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Creative Business Ideas in Indonesia: Beer Delivery Service

Since April 2015 sales of alcoholic beverages in kiosks or minimarkets in Indonesia are forbidden. Previously, light alcoholic beverages, such as beer or breezers, could be bought in these shops that have mushroomed in Indonesian cities. This was bad news for producers of light alcoholic beverages because it was made less easy to buy an alcoholic beverage.

For such a drink you now have to go to the (licensed) supermarkets and hypermarkets or visit a cafe or restaurant. This increases the distance you need to travel for a drink or - when drinking in a cafe or restaurant - it becomes much more expensive.

In an effort to adjust to the new regulatory environment and generate new revenue streams, local alcoholic beverage producers, including Multi Bintang Indonesia, started to offer alcohol-free beers to customers in the minimarkets and kiosks. Others detected another interesting and original opportunity brought about by this new regulation: the beer delivery service. Those consumers who enjoy a beer but are reluctant to travel the distance to the nearest hypermarket can simply use a local delivery service. In Jakarta there are now a couple of these delivery services - 'Bir Delivery', 'Beer on the Way', and 'Your Beer is Here' - and which have gained popularity.

These delivery services do not purchase the product in hypermarkets but make a deal with the local beer distributor and then either bring the products to the consumer using their own means of transportation or - if the service does not have a fleet of motorcycles - it uses the service provided by Go-Jek, a motorcycle taxi ordered through an online application on the smartphone. After Jakarta, these beer delivery services have also spread to Bandung (West Java) and on the island of Bali.

he Your Beer is Here delivery service receives around eight orders per day, on average. Per order a minimum purchase of IDR 200,000 (approx. USD $15) is required. As such, revenue is estimated at around IDR 48 million (approx. USD $3,600) per month; a good figure for a small local entrepreneur (these beer delivery services are set up by small entrepreneurs operating from, for example, a simple boarding house). Net profit is estimated at approximately IDR 5 million per month. The Your Beer is Here delivery service now has 12 employees.

Ban on Sales of Alcoholic Drinks in Minimarkets

Last year, the Indonesian government unveiled Trade Regulation No. 06/M-DAG/PER/1/2015 on the Control and Supervision of Procurement, Distribution, and Sale of Alcoholic Beverages. This regulation prohibits the sale of beverages that have an alcohol content ranging between 1 to 5 percent (so-called "type A alcoholic drinks") in minimarkets and kiosks. Per April 2015 these light alcoholic beverages can only be bought in the (licensed) supermarkets and hypermarkets. However, the new regulation also provides exemptions for the sale of alcoholic beverages for customary uses, tourism, religious rituals, the pharmacy industry, and in places authorized by law.

The government implemented the ban to “protect the morals and culture of Indonesian society” as it had become very easy for schoolchildren or students to buy light-alcoholic beverages (such as beer and breezers) due to the high number of minimarkets and kiosks in Indonesia. Moreover, there exists a negative attitude towards alcohol in Muslim-majority Indonesia as consumption of intoxicants (including alcohol) is generally forbidden (haram). However, as Indonesia contains millions of nominal Muslims (who do not follow Islamic principles strictly), beer consumption had risen in recent years, especially in the urban regions as it had become part of the urban lifestyle.

25 Mar. 2016

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