As the world’s largest archipelagic state, the sea has always been central to the Indonesian way of life. With the world’s sixth-largest exclusive economic zone, it has the potential to be the world’s top fishing economy. However, approximately 95 percent of its fisherman are locally-based and independent of larger commercial interests. Because of this, they have the daunting task of finding a village middleman that will buy their catch. The middlemen then sell the fish to markets domestically or to larger foreign enterprises.
With this problem in mind, in 2015 college classmates Farid Aslam, Utari Octavianty, and Indraka Fadhlillah, founded Aruna Integrated Fisheries to introduce local fishing practices to 21st century interconnectedness.
True to its name, the startup has devised a vertically integrated fishing system that rapidly connects small-scale fishermen to a consistent market. The first step is, obviously, for a fisherman to go out to sea and catch fish, which is not always an easy task, but the real challenge is finding someone to buy what they catch. Aruna has changed that paradigm with the introduction of its app Nelayan Aruna.
Now, the fishermen can instantly connect with Aruna’s Miniplant, a small physical branch of the company, where they can get a standardized price (by weight) for their catch. At the Miniplant, the fish products are checked for quality and processed by Aruna’s local workers. Very often the wives of fishermen are hired to do this job, allowing them to contribute to their family’s income independently.
Once employees at Miniplant complete standard cleaning and packaging, the products are frozen there, and the second technology phase begins. At this time, the Miniplant will use the Aruna e-Commerce platform to sell the fish to a larger market.
“We export to Hong Kong, China, Singapore, Malaysia, Vietnam,” say Utari, Aruna co-founder and Director-General.
In the past, the local middlemen often spent more money on bringing the fish to a domestic market, which means they paid the fishermen lower and charged the consumer more. In contrast, Aruna’s standardization of prices means it can pay the independent fishermen more for their work and charge the consumer less.
This seems almost too good to be true. How can it be possible for Aruna to make a bigger profit than even the local middle vendors? The reliability the technology provides is key. As the platform allows commercial interests to consistently give their business to Aruna without uncertainty as to product or price, Aruna can afford to pay the locals a higher wage for more consistent work.
Theoretically, you would think all of Indonesia’s fishermen would be eager to make the switch to the e-commerce platform, but this has been the hardest part.
“Not all fishermen can use the application” said Utari, as the lack of internet connection poses a challenge in some of the 16 provinces where Aruna operates.
To solve this problem, the Miniplants employ “local heroes” that accept the fish from local fishermen when they take their catch to them.
“Once the fishermen get the better market, they get the better price.” said Utari of Aruna’s partners. “Because of that they are interested.”
In addition to a physical hub to prepare seafood products, the Miniplants serve as places to educate Aruna fishermen about using the app, sustainable fishing practices, and setting up bank accounts to accommodate their e-commerce earnings. In many cases these educators are the children of the fishermen, making the business a family affair.
Aruna has come a long way since it “decided to start the first Miniplant in my house” Utari chuckled.
These days, its Jakarta headquarters with its comfy bean bag chairs and dark blue walls emblazoned with the quotes of inspirational figures ranging from Soekarno to Steve Jobs, is a long way from the fishing village in Balikpapan, Kalimantan, where it all started. Today, Aruna boasts endorsements from the Minister of Maritime Affairs and Fisheries Susi Pudjiastuti, awards from a plethora of startup competitions, and an active user count of more than 2,000 local fishermen.
These achievements are impressive, but more important is the potential to revitalize the fishing industry - starting with the people that actually catch the fish.
For the fisherman, the benefit goes far beyond the wage increase, which triples on average. It also presents an opportunity for traditionalists to benefit from new technology. In many cases, fishing families that open bank accounts to get paid faster through Aruna’s app are doing so for the first time. Eventually, a local fisherman’s personal investment, becoming a user in Aruna, results in more earnings for the betterment of home life. These improvements create a higher circulation of spending in the local economy that stimulates further tax revenue for infrastructure, making Aruna’s business more efficient.
At its core Aruna’s “integrated fishery system” is more than a startup, it is a positive feedback loop that improves the quality of life for the integral parties.