GudangAda Challenge To Be More Than Just a B2B E-Commerce Platform

In two and a half years, B2B e-commerce startup GudangAda has closed its Series B funding worth $100 million. The announcement comes one year after securing $25,4 million in Series A funding. The total funding obtained has been break the $135 million mark.

This achievement is claimed to be supported by business growth. Net transaction value (net merchandising value/NVM) is said to be $6 billion. NVM is an alternative metric to GMV in e-commerce companies. Method calculating NVM isGMV minus all costs.

The question that arises is what does GudangAda offer compared to other B2B e-commerce players? You could say GudangAda is not the first player in this vertical.

In a joint interview DailySocial, CEO of GudangAda Stevensang explained, the first reason the company was able to grow quickly was because filled with solid talent with deep experience in the industry which is the company's current focus. “When we enter the industry with more than 25 years of understanding, we already have it The roadmap and a very clear strategy," he said.

Stevensang himself has more than 25 years of experience in the retail and FMCG industry in Indonesia and Southeast Asia. Previously, he led a subsidiary of the FMCG conglomerate Orang Tua Group. GudangAda's core team consists of technology and FMCG professionals with extensive experience.

Investors also support GudangAda's business. They claim to validate GudangAda's business by doing so two diligence and audit in depth before disbursing funds to candidates investees. "There are our investors who have been following our journey since last year, witnessing for themselves the number of brand retailers who have partnered with us until now."

Address the issue middle mile

The next factor is solutions offered by GudangAda. Even though GudangAda's main appearance is as B2B e-commerce, however backendIt was designed to be quite complex because the company wanted it to be resolve the issue middle mile still not yet explored by logistics companies.

According to Stevensang, smart logistics has not yet fully occurred in Indonesia. The process has not yet occurred end-to-end.

“In Indonesia there are more players last mile and first mile. So if we look at last mile it's a tremendous development, but it's still there challenges during integration hub-to-hub because it doesn't exist yet."

According to explanation Route4me, middle mile involves shipping goods from a warehouse or distribution center to a fulfillment center (including retail stores) until the product is finally purchased by the consumer. Middle mile connecting senders with drivers by using programmed algorithms to match specific product deliveries to truck drivers' capabilities, schedules and locations.

Middle mile holds an important aspect, as it offers cost-saving opportunities to companies that shipping does not have last mile. Not only that, companies can be more competitive to maintain prices for healthy margins, even in the retail business brick and mortar.

Sebagai middle mile, WarehouseThere is focus as aggregator to facilitate logistics services from large wholesalers to small wholesalers or to retailers (stall traders). So far, distributors tend to only send products exclusively to brand principal certain. As a result, truck capacity has not been maximized because there is still capacity that can be utilized.

By applying business concepts asset-light and capital-efficient, the company collaborates with vehicle and warehouse business owners, including MSME members of GudangAda. Beyond that, the company offers a dynamic transportation and warehouse management service system to make it easier for partners to digitalize their business.

GudangAda helps large distributors/wholesalers to utilize logistics or truck fleets by transporting products from other brands.

“In principle, the company's main strength is building logistics service infrastructure middle mile by Collect and integrate data which is available from distributors and wholesalers.”

Talking about logistics strategy, GudangAda consolidates transactions into a daily delivery schedule so that delivery costs are much cheaper. The company works with wholesaler partners to take advantage stock points to reduce costs end-to-end logistics.

Lastly, GudangAda empower local logistics partners to aggregate service providers as well as facilitating technology that partners can adopt so that the logistics process becomes faster. "If usually one truck only travels once, we can provide them with access to many shops so the utility of the truck increases."

For its e-commerce business process, GudangAda provides a platform for wholesalers and principal brands to sell themselves and sell directly to retailers so that prices are determined directly by them. "So all parties can sell and determine the price at which they want to sell."

GudangAda's monetization scheme is taken from transaction fees charged to sellers and logistics costs.

GudangAda solutions are considered much more "friendly" because of its nature enablers which provides added value for distributors to enter the realm of e-commerce, while empowering retailers consisting of shop owners to get access to a variety of product stock.

"Brand principal utilize our platform because value what we offer is transparent, you can access more retailer. They can know too flow-his. We don'tdisrupt, actually more Friendly. "

The GudangAda application provides an ecosystem of services complete for MSMEs, starting from product sourcing features, managing sales and purchase transactions, providing logistics transportation, as well as payment management.

Currently there are more than 70 brand principal, from local, national, and multinational, who have utilized the GudangAda platform, including Sido Muncul, Sasa, and Reckitt Benckiser. There are an additional 100 new brands that are claimed to be queuing to join. Brand principal It provides more than 30 thousand SKUs.

Currently, GudangAda is not only targeting FMCG brands, but is also expanding into the medicine or pharmaceutical, packaging, household equipment and stationery segments. This expansion is driven through partnerships end-to-end (E2E) with principals, distributors, wholesalers and retailers in the supply chain.

Become a sustainable business

As a company that asset-light and capital-efficient, Stevensang aims to make GudangAda a healthy and sustainable company. The metrics used by the company, including revenue (revenue), number of users, and amount brand principal.

"Not just making a large turnover, we maintain all these metrics so that GudangAda becomes a sustainable business."

To support this plan, the company appointed Huan Yang, former chief engineer Grab, as CTO and JJ Ang as CFO. Ang previously worked at Vietnamese e-commerce company Sendo.

Stevensang has a vision that in the future the company can become a company that empowers more merchants to transform digitally, and grow with skill set according to market needs. They can understand inventory systems, financial records, and financial support to develop their business even though they are still managing the shop.

"They are not left behind in terms of technology because they can do what they can through data, they can do digital marketing. So they not only invest in physical goods but also technology."

Supported by Series B funding, the company will strengthen the ecosystem, such as logistics services, payment systems (POS/SaaS), marketing, data and financial services. Also, plans to strengthen its position by developing technology artificial intelligence/AI to be able to offer the best personalized service for MSME traders.

It is said that currently there are more than 500 thousand stall traders in 513 cities throughout Indonesia who have purchased products through GudangAda. This year they are targeting to have 750 thousand to 1 million stalls as consumers.