Brambang Closes, Marks the Difficulty of "Online Grocery" Business

Startups online groceries Onion officially closed operations since 27 May 2022 at 9 pm WIB. In the company's Instagram account, signed 28 May 2022, Brambang pivot menjadi smartphone marketplace and electronics named Brambang Elektronik.

“We inform you that the service groceries Brambang will stop on Friday (27/5) at 19.00. The company will process orders and complaints until Saturday (28/5). On May 28, Brambang service changed to smartphone marketplace and electronics,” explained Brambang through social media account.

Pivot This is certainly far from the business model that has been run by Brambang since it first operated in 2017. Currently, Brambang Elektronik does not have its own platform, it still relies on an account in the name of Brambang on the platform. second hand marketplace, namely Carousell and OLX, which have been made since March 2022.

Both the application and the Brambang.com site itself are currently inaccessible. There is no possibility that later the new business will be moved to a more viable and professional platform. Until this news was published, Brambang's management refused to comment on the company's strategic steps in the future.

It's hard to compete in the B2C realm

The closure of Brambang is a clear indicator that the realm of online groceries B2C is not easy. Already have to compete with quick commerce supported by large capital, as is being worked on by Astro, AlloFresh, Tokopedia Now, Blibli, and others. As a result, Brambang is required to have strong capital support to build its infrastructure.

Brambang received an injection of $2 million in January 2017 (approximately 27 billion Rupiah), the exchange rate of IDR13.500 on average in 2017) from an undisclosed investor. With this amount of capital, it is certain that their flexibility is certainly not as wide as startups with the support of jumbo capital.

Moreover, Brambang is hit by its inability to provide a striking differentiation as its selling point. In other words, their solutions can actually also be obtained by consumers when shopping on similar platforms, including various types of products gimmick marketing offered. Shopping at Sayurbox or HappyFresh, maybe sourcing the products are the same, after all, the most important thing is that the goods arrive quickly in front of consumers.

This price war competition will not end and sadly will continue as long as the industry is pursuing is growth revenue, not making a profit. This principle applies not only to online groceries course, but the digital startup industry in general.

Tanihub has also experienced a similar story closed the B2C line in February 2022, marked by the cessation of the operation of two warehouses in Bandung and Bali, as well as termination of employment (PHK) of employees.

Upturn Managing Partner Ivan A. Sustiawan commented, based on his five years of experience, he believes that the following two business models are difficult to make a profit if the founder always trying to be the cheapest and fastest in the market at the same time. They are, 1) farm to table or online groceries with the B2C segment, unless merged as merchant or sellers on the platform marketplace leading.

Next, 2) delivery last mile with same or next day delivery for retail customers. "If you can make it profitable with the above conditions, then I have to learn from you," Ivan wrote as quoted in his upload on LinkedIn.

The beginning of the establishment of Brambang

Brambang was founded in May 2017 by Dustin Haliman. Initially, Brambang positioned itself as marketplace for buying and selling shallots online which is B2B. The shallots sold by Brambang are taken directly from Brebes. This city was chosen because it is famous for its crispy shallots and distinctive aroma.

Brebes is also one of the biggest shallot suppliers in Indonesia. In the interview, Dustin said that onion was chosen as a mainstay product because it is one of the important spices in everyday life.

In 2016, shallot production reached 1,4 million tons, assuming a price of IDR 20 per kilogram, so the value would reach IDR 28 trillion per year.

Despite being the main commodity, the shallot trade is inefficient. It's the same as other issues in agriculture, where commodity prices continue to fluctuate, inefficient distribution chains, and the lack of information on red bearer prices for farmers or buyers.

This is what inspired Dustin to start Brambang. Along the way, Brambang not only provides shallot products, but also other daily necessities, such as staples, snacks, fruit, vegetables, and fresh meat.