The popularity of cheap, single-use sachets has brought with it a tsunami of plastic waste that Indonesia, and indeed the world, is struggling to close the tap on. It is estimated that, for detergent products alone, around 27 million lower-income households in Indonesia purchase at least one sachet per day.
Once used and discarded, these difficult-to-recycle plastic pouches remain in the environment for hundreds of years, adding to the glut of harmful microplastics polluting the ecosystem. But while the environmental threat of these ubiquitous pouches is prolific, convincing consumers to switch to a reusable alternative is no easy feat. As our venture builder Bintang Ekananda explains, “We need to create alternative solutions to sachet formats that are affordable and more convenient for the low-end market with scalable environmental impacts.”
With our reuse venture Koinpack, we offer precisely such an alternative. Koinpack’s solution comes in the form of reusable bottles that can be refilled over and over again with the same home or personal care products typically found in single-use sachets.
Shifting local warungs to reusable alternatives as a distribution model
“The first stop on the road to disrupting the sachet market is offering a distribution model that facilitates fast-moving consumer goods to drastically reduce the usage of difficult-to-recycle single-use plastics from their supply chain,” Bintang explains. He has been in charge of piloting Koinpack for the past months. “The centre for this distribution model is Indonesia’s high-frequency stores, better known locally as warungs.”
The family-owned warung is an essential part of daily life in Indonesia, serving as the convenience shop or grocery store for the local neighbourhood. It is within these community-based warungs that the majority of sachet purchases are made. And, as Bintang explains, the challenge here is facilitating a shift to reusable amongst warung owners. In order to achieve this, Bintang works to build a relationship with the warung owner before offering them to join the Koinpack system. As Bintang explains, “I build trust by talking about how their business goes and what they need to be able to grow amid fierce business competition with the modern retailers.”
By providing warung owners with a slightly higher margin for every Koinpack product sale, Bintang has found that the owners are more willing to join the system. “The current challenge is that they are not yet willing to pay upfront for Koinpack’s products. However, this obstacle will be overcome with the increasing number of Koinpack’s customers in the future.”
Getting consumers on board
The second stop on the road to disrupting the sachet industry is to convince consumers to make the shift to reusables. For the Koinpack customer, we found it is important that they feel they are maximizing the amount of product serving for the product price. For this reason, a flip-top cap and measurement lines were included in the design of the bottle to give customers greater control over the portioning of the product.
To incentivise the return of the bottles once empty, customers are asked to leave a small deposit. It was essential to convince the Koinpack customer on the deposit system and allay their perception that the deposit was better spent elsewhere. To overcome this challenge, the deposit has been incorporated into the sale price. “The cashback provides customers with a rewarding feeling,” Bintang explains.
Digitizing the reuse system
Since the pilot launch in March 2020, Koinpack has grown from two warungs in West Jakarta to a total of five warungs by May 2020. This number is expected to drastically increase with the launch of the Koinpack app, also known as Bintang’s third stop on the road, later this year. “The app will digitize the entire transaction process at the store,” he explains. “All sales data, consumer preferences, customer incentives, and bottle return systems will be integrated into the app, with the aim of making the Koinpack system as convenient and beneficial for all stakeholders involved, including shop owners, customers, and fast-moving consumer goods.”
There is no real handbook to changing a global industry, but with each challenge faced by our own ventures and venture builders, we’re changing mindsets and clearing a path for future entrepreneurs to launch their own reusable alternatives! This is how we can catalyse lasting, systemic change.