Democratize Gold Savings Through Technology
How Tokopedia thrives to make gold savings accessible for everyone.
Gold is a go-to investment for many Indonesians, given a history of steep fluctuations in the rupiah. While older generation preferred to kept gold in the forms of jewelry, millennials are preferred to kept gold in the form of bar (mostly made by Aneka Tambang, or Antam) which mostly sold in gold shops and pawn shops.
The two main reasons behind the popularity of gold in Indonesia are:
- Most people still prefer something tangible and can be physically kept in their own houses.
- Other popular choice for investment was property/real estate, but its high entry barrier made it difficult for the mass population to invest in.
Only few are aware of the more savvy investment products like stocks, bonds, and mutual funds. Knowledge and access to each product also contributed on the gold popularity. While gold may be popular today with a lower barrier to entry than real estate, many would still consider it expensive.
By the time this article was written, a certified 1gr gold bar is valued as much as IDR 760,000 (USD 54). Let’s consider the monthly minimum wage in Jakarta in 2019, where the number is equal to IDR 3,9 million (USD 277). This means that in order to obtain a 1gr gold bar, people need to spend 19,5% of their monthly wage. This is the reason why there are perception that, gold is a luxury item that is not affordable for most people. That being said, our vision was how to make gold accessible to most people — not only for price, but also access.
Together with Pegadaian, an Indonesian government-owned corporation which has a monopoly on fiduciary services, we agreed to build a platform where gold can be bought with a price as low as IDR 500 (USD 0,036). With the help of technology, our users can have gold saving account by starting in a small amount and have the option to redeem the gold bar only when they have enough amount to do so. Since the gold bar isn’t exactly needed, the barrier to purchase a minimum value can be excluded.
Designing an easy-to-use investment product
Our next challenge was, how to build an easy-to-use product that most of our users are familiar with. A lot of research has been done with the objective to find user pain points and expectations towards investment product experience, which resulted in unit of value being the most concerning element to users. Gold have two different units: The weight (X gr) and amount (Rp X). Gold also have different amount based on the buy-price and the sell-price, which may look more confusing to new users.
From the research, there are two things that we can learn, as also seen on the above illustrations.
- Balance in dashboard. Based on the research, we learn that most users prefer to have a display of the amount instead of the weight. This is because users believe it would be much easier to read the real-time exact value. Also, since gold price fluctuates, it helps them to quickly identify whether the price is increasing or decreasing. Thus, we decided to emphasize more on the gold amount instead of the weight by making it bigger in size and use bold typeface. Sell-price (including admin fee) is displayed by the amount, because all that users care is how much money they actually get by selling their golds. So, we need to make sure that the displayed amount is exactly what the users will get, not decreased with any additional amount or whatsoever in the back.
- Transactional Unit. Some users are more comfortable using the amount as value in transaction, while some other more are comfortable using the weight. We see this as an equal preference and thus we think it’s equally important. If users input Rp X in the amount, the weight field is automatically calculated using real-time gold price, making it more functioning as a gold-calculator. This will help users in their decision-making on the value of their transaction.
The result was amazing! Based on our Net Promoter Score (NPS) report, 65% of our correspondent claimed that Tokopedia Emas is easy to use, making it as the top reason to recommend the platform. Meanwhile, based on our Regression Analysis, user interface is the second most important factor that significantly impact user intention to use our platform. We achieved our goal to build a gold saving platform that is easy to use, even for those who are new to investments.
Hypergrowth with growth hack strategy using existing ecosystem as support
We’re done building the platform, but the real challenge is yet to come. Indonesians are fond of a lot of things. Unfortunately, saving isn’t one of them. Our challenge is how to shift the mindset of our users from consuming to saving. It may sound simple, and some companies may just run a huge ads or campaign in this kind of situation. But for us, we believe that what we need is a growth hack strategy that solves our users’ problems.
After doing a lot of data analysis, we found out that we have to shift the user behavior from consuming to saving. Based on our data, Tokopedia Emas user only shared a small portion out of all Tokopedia user. Hence, we need to raise the awareness of Tokopedia Emas and make user journey to investing as simple and seamless as possible.
We analyze our users behaviour and get into the conclusion that we may be able to do cross-selling with our marketplace transaction flow in the form of round-ups feature. As the name suggests, this feature will round-up every transaction value that users make and deposit the round-ups value into gold savings based on the real time gold price. For example, if users purchase a total transaction of IDR 124,100, they can voluntarily add IDR 900 as the gold purchase and the transaction amount will become IDR 125,000. This feature will help our users to save up during transaction. Since the offer will be on the transaction flow, it means we also have a huge exposure coming in. We ran the pilot and the result was crazy.
Our new users are increased by almost 300% in the first month we implement the feature (from month 2 to month 3). As seen on the cart above, the round-ups keep contributing to most of the new user acquisition with average monthly distribution of 83%. Users who try this round-ups feature are coming back to standalone gold platform and be retention user. The cycle keeps going and the best part was that this is 100% free from any cost.
The only thing that we need to keep on doing is to frequently analyze users behaviour on our pricing strategy. We do a lot of A/B testing on the round-ups value to fine tune which numbers drive what metrics the most. Right now, our goal is to acquire new users for Tokopedia Emas. Should there be any times when we aim for different metrics, we already have the data and we would be able to adjust faster to achieve specific goals.
We’ve made a huge step towards our mission to democratize gold savings through technology. Going forward, we will keep evolving ourselves to provide the best experience for our users, so that more and more people can access gold savings easily.
