How digital fuelled Baba Rafi’s globalisation
By Masyitha Baziad January 7, 2016
- From a single kebab stall to a global business a dozen years later
- Even the most basic digital awareness can give a company an edge
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THE conventional wisdom is that digital technologies level the playing field, so much so that it is not only large enterprises that can play in the global marketplace.
Certainly PT Baba Rafi Indonesia chief executive officer Hendy Setiono (pic above) believes so, and his company has successfully harnessed digital technologies to develop its Kebab Turki Baba Rafi franchise into an internationally-known brand.
The Kebab Turki Baba Rafi business currently has 1,200 outlets – predominantly in its home market of Indonesia, but also in Brunei, China, Malaysia, the Philippines, Singapore, Sri Lanka, and further afield, even in the Netherlands.
Hendy says his ambition is to increase this to 4,000 outlets in Indonesia and 200 overseas.
And he doesn’t think of Baba Rafi’s business as being just about food. “Actually, Baba Rafi’s key business lies in its ability to utilise digital, especially for promotions,” he adds, speaking recently to Digital News Asia (DNA).
Baba Rafi is now a multimillion-dollar company that employs about 1,500 people. Not bad considering its birth about a dozen years ago, when Hendy – 20 years old at the time – and his wife Nilamsari had to borrow about US$300 (Rp4 million) from his sister to set up their first kebab stall.
Hendy says he and his wife never imagined their business would get this big. It was a simple business concept that anybody with a bit of capital outlay could have done, he argues.
The couple made enough money from the first kebab stall that pretty soon they had a second, and then a third.
The response was great, which boosted his confidence and made him toy with the idea of a franchise. In 2006 after he opened the Baba Rafi sixth stall, Hendy offered franchises to local businessmen.
A revamp a few years later saw the company increasingly exploring digital technologies.
Baba Rafi is now the top search result you usually get if you google phrases like ‘kebab chain,’ ‘kebab business’ or ‘kebab franchise.’
“We made sure of that,” says Hendy, adding that the company was aware very early in its life of the potential of search engines in promoting businesses, and an early believer in search engine optimisation (SEO).
These days of course, it’s also about customer engagement and social media, and Baba Rafi takes these seriously as well, he adds.
Basic business and franchise information must be updated daily, and “we make sure the people we recruit are aware of social media, and are active in using it to promote the business,” says Hendy.
It doesn’t have to be advanced use of digital technologies either, he argues: Even the most basic use and awareness of digital can give a business an edge over companies which have no digital playbook.
The e-commerce play
This digital awareness also saw Baba Rafi going into the potentially lucrative e-commerce game, with the launch of the BabarafiOnline.com platform in 2014.
This has allowed the company to diversify from the physical franchise model and into business-to-consumer (B2C) e-commerce, where it sells a variety of frozen food products ranging from frozen kebab and chicken nuggets, to burgers.
“The digital business space moves very fast and we did not want to miss out, so that’s why we created an e-commerce platform to sell ready-to-use products to consumers,” says Hendy.
BabarafiOnline.com does not sell just Baba Rafi products, but also gives other local food producers a platform to sell their own products through online storefronts.
“We have invited other small and medium business (SMB) owners to sell their products through our platform. It is mutual cooperation among businessmen,” he adds.
Hendy acknowledges that Babarafionline.com is not exactly among the top-ranked e-commerce sites in Indonesia, which is why the company also cooperates with more established platforms like Lazada and Buka Lapak to sell its products.
“The most important consideration is to make sure our products can be found everywhere; to make sure our brand has a presence in any kind of digital platform and e-commerce site,” he says.
Talents and mentoring
A few years ago, realising his growing franchise business needed professional and trusted management, Hendy made a decision he would never regret: Making major investments in talent.
“It was the right decision. In the past five years, we have developed and educated our people from the lower rungs.
“But I could not deny that such a practice also has its limitations – by bringing in professionals with university degrees, the company has grown its business really fast,” he adds.
Hendy also realised that he needed to transform Baba Rafi from a traditional, family-run business to one with professional management.
That included his own capabilities too. He has actively sought mentorship from other more established and experienced businesspeople.
“Our company was getting a lot of entrepreneurship awards, and we realised we could expand from a middle- to a large-scale business – but sometimes, entrepreneurs get stuck in making that leap,” he says.
To prevent himself from falling into that trap, he joined a community of select enterpreneurs sponsored by Endeavor Indonesia, which is dedicated to helping what it describes as ‘high-impact entrepreneurs’ via mentoring, networking and information-sharing.
“The practical lessons I got from discussions with professional people helped me to further develop my business and set a strategy for the future,” says Hendy.
Learning from others is key. “Entrepreneurs need to learn and find new ways to develop their business. Do not stay in your comfort zone – be prepared to take risks and scale your business,” he says.
Baba Rafi is not an overnight success like so many digitally-driven businesses today, but Hendy is very proud that his company is seen as not just a success story, but as an inspiration for other small and medium businesses in Indonesia to go global.
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