E-commerce Startup Rollup Stretches, Gives Hope to Local Brands to Advance
The rapid growth of the digital lifestyle in Indonesia has triggered the emergence of new digital companies, with various business models that drive the country's economic growth. Among them, startups Tjufoo and Una Brands, which come with a business model e-commerce rollup as a brand aggregator.
Tjufoo was present in early 2022 by carrying the concept of "House of Brands" as a digital brand ecosystem in Indonesia. The goal is to help local brands to improve performance, through a suite of digital technologies, data platforms, artificial intelligence, as well as an experienced team.
Meanwhile, Una Brands was first born in Singapore as a startup aggregator E-commerce, and only announced its presence in Indonesia at the end of 2021. Even so, Indonesia has become one of the priority countries to support brands in developing into international-class businesses.
MSME Advantages Blend with E-commerce Startup Rollup
Co-Founder and CEO Tjufoo Tj Tham said that the presence of the e-commerce rollup business model provides a platform for business actors, including MSMEs, to strengthen their business. Then, Una Brands Co-Founder and CEO Kiren Tanna added, this business model can also help increase the potential of local brands to reach global markets.
As brand aggregators, Tjufoo and Una Brands are equally committed to developing MSMEs and local brands, from various categories and levels. Through acquisition programs, providing working capital, operational support to international business expansion.
For brands that have been acquired, the brand aggregator will provide sessions mentoring or assistance, in order to increase the scale of their business. This assistance is carried out consistently in order to provide solid guidance for long-term business needs.
"The assistance provided starts from how to use investment funds, digital ecosystems, brandbuilding, and product marketing. Then, optimizing digitization, managing manpower and procurement, to other operational matters," said Tj Tham.
In addition, Tjufoo is also present to provide capital for brands that have joined the brand aggregator. The form of capital is divided into three investment schemes. Among them are Direct Investment, Acquisitionand Hybrid.
According to Tj Tham, capital is indeed a critical problem for MSMEs. But not only providing capital, Tjufoo also provides Resources needed by businesses, to be able to reach their maximum business potential.
“Starting from upgrading revenue from sales online, expand business distribution network, develop brand equity, as well as strengthening the important elements in the business, namely marketing and operations," he said.
Meanwhile, Una Brands is here to bring new options, where the acquisition by the brand aggregator not only provides full exit in cash, as well as profit sharing for entrepreneurs. However, also protecting even lifting legacy existing to a higher level.
Overall, brands that have joined the two aggregator brands, either Tjufoo or Una Brands, are expected to be able to establish closer relationships with consumers, in order to achieve bigger business goals.
Terms and Criteria for Local Brands to Acquire Brand Aggregators
Tj Tham explained that the criteria set by Tjufoo in determining the brand to be acquired were carried out agnostic. This means that all brands from various categories and business levels have the potential to join us.
“But the main focus is on brands with a Direct to Consumer (D2C) business model. Where do business or brand owners get the majority revenue, by selling products directly to end consumers, "He explained.
Meanwhile, Kinen Tanna as Co-Founder and CEO of Una Brands revealed, the brand that Una Brands is aiming to acquire is a brand in the daily necessities business sector.
“For example, housing and housing needs, beauty and body care, baby, child and pet needs, sports, and outdoor activities. However, Una Brands also remains open to acquiring businesses outside these categories,” said Kiren Tanna.
Then, the conditions that must be met by local brands in order to get a capital solution through acquisitions by both Tjufoo and Una Brands, include:
- Has been operating with a business operational period of at least 2 years.
- Already reach profitability and have brand equity the strong one.
- Types of products sold and consumer segmentation of brands that match the criteria.
- Selling through popular e-commerce sites such as Tokopedia, Lazada, Shopee and Shopify, specifically for Una Brands.
- Also, the minimum requirements for business turnover. Tjufoo requires brands to have a turnover of up to 10 billion rupiah per year. Meanwhile, Una Brands reaches 400 million rupiah per month.
"This is our consideration to reflect the stability of the business that is being built, so that the entire digitalization process and scaling up our business can run smoothly,” said Tj Tham.
Meanwhile, for MSMEs that have not been able to meet the requirements and criteria, or are still in the early stages of building a business, Tjufoo provides an alternative solution. This brand aggregator offers the Sarinah Pandu Program, which is a support program for MSMEs, in the form of business funding, mentoring, and the ecosystem for the development of digitalization.
Flow of Capital Submission from Brand Aggregator
Tj Tham explained the process of applying for capital through acquisition by brand aggregator Tjufoo. According to him, timeline Tjufoo's capital proposal for MSMEs is quite efficient. Some of them are as follows:
- First, please note that the application process takes 9-10 weeks from introduction to funding.
- In weeks 1 to 3, brand aggregators focus on introducing brand.
- The introduction process, among others, is carried out by meeting with the business owner, introducing the business owner to growth & strategy team from e-commerce rollup startups, as well as initial data submission from brands to brand aggregators. Then, terms sheet initial will be accepted by the business owner.
- In week 4 to 8, the brand aggregator will do due diligence and also start the process legal agreement.
- Furthermore, in the 9th and 10th weeks, the brand aggregator will sign the cooperation letter, along with the transfer of funds to the business owner.
The Role of E-commerce Startup Rollup for MSMEs or Local Brands
Tj Tham is optimistic that every business can grow rapidly, one of which is through Tjufoo's digital brand ecosystem, as well as Una Brands. As brand aggregators, both focus on supporting MSMEs or local brands to advance their business digitally.
“We take part in helping MSMEs who have challenges in running a business. Starting from the challenge of strengthening brand building, digital optimization to the challenges of automation of business operations," he said.
Tjufoo megaku, so far, the number of MSME actors who have become partners continues to grow. In the future, Tjufoo is committed to continuing to accelerate the growth of MSMEs, by acquiring potential local brands in the D2C category.
"With the support of capital, we hope that Indonesia will be able to create hundreds of local brands that can compete in the global market. In an effort to accelerate this mission, Tjufoo is very open to collaboration with various parties who share the same mission,” he said.
Tjufoo himself has a mission to increase the scale of the MSME business and revive the post-pandemic economy, through digitizing MSMEs. This mission is supported by an experienced team in providing assistance to MSME actors.
"The experienced team comes from superior individuals from large cross-sector companies such as Apple, Grab, Amazon, SAP, and JP Morgan. We align all of these elements into the digital ecosystem of the Tjufoo brand, or what we call the House of Brands," he continued.
Meanwhile, at Una Brands, after the acquisition process, it will optimize the performance of local brands through technology. For example in terms of branding, marketing, supply chain, to procurement.
"As well as, expanding distribution targets domestically and internationally, in the scope of Asia Pacific, America, and Europe with a 10-fold growth target in sales value and profit," said Kinen Tanna.
Besides Tjufoo and Una Brands, there are several other brand aggregator platforms in Indonesia. Among them, Hypefast and OpenLabs, which may be options for SMEs or local brands, if interested in this e-commerce rollup concept.
Video: Una Brands Strategy to Increase the Potential of Indonesian Local “Brands”