mataram that fits into local conditions – where door to door sales of household products is already commonplace
- Establish educational behavior change activities
- Carry out offline marketing strategies
- Improve hardware system that is suitable for the area
Apart from funding, we are seeking for support to deepen relationships with:
- Local governments
- Local key influencers for local community empowerment
- Local distributors and Ngampas (deliveryman of household products)