The business model of garbage collection is booming in Indonesia

DNHN - Southeast Asia has hot spots for plastic waste in the ocean and this makes the region an attractive market for environmental projects.

Startups in Indonesia are giving away preferential points and other rewards in exchange for residents' recycling, to turn the country's vexing waste problem into a potential business opportunity.

Jakarta-based startup Rekosistem began testing an automated plastic bottle collection box at a busy metro station in the Indonesian capital last year.

The operation of this machine is very simple. Users scan a QR code with Rekosistem's smartphone app and then place the bottles inside. They get bonus points for every bottle they bring.

According to Rekosistem, the automatic collection box collects 100 to 120 bottles per day. The startup also operates a "Waste Station" kiosk near the station, which picks up a variety of recyclables, as well as a pickup service from families and companies scheduled on its app. surname.

Users can then convert the reward points into GoPay Coins, a digital currency operated by the Indonesian technology group GoTo. Meanwhile, Rekosistem sells what it collects to recycling companies.

The startup is still burning money to invest in capacity development and innovating features, but is expected to be steadily profitable over the next five to seven years, CEO Ernest Layman said. The company signed a memorandum of understanding with Japanese trading company Marubeni in April, seeking to leverage the company's network to increase earnings.

The competition is getting tougher as more and more startups offer to recycle collection services with apps. Octopus Indonesia operates a collection bin at the same metro station. It has signed an agreement with the local branch of Chinese smartphone maker Xiaomi to promote e-waste recycling, Indonesian media reports say. Another competitor, Plasticpay, also specializes in collecting plastic bottles.

With an expanding population and economy, Indonesia is generating more and more waste every year. According to the Ministry of Environment of this country, plastic waste has increased by about 40% compared to 2019 to 6.68 million tons in 2021.

The government has taken steps to correct this problem. The Environment Department is asking manufacturers, restaurants and retailers to reduce total waste by 30% by January 1, 2030. Companies are flocking to the sector in hopes of becoming a leader in an industry that still has a lot of market share to exploit.

However, the government alone will not be able to solve the problem. One of the reasons why Indonesia is creating more and more waste is because people lack awareness about recycling and many still do not pay attention to the problem of waste. Creating a system that can collect large amounts of waste is also important. Digital technology could be the key to this.

Startups are also tackling recycling in many parts of Southeast Asia. Trash Lucky in Thailand helps people recycle and win prizes through the Trash-to-Raffle program. People can send recyclable items to Trash Lucky in exchange for lucky draws to win prizes like gold or vouchers. While the value of the grand prize is currently 5,000 Baht (160 USD), in the future Trash Lucky aims to increase it to one million Baht (33,000 USD). In Singapore, Alba Group collects used computers, phones and other electronic devices in exchange for points that can be spent at partner businesses.

Southeast Asia is a hot spot for ocean plastic waste and has potential impacts on biodiversity. This makes the region an attractive market for environmental projects and has the potential to attract many new startups in the field of waste collection and recycling solutions.

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