Bukalapak Aims for Sustainable Partner Performance Growth, Expands Reach to Regions

PT Bukalapak.com Tbk (IDX: BUKA) seeks to strengthen the Partner network with its current performance achievements. In the first semester of 2021, the company recorded Mitra's revenue of Rp290 billion, an increase of 350% (YoY) to a total of 8,7 million. The number of Partners has grown significantly compared to when they just started this service in 2017, which was only 2.800 Partners.

Based on the financial statements for the first semester of 2021, Bukalapak Partner contributed greatly to the company's total business by recording Partner's Total Processing Value (TPV) of Rp23,9 trillion, an increase of 227% (YoY). Partner's contribution to TPV increased by 22%.

Average Transaction Value (ATV) also rose 98% (YoY) triggered by the increase in the number of products and services offered by Bukalapak to partners. Meanwhile, Mitra Bukalapak's revenue contribution to total revenue increased from 12% (2Q20) to 33% (2Q21).

To DailySocial.id, CEO of Buka Mitra Indonesia Howard Gani said, Bukalapak also strives to achieve sustainable growth while continuing to improve the quality of good operational cost management.

It will continue to develop products and services so that partners can improve their business capabilities and compete with modern retail businesses. Moreover, there are still many stalls and MSME segments in Indonesia that have not been digitized and have been touched by digital platforms, such as: e-commerce, ride hailing, online payments, digital banking, and OTAs.

"We will continue to expand our reach to various areas in Indonesia, especially outside tier 1 cities. We want to optimize the spread of technology in these cities by introducing the benefits of technology through stalls and individual agents," he said.

Nielsen's survey of 1.800 warungs and 1.200 credit kiosks also mentions Mitra Bukalapak as the leader in the O2O market with a penetration of 42% compared to O2O players who have 2,5 times more users in this survey.

Bukalapak partners are also called mastering categories Grocery/groceries by 55% and virtual product penetration 52%. Currently, Mitra Bukalapak has various product categories, ranging from physical, virtual, financial products, to products for daily needs.

Mature ecosystem pushes O2O concept

In a publication entitled "Differences in Implementation and Implications of O2O Commerce in Indonesia and Other Countries" which was published in 2016, the concept O2O commerce actually already familiar in Indonesia. This trend is gaining popularity in line with the efforts of a number of digital platforms to enter this segment. However, its penetration is still limited and concentrated in big cities only.

The e-commerce ecosystem at that time was considered immature now. People are still reluctant to transact in E-commerce due to a number of factors, including the inability to see physical products, uncertainty in product quality, payment security, and poor logistics infrastructure. In addition, the penetration of online payments is also not as strong as it is today.

This research also states that the implementation of O2O services in Indonesia is still lacking compared to other countries, especially in terms of the use of smartphones, social media, and gamification services. In fact, Indonesia has great potential to develop O2O by targeting 3,6 million stalls and 65 million MSMEs.

Based on CSLA research in September 2019, 65% of the total 189 million retail transactions came from stalls. Most of these transactions are in the form of daily necessities which are usually obtained from traditional markets. This figure is much larger than transactions from digital platforms, such as e-commerce, ride-hailingand online payments, which only reached 81 million.

Thus, since the last few years, the perpetrator E-commerce start aggressively targeting stall partners or MSMEs in cities tier 2 and 3, and is not limited to the island of Java only. There are also those who expand their reach to Eastern Indonesia. Sector E-commerce also now has a complete product ecosystem to support its business, such as logistics delivery and warehousing.