George and Gaery of Tiket.com

Hans Tung:
Hi, today on the show, we have George Hendrata and Gaery Undarsa from Tiket.com. Tiket.com is the fastest-growing online travel agency platform in Indonesia. The site offers travel, entertainment related products, including fight tickets, hotel booking, train tickets, car renting, and even services. Since August 2011, Tiket.com has become the top agent for Indonesian airlines and an online partner of Indonesian railways company. In 2017, Tiket.com was acquired by Blibli, an eCommerce site backed by Indonesia’s conglomerate Djarum.

Dimitra Taslim:
George Hendrata is the CEO of Tiket.com. Prior to joining Tiket.com, he was a business development director and Djarum and chairman of BMJ, one of the world’s largest specialty paper companies. George has a bachelor degree from Columbia University and an MBA from Harvard Business School. Gaery Undarsa is a co-founder of Tiket.com. He is currently operating as a chief marketing officer. He worked at IBM Canada and as an IT analyst and developer for four years. He graduated from Simon Fraser University in Vancouver with a dual degree in computing science and business.

Hans Tung:
Welcome to the show! How’s Tiket.com doing in Southeast Asia’s highly competitive OTA market, especially Indonesia with a strong local number one player already?

George Hendrata:
Thank you Hans and Dimi for having me today. And we are super excited to be here today. The Indonesian travel market is booming like crazy. It’s growing about 40% per year, total size is about 16 billion, and still only about 30% is online travel. So when we see the market back in July 2017, we see that one very dominant player, it’s probably about 10 times the size of us and we see that the market needs an option. We have very good relationship with their airlines, they don’t want to get stuck with one competitor, as well as the hotels. So we came in, we did what we can, we fix the apps, we fixed the awareness. At that point of time, it was about 40%. So now it grew to around 90%. And at that time, we grew very rapidly. So now we are super close to the number one.

Hans Tung:
Given our experience in US and China and other markets, there’s room for more than one OTA where the key is to have some kind of differentiation. So how are you different and make Tiket.com special?

George Hendrata:
So our vision is to become the most customer centric travel app in Indonesia. And how do you do it? Basically, by making it super simple to search, to book and to pay, and giving people a lot of options. We can go deep in all the things that the travelers care about, in flights, in hotels, in railway, in entertainment, whereas when you are a super app, like our competition, you have to focus on so many different areas.

Hans Tung:
What do you mean by that?

George Hendrata:
What do I mean by that is that when you go to a supermarket, it’s different that when you go into specialty store. And travel is a place where you have a lot of engagement to check out. Leisure traveler, they want to find out more about the place before they go. Business travelers, they have some habits that they have. And so we can customize the app much better if we just focus on travel app.

Dimitra Taslim:
We’re all looking around a table now wondering who the biggest competitor is. Okay, my next question is that tell us about a partnership that you have with Gojek. Why is OTA so important to the super app race between Grab and Gojek? And how do you feel about going deep and being out of this race?

George Hendrata:
First of all, I want to say something about the number one. So, in the past few years, we’ve been throwing at about four or five competitions. So clearly even in the very hyper competitive environment, there is a place for a strong and relevant number two to grow.

Hans Tung:
Well, people can say you come from a smaller base, of course we’ll be growing faster. And how you really different and what are you providing experience that the other competitors cannot provide?

George Hendrata:
So, the way we do it is that we look at all the key performance criteria of why people buy OTA, one is trust. So when they buy and send the money, they want to make sure they get the ticket. Second is that the whole UI UX experience, onboarding, one button, clicking quickly, just basically get the thing done. And then you have a lot of features that in the past, you have to go through customer service. But currently, you can do it much more quickly, for example, like refund and reschedule. And then there are a lot of other things like that, and we go one by one, and we make sure and in each of those criteria, we’re doing better than competition. And that’s how you win basically.

Hans Tung:
In travel, which is such a low frequency category, how do you make the experience richer? And how do you over time become higher frequency destination?

George Hendrata:
So, in travel, people do a lot of things. So they fly, they stay in the hotel. Many times they they go for business, they stay in convention center for conferences. They might go to see a concert, they might want to buy some food. There are a lot of things, which is categorized as things to do. So we’re growing big in that category. We’re adding a lot of stuff in there so that the frequency of use will increase.

Hans Tung:
Sounds like Airbnb’s Experiences. So how would this make it a higher frequency app?

George Hendrata:
It is going to be much higher frequency app because the use case is more. I mean people are eating three times a day versus when they travel, initially our frequency was only less than two, and then it becomes two times after the relaunch, now it’s close to four. And then with food, with going to shows, going to other entertainment places, this can easily become a seven to ten times use cases per month for example.

Hans Tung:
Based on our experience, we’ve seen that travel is usually go somewhere else to enjoy better experiences. The hard part is always to make travel a little more local. Are you seeing in local traffic or local usage cases happening on your app as a result of having more events and concerts and other things?

George Hendrata:
I mean the local case is amazing. If you look at the travel space, the domestic travel is actually 110 million trips, whereas the inbound and outbound each is around 16 million. So then, we are really blessed to have a country with so many place to go, 17,000 Islands, and the government is very supportive of opening up and expanding airports, they’re doing that at a rate of maybe around 20 years. So I’m saying that even though the travel is still about 80% originating from Java, but we are starting to see people going to other places. You all have to go if you haven’t seen because when you go and scuba dive down there, it looks like you’re in an aquarium so I will show you a video after that. And then, obviously, when people go again, they take ride share, they want to see what’s out there culturally, they want to take a quick one-day tour or maybe a three-day tour in some cultural places that they haven’t seen, and they want to try the local dishes. So there are a lot of things that you can add to travel. And when they go to a travel app, they have that in mind more than just basically quickly getting in doing the things and then getting out of the apps.

Dimitra Taslim:
That sounds amazing. And I’m a big fan of scuba diving and I haven’t been so, so I hope to make it there one day. In travel, the target audience is so important. So I want to direct the next question to Gaery. If you could paint a picture for us, what kind of people in Indonesia buy travel online digitally? And how do you target and acquire these customers on a platform?

Gaery Undarsa:
I mean like in terms of gender, it’s actually very similar, like 51% to 49%, the majority is actually female. So I would say that male and female is pretty much the same. The interesting part is actually the age gap. Indonesia is actually a very young country in terms of age, mostly active. So the majority of our customers, they’re actually between 25 to 35, which is actually great. Because at the end of the day, they’re actually the ones that can afford the traveling. They’re actually the one that are actually the most active. So we actually catering to that audience.

How do we do that? Most of them are millennials. So if you notice most of our marketing campaigns, and also our rebranding campaigns, they’re directed towards millennials. How that differs from the competitions? Our advertising, our marketing, our brand message, everything is actually consisted with three values. One is fast. Everything has to be fast for millennials. They just want everything to be instant, including brands, including our marketing, like everything is just fast, fast, fast and fast. The message just fast.

Second is actually flexible. Our marketing has to be flexible enough. And also like very diverse. It has to really get to the point, we really have to know what’s the trend coming in. So we actually do a lot of viral marketing in the social as well. The last one, which is very Indonesian, I will say because we’re an Indonesian company, it’s actually friendly. Indonesians are being famous of being very friendly, sometimes too friendly. And I think we’re gonna take the positives out of it, which is that our marketing message, our color, the way we do things, our TV commercials, our campaign, our viral campaigns, everything has to be friendly. And not just that, but also has to be reflected on our products as well.

So actually, if you go to the apps, the main thing that we’re going to do and the main thing that we can improve is actually the customer centric. It has to be very customer friendly. So I think the way we cater to them is for example, how do you get to the younger audience? You mentioned about events before. Actually, one of the strong parts of Tiket.com is because we not only sell flight tickets or hotels, but we also have events. And we’re practically the pioneer on the online event ticketing industry in Indonesia. So we’re practically right now the biggest as well. So many events coming in in Indonesia, because it’s a growing economy as well. People go like twice a month, for example, for events, even like last weekend, we actually cater five concerts within the same weekend. So, definitely the frequency is there. And not just that in Indonesia, or at least in Jakarta, staycation is very popular. For example, here in Indonesia, especially in big city like Jakarta, it is very different. In the western countries where you can get the good air, you can get like good views, you can do sports outdoor and all other things. It’s just impossible here. So what you do is just go to the malls. But then it gets boring. So what happens actually, the funny thing through the weekend, they just booked a hotel. They just booked a nice hotel just for the weekend. So, they don’t have to travel, but they actually stay at hotels and also enjoy activities and all those things. So our app is not just being used whenever you want to travel far, but definitely local, more frequency, especially events and also staycations.

Hans Tung:
Sounds like your competitor is supposed to become a super app and do many things, ride sharing and food delivery stuff, where you guys are very focused on travel in both local and within Indonesia and beyond Indonesia, to offer richer experiences.

Gaery Undarsa:
So we call it travel marketplace.

Dimitra Taslim:
On the point of ride-hailing that Hans raised, I want to direct this question back to George again, tell us about the partnership that you have with Gojek. And why is the OTA so important to the super app race between Grab and Gojek?

George Hendrata:
So the relationship with Gojek has been amazing. They’re the big super app here. A lot of use cases. They’re big in the two wheelers, the four wheelers and now in food, they’re number one. And the relationship is twofold. One is that people who go to Gojek app, they might actually download a lot of other application along with it. One of them is basically for example, delivery of medicine. And then you might want to order a massage with nowadays they put all of those things on the GoLife. So maybe people will also want to basically book hotel and flight. And that’s where the partnership starts. So you can click a tile and you can download the tiket app. That’s one way. The second way is that in the future, you have a place where you can go travel and then when you click on it, basically we provide all we can in terms of hotels and flights, and they have much more MAU than us about four to five times because of their many more use cases. Some of it may be relevant to travel, some of it not. But then since the path is going to be super app, and we provide them with all the options that they can.

Hans Tung:
As you know, we’re investor in Grab and we love Anthony’s team. Why didn’t you work with Grab?

George Hendrata:
Well, I love Anthony and his team. So I’m a good friend of Anthony and a good friend of Nadiem, we all came from the same school. And one day we all talk about, can they even be friends again? And can they actually merge? I mean, that’s one of the question that we always raise rather than each one of them trying to basically have 80% market share right.

Dimitra Taslim:
Back to your competitor, George, Tiket.com was founded one year before your biggest competitor. And looking back, what are some of the key decisions that you have had to make facing this giant competition, especially if you’re in the race of a big round from some of the world market investors? What challenges have you facing up to the competition?

George Hendrata:
This one I think will be best for Gaery to answer. He can tell the pre-2017 and after.

Gaery Undarsa:
So yeah, you’re correct. We actually started first. It was 2011, practically there was no online travel anything in Indonesia, not even apps. iPhone and Android weren’t even popular back then. So, it was a challenge, but actually the thing is that we see there is a huge opportunity for travel here. As simple as looking at China and India, definitely at that time, there was already big players in China and India, Ctrip and MakeMyTrip. We just wondering, the third largest in Asia is Indonesia. It just makes sense for us to have a really good online travel apps in this case, Especially Indonesia is kind of special, because if you notice, there are like thousands of islands here. It’s more of an island country instead of a big mass. So what it means is that people actually will need to fly. There is no way that they can go by car to go to another island. So we see a huge opportunity here. And then we push that hard. We’re actually the pioneer for every single product. For example, we are the pioneer at online flight ticketing, and we also the pioneer on online train ticketing, we’re actually the one who actually convinced the director back then, because there is only one train company and it’s actually owned by government. So it’s kind of tricky. But then, we managed to convince them just by showing the numbers from Indian Railways back then. Also event ticketing and all those things. We did that. One of the things that we didn’t do quite well was actually fundraising.

One part is because our previous shareholders or investors are a bit family conventional and all those things, so we didn’t really see the needs of fundraising back then. But then 2017 came, and then we realized one thing, at the end of the day, it is either go big or go home. So we approach the Djarum group, and thankfully we met George at that time, he is actually the one who actually led the due diligence, we love him. And somehow we got a match. So within three months in 2017, everything’s done. We got a good push from the group as well. So we just told the group as simple as this, you know what, if you trust us enough, as founders, we’re going to be here. We promise that we’re going to push the business to definitely a different level.

And especially in this case, we still have that goal, whereas, Tiket.com, if you notice our name ‘Tiket’, it actually doesn’t have ‘C’ in it, because it’s actually an Indonesian spelling for ticket. So Tiket.com is just a straightforward name to be the number one travel apps in Indonesia. So we just want to conquer and we just want to have that dream in place. And two years later, right now, it’s pretty much getting there. Almost there. So we’re actually very excited with this. And I think this is just the beginning. We still have a lot of things going on, 30% penetration rate for online, we didn’t even mention about market beyond Indonesia. And in fact, we actually already have some people on the ground in some of those countries as well preparing for that. So, it’s exciting times.

Hans Tung:
How big was your co-founding team? And what are their roles today in the company?

Gaery Undarsa:
Well, we started with seven. It was too big, right? Right now there are only three, and I think it’s pretty solid in that way.

Hans Tung:
What are the roles for these three?

Gaery Undarsa:
I’m the CMO. Just because I’m the only one that has Instagram account, apparently. Just kidding. I love marketing and branding, for sure. My partner is Dimas, he’s actually our Chief Commercial Officer. He’s great at negotiations and striking deals with partners. He’s very close with all our partners.

And the last one is actually Wenas, he doesn’t have any like official roles, because he’s everywhere. He’s actually the one who came up with Tiket.com. He is also the one who bought Tiket.com domain at that time with loan, because we didn’t have any money. He’s like the chief entrepreneur officer. He’s just an entrepreneur. He’s an entrepreneur up to the roof. In terms of tech, he’s also out there. He used to had some of biggest satellites here. Couldn’t mention that, you know, no details, but I’m just saying that. So I mean, he’s there. Right now he’s in Canada and mostly Jakarta back and forth. We also have an R&D center head there in Vancouver, Canada. Because he’s there. So, there are three of us. And it’s kind of like complementing each other for sure.

Hans Tung:
So George, what attract you to this group?

George Hendrata:
Look at this, they all have their own roles to play. And in marketing, as you know, it’s about reach impact and frequency. And facing a competition, which is as large as that back in 2017, people think that we are crazy. But then we realized, as we talk with the airline partners with the hotel partners that the relationships that has been struck has been really good. And they really want to have someone who can grow with them. So it’s relatively easy to get good deals, relatively easy to get good inventory at a good price. We pass this to the consumer. In the due diligence, I noticed that there are a lot of things that needs to be improved in the company, the apps, the tech team, there are some co-founders that Gaery didn’t mentioned that had to go basically at that time, but not immediately. We did a lot of homework. The message that I gave is that if you want to win, you have to be bold, because you’re so far out there that you have to be bold meaning that you have to take risks, calculated risks. And if you make a mistake, you won’t be punished because that’s the only way to do it.

Hans Tung:
But even before you talk to them, what was happening in the market that gave you the confidence that this is a worthwhile pursuit?

George Hendrata:
Number one is that the market is huge. In 10 years, we will be the fourth largest travel market in the world after China, US, India and US. Second is that if you look at the Djarum portfolio of business, we love business that we run well. And we love business that very sustainable, and you look at all the players out there, online travel agent, the Booking, the Expedia, the Ctrip, they all make good margins, and they all make good money. And my thinking was that if Booking is 180-190 billion market cap, Indonesia will be at least 110 in due time, because our GDP per capita is like $4,000 now, US are much higher. China’s two and a half times larger. So from the macro perspective, all makes sense.

Travel still growing around 15%, but OTA was only growing 14%, and then you have all the support from the government opening up airports and all that. We did a quick survey, we saw that the brand image was good. Some things still need to be fixed, including even the logo. And if I tell you the story about the logo, it was me and Gaery, you will be surprised because the guy left who do our commercial. And he came to the office saying that can we do the new logo for you guys? Because the old logo has an old door and ticket, which is a bit old fashioned, but he came to the office and he just gave us one logo, only one option, there is no two or three, and we saw the yellow sign signifies fun of travel, because yellow is like the sun, so we’ve immediately fell in love with it. All lowercase. We sit alongside the customer, we want to serve them very well. And that’s actually the value proposition that we gave to our partner.

If you notice, in hotel, it is very fragmented. Like what I mentioned to you, the non-star hotel is around 80,000, The star is only 15,000. When you go and try to get as much as possible, some of the hotels might not want to work with you just because they don’t want to work with you. And to be able to go deeper in the relationship, you can get a lot of hard-to-get hotels out there, you can get a lot more good deals and availability, and this is the key strength of the company.

Another thing is that if you notice the mix of the team, it is really diverse. You have someone like Gaery who can make something go viral like crazy. You have someone like the Dimas who can basically deal, and currently we have the largest K-pop ticket provider in Indonesia. We sold Blackpink tickets, and then a whole lot of stuff that we do. And then you have Wenas who is thinking out of the box. I am someone who loves to win and I ‘de-bottleneck’ things. So when I see places where we can de-bottleneck and make things quickly improve, I can see that. We can track a lot of talents, initially it was super difficult, because facing a big competition, people are not sure whether a ticket is going to be a different ticket. But then the founding team has been there since the beginning, and a lot of the talents left to go to bigger startups and many more unicorns, when they see the change of Tiket.com, they come back. And so we used to joke in the company that it’s like salmon fish, you breathe in the river, you go to the ocean, and then you come back.

That’s the story with Tiket.com. And we just love what we’re doing. And we put in much more people who are investment savvy, our CFO is ex Hillhouse, and he used to be the one leading the team to invest in the competition, that’s another funny story. So maybe I’ll get more money from you, Hans.

Dimitra Taslim:
Another question for you guys is I see what’s happening in eCommerce as same as what’s happening in travel. In eCommerce, you have a company in Shopee, in a way it’s being funded by cash and profits from the gaming side of the company. And then you have Tokopedia that’s being funded by VCs. Same with travel, you have your biggest competitor that’s being funded by VC and strategics. And you have Tiket.com that’s being funded by profits from a very profitable Djarum business, the banking business and the tobacco business. So how do you see this playing out because now you have the cash from tobacco and from banking, and your competitor has cash from some of the biggest VCs in China and in the world, how do you see this playing out? Is this a game of patience and which capital is more patient?

George Hendrata:
So for us, we have Djarum holding many pillars. But one of the big pillar is basically consumer. So a lot of the stuff in the tobacco space and the stuff that we’re doing in that category, similar mimicking what RJR Nabisco has done in the US, so you go and utilize the brand management capability and distribution capability to build other FMCG business. And everyone who is ready to drink tea and a lot other business. And we have another one which is the financial sector, which is BCA, the largest consumer private bank. And then in there, our investment in Gojek is also thinking along that route, because Gojek has Gopay, there is a lot of digital payment and then there are a lot of other stuff. We invest there, including the switching network and some financial marketplace. And then you have natural resource including the palm oil sector, that we grow organically and through acquisition as well, and then the last pieces of tech. But what is common among all those businesses is that we run business sustainably. So we see the potential of the market, we want to be close to the consumer. And the way we see that is that in the companies and portfolios, they’re in different life stages in the group, some of it may be needing cash now, some of it may be basically it’s cash cow and we can use some of those cash to be reinvested in the business. So the case with Tiket is like that, we see that this is a brand building exercise. We see that the travel is going to be big in Indonesia, it’s now already big. It is very sustainable as we see all the other proxies. And so it is okay to fund the business initially, because who will want to come with us right back in July 2017 facing someone like that. But today when people see good traction, we of course want to bring in outside capital to be coming in. Because again, 40% of travel comes from Southeast Asia, and Indonesia, as the population is 50% of the whole Southeast Asia, so then expanding beyond Indonesia will be in the route, needing different capitals, different strategic partner and financial partner, and this is where we are heading.

Hans Tung:
16 of the world’s top 20 most travelled cities are in Asia, in general, any idea or any ambition to go beyond Southeast Asia at some point in the future?

Gaery Undarsa:
Currently, we are focusing on solidifying the basis in Indonesia. But next will be Southeast Asia countries that are well traveled, Vietnam, Singapore, Thailand. We have some teams there, and they’re doing hotel acquisitions, we get some of the best talents from the big OTAs who joined us that we can scale and wrap doing very rapid hotel and entertainment acquisitions. And then beyond that, we noticed that a lot of Indonesians also like to travel to Japan, Korea, and Australia. So we are not as big as a hub or as more frequented as hub like Singapore, but quite close. And that’s the journey that we are planning to have.

Hans Tung:
The China outbound market obviously is amongst the biggest market in the world. You see a lot of Chinese tourists coming to Southeast Asia. What’s your strategy to tap into that growth?

George Hendrata:
Some of it I can mention publicly, but some of it cannot. One is basically without too much marketing, you already have many direct flights from China straight to Bali. And we’re working with the Minister of Tourism, to basically open up between 10 to 15 more place like Bali. And I will show you the video after this. Some of those areas are so pristine, it’s just amazing. Some of it is very pretty underneath the water, some of its very pretty above the water. All it needs is some accommodation, some places where you can go and eat good food. And the culture is already there. It’s very friendly. In fact, even though you see that GDP per capita is not that high. And I’m sure you have experience with traffic here, a lot of complaints, but in the happiness index, Indonesia is quite high up there. And when people are happy, they can serve people happily, and people can enjoy those places. And so just by doing that, making sure that there are places that people can visit, working with the low star hotel to make things more available there, that first part is already big enough. And then we can do other things other than that.

Dimitra Taslim:
Gaery, I would love to know as well. You’re one of the pioneers in the startup ecosystem in Indonesia having fun at the company one year before the biggest competitor, and what what are some of the challenges that you have faced as an entrepreneur in the travel industry? And what are some of the surprises that you have faced?

Gaery Undarsa:
I would say 2011 that was practically a different world compared to now, back then if you imagine, because we’re the pioneer in online travel in Indonesia, actually, not just online travel, practically anything online, we’re like one of the pioneers along with Tokopedia and also some other some other big names today. The biggest problem back then was payment for sure. Because credit card was practically only 10 million credit cards available, which is comparing to 275 million population. So payment is a big problem. But then slowly but surely, it’s being solved, especially nowadays, it’s practically a different world. Payment is not an issue anymore. How to solve that, as simple as just provides all payments that they want. So at one time, we actually have 15 different ways to pay.

The second is actually infrastructure. Back then there were not enough airports being built. There was not enough focus on tourism in Indonesia, even though we know that some of these places are very beautiful. So what we did, actually, we just send teams to some of these places, which are very beautiful. We make a good documentary, we make a good very millennial-focus videos on these places. What happened is that we met with the tourism minister and talk about it, we asked for more focus to these areas. And then if you notice, right now, tourism is actually one of Indonesia’s major focus, even from the President himself, he mentioned that tourism should be our focus, because at the end of the day, tourism is actually the only sector that we can be the best, because Indonesia is just there. Obviously, other than tourism, it will be hard, because we have big competitors out there. And those are the countries. So I mean, that’s also an issue.

But I think the last part is actually talents. People always say is that at the end of the day, if you want to build something, if you want to conquer your dream, you need people out of it. And that’s why at Tiket.com, people is number one, we see people as our main resource and main asset as well. We take care of them and all those things. Back in 2011, even until 2015, it was hard, because there was just not enough high capability on the tech sector for talents. But then what we did is actually as simple as, we just did what we can, because my partners are very involved in some of tech communities here. Well, obviously hacker communities, even people that actually doesn’t have a bachelor’s degree yet, but they have very advanced capability on tech. We hire them, we kind of nurture them, telling that this is our dreams and all those things. I mean, right now, tech is already the main focus. And again, for resource, obviously, there’re still issues there, hiring good talents, but it wasn’t as big as the issue back in 2012 or 2013 anymore. So I think those three are the major challenges we had. But I think right now, it’s just a matter of growth, a matter of market acquisition, delivering the right message to our customers. And I think our main focus right now is actually product, delivering the best product experience to our customers.

Dimitra Taslim:
And George, any surprises along the way, having been a CEO for the last couple of years?

George Hendrata:
Many, many, many surprises. But one of the surprises that I have is that I thought the journey is gonna be longer actually. And then I’m quite surprised by, when you focus on the basic things, good things happen. That’s one, The second is also that I always feel that it’s much better to be blessed than to be smart because there are a lot of things that we do with Gaery. How can we predict impact when we only do the things, we try to get the frequency up there, but impact is something beyond us. It’s what the customer does with our product. And then what they tell us what they love about it, what they not love about it, we keep on thinking of the stuff that they don’t love. We accentuate what they love. And what is surprising for me is how quickly things change in terms of hiring, like what Gary mentioned, in the past, it’s been quite difficult to get people to go on the journey. And we want to make sure that we get people with the right mindset. So not only that we know what they’re capable of, but we also ask the question, do you believe that you can be the number one out there? And if they don’t believe that, it’s not going to be in the team, because initially the pushing was so difficult. But once you get it going, you get some snowballing effect going and like you said Hans, good things happen. I’m sure you have seen it with many companies and even many markets out there.

Hans Tung:
Gaery, how about you? Any interesting surprises?

Gaery Undarsa:
For sure. One, our biggest surprise actually George wants to be our CEO. Seriously, I mean we were kind of concerned because the previous CEO, obviously, he left. And then, we were wondering who’s gonna lead a company and all those things, we need someone who has a really great capabilities. And thankfully, we have George. And we get a good chemistry going on.

The second surprises is that lot of our past employees. good ones, they actually wanted to come back, like literally they contacted us and just asking, Hey, you know what, let’s do this together. So that’s amazing. Another one that is actually very close to me, obviously, so this is on the marketing sector. We started with very low awareness, we’re talking around 30%-40% awareness, compared to a competitor which has 98%. It’s hard, because it’s Indonesia. It’s a big country, and all those things, but then right now within just one and a half years or even less, our awareness level is already at 95%. So it’s very hard to build awareness, especially on the top of mind. But then I think George always mentioned to me, in marketing, there are three things and you have to choose one. One is do frequency, second is actually do the breath, the last one is actually impact. And we chose impact, because obviously, we didn’t want to spend like too much money on marketing, but we want it to be impactful enough that we can see the results. And for almost on every single campaign that we did, for example, we did online ticket week, already twice, and it’s always viral. Always viral, I mean, those things you just cannot buy. And from those things people have started to, to gain trust, to use our apps and right now there is always very, very minimal barrier to actually switch to Tiket.com, coming from our competitors, for example.

Dimitra Taslim:
Guys, we’re gonna have a round of quickfire questions and this. So first one is for George, if you could spend a day in someone else’s shoes, who would they be? And why?

George Hendrata:
Hans, because I think he’s amazing.

Dimitra Taslim:
Next question, Gaery, who or what are your biggest teacher?

Gaery Undarsa:
Oh, that’s hard, I’ll say it’s actually George. I actually actually learned a lot from him in the past few years. Not just doing business, but I think it’s more on the personal level as well.

Hans Tung:
In what way?

Gaery Undarsa:
Well, a lot of things. For example, the way he made decisions, and also the way he leads the team, so he’s not just a CEO actually. Sometimes he’s becoming a VP. Some of the days he’s becoming a manager. Sometimes he’s becoming even a staff. He practically tries to solve problems to that level. I mean not just directing things, but also being an example. And I think that kind of culture is exactly what we need, especially since because we were young. And this company has a lot of people right now. So that kind of culture, it has to be there, the can-do attitude, and want-do attitude as well.

Dimitra Taslim:
George, you work in travel. So what is your dream day look like?

George Hendrata:
Oh, my goodness, this is like amazing. So I’m actually going to realize my dream day in December. So I’m going to San Sebastian, which is has the second number of Michelin star per capita in the world, while the restaurants already brought the whole family so I’m going to do that trip.

Dimitra Taslim:
Great. And the last one, Gaery, what’s your guilty pleasure?

Gaery Undarsa:
Oh, obviously spending money on cars. So obvious. I have 11 cars and all of them are rare and classics as well. So obviously it costs tons of money. But there is a big reason why my wife has only very little issue about that because I always profit whenever I sell my cars. So it’s this guilty pleasures, but it’s gonna be profitable in the long run.

Hans Tung:
All right, sounds like you guys are probably fit for what you guys do. Thank you.

COVID UPDATE

Rita Yang:
Hello, everyone. Hi, Gaery. Hi, George. I haven’t seen you guys for long time.
So how have you guys been doing? How are you holding up over there?

George Hendrata:
Very good given the circumstances. I don’t think any of us has experienced things like this before. So a lot of unexpected things. We have to learn a lot of new things to respond to the situation but I think given the situation, we are doing the best we can.

Rita Yang:
And is your entire team working from home?

George Hendrata:
Yeah, we’ve been working from home since March 15th. It’s the third month now. And then part of it is easy, because we just have to bring our laptop home, but some require more logistic like the customer service things we have to buy them a bunch of modems, making sure they have good connections. And then, eventually everybody is working remote.

Gaery Undarsa:
So I think the interesting thing is the customer care part. because now it was quite a challenge in the beginning, so it was a bit delayed for two weeks. And we didn’t think that we can do 100% customer care working from home but apparently it’s possible. If you know Indonesia in terms of the internet, I mean not everyone actually has it. Most people only access from their smartphones. That’s one of the biggest problems.

Dimitra Taslim:
Rita, I don’t know if you remember one of our conversations with Savio Kwan, who was the CEO of Alibaba, it sounds like the story when SARS hit China, and Alibaba’s employees packed up and got their modems and those old big computers back home and all this was actually set up back at home. and then they said the next day when the SME customers called the Alibaba line. It was like usual, nothing happened.

Gaery Undarsa:
Actually, we personally experienced it firsthand, it was quite surprised with the result. It was actually quite smooth. Almost like 500 customer care representatives who are working from home. It’s quite a challenge, because definitely, most of them they don’t have any internet connections at all. So we need to provide them with the mobile internet.

Rita Yang:
So basically everyone gets a phone who is working from home. Is that the case?

Gaery Undarsa:
Practically they get a laptop, and we need to run a laptop and also the mobile WiFi.

Rita Yang:
Interesting. Travel is definitely one of the worst hit industry because of COVID, and you guys are one of the largest booking agents in Southeast Asia, maybe you can tell us how do you feel the impact firsthand? And how have you been coping with the fact that no one is traveling anymore, and not to mention that there’s a lot of return and a lot of refunds that has to be done in a very short amount of time?

George Hendrata:
So, in terms of travel restriction, we haven’t seen anything like this before, we have seen 210 countries in a world with travel restriction. So the impact is huge. And then one is, for sure customer is a bit confused because they want to do a refund or they want to cancel and if they want to do a rescheduling, they don’t know when they can reschedule to. Obviously, we get a lot of customer service calls to the order or even more. And then secondly, the airlines are under a lot of pressure, they keep on changing the travel, refund and rescheduling policy. And so we have to keep customers updated on our platform from desktop, mobile and apps. And back to basics, focus on the customer, make sure that they’re not confused, make sure that they know where to get info, make sure they have access to the latest info, and most importantly is that when they want to do any kind of changes to their travel, we make it as simple as possible through all the platform as well as through customer service.

Second is that we also notice that with this update, obviously, no customer service force in the world will be adequately prepared for this, and we are very glad to see that the science is kind of broken down when you have a challenge basically the company facing a common issue. So we briefly opened up a volunteer channel, whoever wants to become customer service. And we asked for additional 50, we get about 100 people within the company who wants to be trained within a week so that they can absorb all the deltas, all the rapid increase in all these issues. So it’s been very encouraging and we are really proud of the fact that we were able to respond in such a short amount of time.

Dimitra Taslim:
George, I wanted to follow up on the first part of what you just said. I personally am one of the customers who are affected by this COVID-19, because I had a flight to Italy which was cancelled later this year. And getting the refund was a pain because I bought it on an agent like Tiket.com, and when you go to the airline, they told me to ask agent, when I go to the agent, they asked me to talk to the airline. So how do you guys handle this dynamic?

George Hendrata:
Basically, if you look at the backups , there are airlines who are strong, and they’re ready for this particular they will still refund in cash. And then you have other airlines who are a bit more under pressure financially and then they report to what is called EMD, electronic miscellaneous document, basically it is the electronic voucher that has an amount on it, nominal money amount on it, and you can use it for your next travel. The issue is that the policies may change from time to time. So initially, some airlines may do cash and then in the end, they go to EMD, or maybe they’re also some airlines who are on EMD initially, and now they’re in a better position, they do cash.

So whatever the circumstances is, our objective has always been in communicating to the customers as clear as possible, and holding them through all the various platforms. So they know where they are. If it’s EMD from the airline, we tell them you know, we have already processed it. And we tell them whether we have received the EMD, when they expect to see the EMD. If not, we also give them estimates. So that’s one. Second is that we are trying to bend our backs in terms of providing customers refund, in some cases quicker than the airlines, especially if it’s cash, because when you receive the cash and increase on top of deposit to airline, it is easy to monitor the balance and we can make it much faster in terms of when the customer receives this. So we try to do that.

Rita Yang:
In terms of the revenue stream, are you guys doing any kind of pivot to help the business to at least get the cash flow reserved for a very uncertain future?

George Hendrata:
When we look at the 1998 crisis in Indonesia, some banks who give loans to companies, they are worried about the risk exposure and they try to take the money back and in turn a lot of the businesses collapse. And not only that, but also ruin the relationship between the banks and some of the companies. In this case, we also have similar cases where we have deposits in hotels and all that and we know that the hotel rooms are not selling so we will have some deposits back in many of the hotels, but we look at the hotel one by one, we assess the risk, and we expand the deposit terms, we make it easy, easier for them to basically go through the crisis. We see them as partners to go through this together rather than quickly falling back to the deposits and create unnecessary crisis. And that is one way that we’re trying to do it.

Second also is that M&M, Gaery will come help us elaborate later on is that we work closely with the Ministry of Tourism, because in many cases, a lot of the players in this industry, small medium enterprise, small operators, smaller hotels which are really hugely impacted by lack of tourism, inbound as well as domestically. And with this case, we try to identify small car rental operators and all that, and we try to work with government bodies that has CSR in this industry so that they can continue to try. And the scenario and we are hoping similar like SARS, where you have a seven month rebound period, we’re hoping that we can have similar kind of rebound period. And so we are ready to have travel, go back up again soon, and these players can continue to, again earn their living in the sector. So maybe Gaery, you can add a little bit more on the Ministry of Tourism site.

Gaery Undarsa:
Yeah. So historically we’ve been very closely working with Ministry of Tourism, especially, we always report almost all of their programs, even starting from a couple years back. We actually very close with the previous minister as well. And actually during this COVID-19 period, it’s kind of interesting to see, we do a couple things together with them. One is actually exactly like what Georgia already mentioned, we try to help them by identifying travel related small medium businesses, probably not just businesses or like actually, all travel related sectors, and also individuals that’s actually affected mostly by this COVID-19.

So what we did is actually we do a bit of CSR by actually doing donations from our customers and also from our marketing budget as well. We go directly to these places. Of course working with the tourism division of the local government, we kind of distribute all this help, mostly it can consist of help in terms of some basic needs for food and all those things. But also on top of that, I think there are some programs that are also in place to help the small medium business site. Probably in this case, there are like some kind of soft loans going on, to help them to get through this period and a bunch of things as well. I think that’s the general idea.

Dimitra Taslim:
I guess my next question is on what signals are you looking out for, when you think it’s time to be aggressive again, and previously when we spoke in the last podcast, we spoke about a few initiatives, one is diversifying the category and SKU mix. The second one is also going a bit more upstream, maybe even owning some of the assets upstream, so you can control the quality of the experience. Are you guys still looking at those things? And when do you think is a time to be aggressive and look at these things again?

George Hendrata:
So one thing is that when we look at the rebound that is happening in China and also in some part of the US and Europe is that domestic travel will rebound first because people want to explore areas close to them. And later on, Gaery can take us to the campaign, which is exactly that we encourage people to go and have a vacation standby. So that’s one. Second is that the sense that we’re looking at is all the things available to us, which is we monitor traffic, we monitor basically activity on the internet, we monitor basically people’s interest in travel. And we look at things which basically become very relevant to them post COVID, it is the place clean, it is the place implementing all the kind of measures which is needed post COVID, social distancing, frequent cleaning. And then you also talk about flexibility, because people not sure whether they can travel about, they want to book with good deals, but they also want the flexibility to plan and then change their plan maybe frequently. And then we have to make it easy for them to do it ever done before. Because now the requirements as you have seen, in some of the travel bubble you need tests, you need what they call it health passport, so we’re working with a lot of companies to make it easily accessible to the average travelers, so they don’t have to go to many site to be able to get all the info they can on the fingertips.

And the last one is that we also notice a lot of likelihood of people are impacted. They might have lower bargaining buying power. So we have to make it easy and more affordable for them to fly and to travel with all kinds of payment options. And we do this as you have seen, this is something that we don’t have a crystal ball on, so we don’t know when it’s going to last. So we take as a company, we prepare cash flow for a little bit over a year. But we also be prepared for a rebound as soon as it is possible. If the rebound is happening within two weeks from now, we are also ready. So we have put everything basically a lot of guarantee and be able to basically take the opportunity when it comes. Because we do see that this period is very rare, it can be once in a lifetime phenomenon where everything got reset. And when you using this time to also focus on our people who basically, still hiring, we have hiring freeze on some departments, but on other areas like product and tech, we are still looking for great talents to hire and you cannot find a better time to hire them than now, when you have a lot of other companies, they have to let go some of the employees while we are still looking for great talent to join us and cover the tech and product gap that we have and even go beyond. So that’s the idea of this period. We’re using this crisis as an opportunity to basically rebound and get out of this stronger than ever before.

Gaery Undarsa:
So I think some of the most straightforward thing that we can do, so there’s gonna be a new normal coming up very soon. And actually, in fact, the way we see it is actually in some places that’s actually close to big cities, metropolitan cities, for example, in Jakarta, we have a small mountain. That’s usually very touristy and crowded, actually, this past two weeks, it has been quite crowded. So I think people really wanted to go out. So that’s actually a good thing. Some of the things that we do, we’re gonna have a campaign specifically for, we’re going to start with hotels in this case.

And why hotel? Because hotel, has definitely some supply, there are plenty and I think interms of prices, they really wan customers coming in. So we actually worked closely with them. This campaign is specifically to induce people to do either self quarantine or to do staycation. So they can stay within your city, or very close to the city, but they can stay in the hotel, for example. So that’s some of the things that we can do. Another one also, like George already mentioned, obviously, travel is never going to be the same again. So from Tiket.com, we need to introduce and I think we really want to help our customers to be able to navigate the new normal of travel easily. Some of the things that we cannot identify these two things, one is actually cleanliness, and the second one is actually flexibility.

There are a couple confidential projects in these two fronts. But I think you kind of get an idea. So we’re going to leverage this two cleanliness and flexibility towards all of our products and platform. So, people and our customer and travelers, they can easily find information, they can get the thing that they really want. The way we see this is a before profit. Everything is about price. People, Indonesians especially, they always look for promotions, discounts and all those things. But I think right now, it kind of changed all of the marketing game. It’s not just about promo and discounting, but it’s about the additional cleanliness. It’s the safety healthy standards. Second is actually in terms of uncertainty, there are a lot of uncertainty in travel these days. So we need to help them in this uncertainty period so they can have some kind of peaceful mind as well, by offering them some kind of flexibility products. So that’s actually the couple of things that we’re actually working on right now. We’re actually very excited for the upcoming new normal travel.

Rita Yang:
I heard Brian from Airbnb said on the other podcast that Pittsburgh is the new Paris, so I think it’s pushing.

Gaery Undarsa:
It’s practically the new practice.

Rita Yang:
Yeah exactly. The little obscure village that is one or two hours of driving from the distance is going to become the destination and we hope.

Gaery Undarsa:
We call for you guys that Bali will become the new Maldives as well.

Rita Yang:
We’re definitely looking forward.

Dimitra Taslim:
Actually, George showed us this really cool polling about the destinations that people really want to go. And actually beach is the number one by far, followed by mountain.

Rita Yang:
Okay, last question. So for both of you as leaders going through this very unprecedented time, what is the thing that you find most difficult about and what is the one piece of advice that have helped you going through this time?

George Hendrata:
Okay, so for me basically, when I look at people who has been in work from home for a while, and they haven’t cabin fever, the most difficult thing is not being able to answer when they can get out. So the uncertainty is vague. And you don’t know when, and this is a big thing, because for companies, you need some level of certainty to plan. For your strategy, for your excellent plan, for your financing, for your funding, the whole thing, the whole gamut. So one is a big uncertainty on how long it’s going to last.

Second is also that, again, humans crave for physical connection and even for eye-to-eye communication, and also traveling. So travel is innate within us. We want to explore the world and basically this is taken away from you. And for some people, it’s hard to basically cope with this psychologically. And for us, the second element of this crisis is that first we focused on the customer. Second is also focus on the people. We make sure that when people work from home, they getting all that is needed for them to work from home, we will spend more time on one to one person counseling, and our people has created a special channel for people who can basically have counsel, when they are the bit depressed and when they have issues. We’re creating places where people can gain together as a company, so that they can still feel sociable, even during this time, or having a Google meet over drinks or coffee. So these are some of the stuff that we’re trying to create so that even though it’s not normal, you try to do the best technologically, because in the end, eventually, no matter how big the challenge is, as long as people can withstand it, people can persist through it. Then you have time. And so that’s why we focus on all these elements very, very closely. Meetings are getting a bit longer during work from home, it can be a bit more tiring. So we are getting people to prepare for meeting a bit more, so that you can get through meetings quicker and you can get through meetings more productively because materials are more ready than the norm. And also, we are encouraging people to communicate a bit more sensitively during this time when they can get a bit more upset, not because of the content of the meeting, but for things that are happening at home since the home and the work is getting blurred. So I think that that’s the main challenge. And that’s how we respond to it.

Gaery Undarsa:
I think George practically already mentioned almost everything. In our case, like you mentioned, travel is practically one of the first sectors that got hit pretty bad, and probably also one of the last recover. But I think as leaders, and also as people who actually works in travel industry, I think the way we do things, I think the first step, obviously, we need to be able to be more positive on the outlook. In order to do that, I think instead of trying to pretend that everything is okay, the way we see this is actually we’re trying to find the good in everything. So for example, during this work from home period, there are actually a lot of things that we’re very surprised that we can do very effectively and efficiently.

One of the things actually that I’m really surprised and proud of is actually I never believe that any Indonesians can work from home. That’s actually my belief. But actually, because of this COVID, everyone has to be able to work from home. No matter you’re a staff, or a supervisor or a manager, or even directors and chief and all those, so the level of responsibility of our employees, it’s actually really shown in this period. And this kind of opens up a lot of opportunities ahead. So apparently, we definitely can save costs in the future, in terms of, for example, offices space and all those things.

But on top of that, in terms of team as well, I think the way I see it is because of WFH period, we don’t waste so much time in the commuting. Because Jakarta is really bad in commuting. But also not just that, I think people actually attend the meeting on time. In Jakarta, it’s very rare to have a meeting that actually start on time usually, but I think because of conference call or video conference and all these things, somehow, all the meetings actually are quite on time. Within a day, we can actually finish like a lot of meetings. Not just that, especially from our product and tech perspective, they can actually get a lot of things done as well. Well, me personally, from the marketing perspective, I can see a lot of things get done from them, even though we definitely want more. But again, I think I can see some kind of improvement. So yes, the upcoming time I think is gonna be very new. Not so normal. I think it’s gonna be very new to us. But I think there’s also a lot of positivity coming out of this as well. So we kind of looking forward for the time where travel will recover, even though it’s gonna be very different. But, one thing for sure is actually we know that people really urge and really want to travel. People are really looking for the time where they can finally be outside safely with some kind of safety measure. So yeah, definitely, there’s gonna be a travel optimism coming very soon. So I think positivity and trying to see the good in everything, that kind of works.

Rita Yang:
Thank you, guys, so much for sharing that with us. It’s really refreshing to talk to the founders who are genuinely very optimistic with all of the happenings.

George Hendrata:
Within all the discussions that you did during the COVID, what is the one thing that you learn which is in common with a lot of startups that you talk to?

Dimitra Taslim:
That’s such a big question. I think one thing that I learned from speaking to all the founders and other sessions that we did is that, being decisive fast is better than making no decisions at all, especially in a time of crisis like that. I think people tend to underestimate how serious the matter is. And I’ve been very lucky because as you know, we were part of the Savio Kwan session with Alibaba, and also we spoke to a lot of other Chinese and US founders, like Airbnb, which is also pretty badly hit. Luckily, they were able to raise money from Silverlake and a bunch of other guys. So I think, even like Airbnb, it made decisions very, very quickly. So I think looking throughout the history of GGV investments in some of our most successful companies and speaking to those founders, I think the biggest lesson I learned is during times of crisis like this, where there is a structural change, being decisive and making changes fast, it’s much better than waiting or not doing anything at all. Because if you make a decision, and it’s wrong, you can always change it.

George Hendrata:
Totally agree. The interesting part here, I think somehow, everyone really wants to hear about the travel sector story, I think people just love to hear a sad story. They might want to feel good about themselves. They know that we get hit really bad.

Dimitra Taslim:
Yeah, I hope you guys prove them all wrong.

George Hendrata:
Yeah, exactly. I think we will. And the reason is also instead of trying to hear miserable story to make people feel better is actually a lot of ways it can also be a leading indicator, I mean, if you’re starting to see any movement, people starting to become a bit more brave, then they know that there is a good chance of basically recovering, rather than in a complete shutdown, and it’s offered that way.

Dimitra Taslim:
Yeah, I do believe that one of the biggest aces that you have, obviously, is the fact that your competitor is owned by financial investors. It turns out one of the biggest advantages that you have is that you’re invested by a very patient investor, and it turns out to be one of the key points for your company.

George Hendrata:
Yeah, course. I mean sometimes in hindsight it looks you never planned it but in hindsight sometimes it makes sense.

Rita Yang:
In our earlier conversation, I was like, these guys don’t sound like they’re in distress at all, compared to others. It sounds like you guys are definitely seeing the silver lining of all of those and are very ready to adjust according to wherever format travel is going to take in the future. And I think the long term behavior change will be there for you guys to take advantage of, and grow much faster in the future. So we’re very happy to hear that you guys are doing all of that.

George Hendrata:
Sounds good to get a stamp of approval from a company like GGV. Very encouraging.

Rita Yang:
It’s great. Thank you so much.

George Hendrata:
Thank you!

Gaery Undarsa:
Thank you!