E-grocery Startup Crisis, Blibli Admits Difficult Challenges in This Business

Once a prima donna in the pandemic era, now a number of startups e-grocerytrouble for back in its heyday. From various reports, these startups took efficiency step by reducing employees and physical assets that were previously scattered at various points, even had to out of business.

One of the players in this segment, Blibli through Bliblimart, admits that they are in business e-grocery This is considered heavy because the margins are thin. Meanwhile, consumers want to continue to be profitable, in the sense that they are always served with various subsidies, free shipping, discounts and regular promos.

"Meanwhile, consumers want to continue to be profitable. So that we [startups] can still operate, this is also a challenge because e-grocery must cover costs, not to mention maintaining the warehouse itself. This is done another cost," said EVP of Consumer Goods and Lifestyle Blibli Fransisca Krisantia Nugraha in the Blibli Media Perspective Discussion on e-groceries in Jakarta, yesterday (22/6).

For startups with limited funds, they must rack their brains to continue to grow, while continuing to cater to price-sensitive consumers and promotions. It is certain that this condition will not last long and it will be increasingly difficult to become a long-term company. So the most rational efficiency measure for businesses targeting end consumers (B2C).

Kris, Fransisca's nickname, continues to be the biggest advantage for Bliblimart because he is part of a large group, enabling Bliblimart to continue. Warehouses can be utilized properly, not only for storing daily needs, also for the categories of fashion, electronics, mobile phones, with thicker margins, so that the ratio of expenses to incoming goods can be more optimal and sustainable.

"If there is a free shipping promotion, the application is downloaded and shopping continues. When the free shipping is revoked, the application is deleted and moved to another platform. That is a very, very common habit in the Indonesian market."

"Imagine if you only play in one vertical with only one product, for maintain cost ratioit can be healthy it will be very difficult. How can you still get consumer loyalty, not just by chasing subsidies, this is what makes these companies survive. This is what is happening," he added.

Therefore, Bliblimart began to take a new approach to gain consumer loyalty, namely by prioritizing the element of convenience. The word "convenient" may sound familiar to consumers, but from a survey conducted by the company, it turns out that consumers need a solution so that they can be more comfortable shopping for their daily needs.

"Free shipping is still there, but now it's starting to be adjusted to tiering membership-at Blibli Tiket. The more you shop, the bigger benefitsher, so now it's not as massive as it used to be. Other promos are also still available for beautiful dates and payday."

Bliblimart consumer profile

At the same time, Blibli revealed a number of findings regarding consumer trends e-grocery at Bliblimart. From internal data it was found that spending on staples increased at Bliblimart by 23% yoy in the first quarter of 2023. The products that consumers bought the most were groceries, household needs, mother & child needs, and soft drinks & snacks.

Furthermore, from the consumer profile based on gender, it is almost even. 55% are women, the remaining 45% are men. Usually the products that women buy the most are cooking oil, children's milk, tissue, and fresh food. Meanwhile, men spend a lot of coffee and toothpaste.

"Average consumer spendingThe price is Rp. 385 thousand and the majority of Bliblimart consumers are in the age range of 25-34 years," explained Kris.

The most preferred shopping time for consumers is 6am-12pm, valid for weekdays and weekends. It was also stated that the Click & Collect feature had been used by 4% of Bliblimart consumers, and the 2 Hours Until feature had been used by more than 42 thousand consumers with 3 thousand transactions per day. Usually the products purchased with this feature are frozen food, vegetables & fruit, chicken pieces, and eggs.

According to data from the Central Statistics Agency, household consumption is still the main contributor to Indonesia's Gross Domestic Product (GDP) in the first quarter of 2023. Quoting Shopper Trend 2022, the presence of digital platforms for shopping for daily necessities or e-groceries still in demand by Indonesian consumers.