Gaery Undarsa, co-founder and managing director of Tiket.com. (The Peak Photos/Gugun A. Suminarto)
The Sky Is the Limit for Choice
APRIL 08, 2015
Indonesia has been the coming thing for businesses big and small due to its large middle-class market, which has been surging over the past two decades. This growth, coupled with increasing Internet coverage and young, technologically-savvy users, enhanced the prospects of sectors like the travel market, a potential that’s all too tangible for online movers like Tiket.com.
The startup banked in on the proliferating number of airlines, particularly low-cost carriers, which many Indonesian travelers depend on due to the country’s standing as an archipelago.
“Travel in Indonesia is becoming a lifestyle due to the growing number of airlines and the cheaper, more competitive tickets that this growth brought about,” explains Gaery Undarsa, the co-founder and managing director of Tiket.com.
“Before, [air] travel was seen as an unattainable luxury because [of Garuda Indonesia’s predominance] that was reserved for business or well-heeled travelers. But now, the increasing number of budget airlines, the sale of cheaper tickets and more flexible ways to buy them, as well as their ability to reach out to a wider market, has made traveling more universal and accessible to more people.”
When the 29-year-old returned to Indonesia in 2011 — after completing his university studies in Canada — he noticed that while the travel sector was booming, it had not yet reached its full potential, due to lagging online services.
“Back then, the only viable online travel website — as in one where we can actually buy tickets online — was AirAsia,” explains Gaery, at his office in Setiabudi.
“Most other travel websites, particularly travel agencies, which claim to offer online travel services actually provide more information than those services, as the customer has to call the travel agent or go to them to buy the tickets.”
Realizing that this system was inconvenient for most travelers, Gaery came up with a model to automate the system by making the proper frameworks to enable customers to make online ticket purchases.
“The models we used are websites like Expedia or Priceline in North America. But we tailor it to the unique circumstances of the Indonesian airline sector,” explains the Simon Fraser University double major alumnus in computer science and business.
“In Indonesia, most airlines are low-cost carriers, while the ratio between them and major airlines in the United States and Australia is 50-50. Most of the low-cost carriers in Indonesia have no access to major systems that can integrate them, so we had to do so with each of them individually.”
Realizing a big idea
Like most pioneering businesses, Tiket.com faced a seemingly uphill climb on its first steps.
“When we started out, we had to borrow the licenses from other travel agents to prove to the airlines that we can make sales. In other words, we had to be their subagent,” recalls Gaery, who says that ticket sales from AirAisa, Jetstar and Tiger Air, among others, make up the bulk of his business.
“We took about six months to gain the airlines’ confidence, by which time they realized that Tiket.com had tremendous potential that would benefit them.”
Despite their initial difficulties, the company’s standing as pioneers paid it dividends.
“The airline sector revenues grew by 10 or 20 percent annually over the past decade. But because the online travel business is still small, we managed to record 300 percent growth in 2014,” he explains.
“To be exact, we sold about 7,000 tickets on a daily basis or two million tickets last year. So it’s not too much to say our revenues are about hundreds of millions of dollars, which isn’t bad for a four-year-old company.”
Planes, trains and automobiles
Of the approximately 150 million airline tickets sold across Indonesia in 2014, 80 million were purchased in Jakarta, according to Gaery. While he started the company simply selling airline tickets online, Tiket.com has since expanded.
“We now also sell train tickets, which can simultaneously be bought with airline tickets for a combined fare and make more flexible travel packages,” explains Gaery, adding that Tiket.com has a convenient app for users.
“For instance, travelers going to Cirebon from Bali can buy plane tickets to Jakarta, then take the train to Cirebon, a process that would be unthinkable a few years ago because of a lack of direct routes between the two places,” he adds.
“The surge in train travel, which went hand in hand with their improved services, also enabled us to extend our reach to over 40 big or middle-sized cities, the latter of which include Cirebon.”
“It also extended Tiket.com’s reach to the lower-class market, which currently make up 15 percent of our users.”
With more than 25,000 train tickets purchased off Tiket.com in 2014, Gaery says they are expecting to triple that figure this year — especially in April, when people start preparing for Idul Fitri plans.
And along with airline, train and car-rental services, the company has included an entertainment option for users to purchase tickets to concerts or shows.
“This field [entertainment], as well as the travel sector is helped by our market’s concentration in Java, particularly urban centers in which Jakarta predominates, as well as cities like Surabaya, Bandung and Medan,” explains Gaery, adding that they sell tickets for a variety of venues including Waterboom, Kidzania and even Universal Studios in Singapore.
“Internet coverage and penetration in these cities is quite extensive; and it’s helped by the widespread use of smartphones, though we’re improving our mobile Internet services as much of our business is geared to the Internet.”
While the volume of Internet usage has grown to about 40 percent of the urban population, this figure, according to Gaery, is set to increase in line with the growth of the middle class.
Go East, young man!
With Jakarta, Bali and Surabaya rounding out the top destinations for users at Tiket.com, Gaery noted that they would soon be extending their reach to eastern Indonesia — in line with President Joko Widodo’s goal to improve connectivity in that part of the country.
While Tiket.com sell tickets from various regional airlines catering to travel across eastern Indonesia, such as Wings Air and Express Air, Gaery admits that inadequate infrastructure means that they are still limited with what they can do.
“For instance, many of those airlines fly turboprop planes which are rather basic. Yet a flight from Makassar to Kalimantan can cost between Rp 5 million [$385] to Rp 10 million,” Gaery explains.
“We can only sell tickets that are available, as these constraints make it impossible for us to offer discounts. We also want to avoid the manual efforts to get around this, as it will turn us into a regular travel agent.”
But despite these obstacles, Gaery says they are determined to stick it out as demand for travel in eastern Indonesia grows. However, he adds that some areas like Papua, will remain a blank space, due to low demand and inadequate infrastructure.
For now, Gaery says that Tiket.com is focusing on improving its services for the frequent individual travelers that make up its niche.
“We aim to sell three times as many tickets, or six million tickets, and consolidate our added value train, hotel, and car rental services,” he explains.
“We stand to reach this target even in the wake of the Air Asia tragedy earlier this year, as the government raised low cost carrier tickets by 25 percent,” he adds.
“The slump in low-cost carriers, including a recent crisis with Lion Air, also means more people will go to major airlines like Garuda and Citilink, which also will increase revenue for us.”
With plans to increase his number of employees from 220 people to 350 this year, along with adding a Singapore branch to the already existing representative offices in Bandung, Surabaya and Bali, Gaery says he’s ready to take his company to the next level.
While he plans to invest more in mobile services, his priority will always be to focus on Indonesia as his main travel market.
But regardless of Tiket.com’s outlook in this competitive industry, Gaery says he believes that the sky really is the limit for this company.
As the main man behind Tiket.com, Indonesia’s pioneer in online travel, Gaery Undarsa noted that the primary destinations for its users, whether for work or play, remains consistent with the nation’s urban centers.
“The source of Tiket.com’s tickets are from Jakarta, which doesn’t count as it’s our main market, followed by Surabaya, Bali, Yogyakarta, Bandung and Medan.
“Of these, Bali is still the favored holiday destination, followed by Bandung, due to its proximity to Jakarta, and Yogyakarta,” he explains.
“Of these destinations, my favorite places to visit are Bali, Bandung [West Java] and Malang in East Java.”
“I feel familiar with the latter as I have roots in East Java, as my father’s from Jember and I was born in Surabaya.”
When it comes to pinpointing his favorite destinations around the world, Gaery Undarsa is equally discerning about his choices.
“My destinations of choice include Tokyo, San Francisco and Vancouver,” Gaery says.
“[Vancouver] is particularly meaningful, as that’s where I spent most of my formative years, including university studies there and a five-year stint at IBM’s Canadian branch.”