Earn Profits, Mbiz Sets Ambitious Targets and Starts IPO Discourse

Mbiz, e-procurement marketplace for B2B and B2G of the Lippo Group, set a very ambitious target to become a player e-commerce niches at the forefront of Indonesia. This target is based on the results of the company's performance which is claimed to have made a profit, even though Mbiz has not even been established for two years. Plus players who move in that sector can still be counted on the fingers.

Although the amount of profit is not stated, Mbiz targets this year's net sales (Net Merchandise Value) can grow almost 2x to Rp3,5 trillion from last year's Rp1,3 trillion. For 2018, net sales are targeted to increase by 4x to Rp20 trillion.

To realize this target, there are a number of strategies that will be carried out by the company. To DailySocial, Co-Founder and COO of Mbiz Ryn Hermawan explained that this year the company will focus on developing service categories that are engaged in services.

This service is claimed to be a fertile field for companies because it can print profits up to double digits, compared to procurement services. The reason is based on the company's findings, from the company's total expenditure, around 90-95% goes to service procurement. The amount of allocation makes companies tempted to work on this sector.

"Last year we learned a lot from customers, most of whom were from the blue chip company level. From there, we received input that there are other opportunities outside of goods procurement services, namely the service sector. So now we are preparing an ecosystem, so that next year the business will start focusing on scalability ," said Rin.

The services that will be provided by Mbiz include: customize items, outdoor media placement, event organizer, civil mechanical engineering, gimmick marketing, leasing, and others.

This strategy is considered by Ryn to be more effective than developing numbers Stock keeping unit (SKU), because SKU is more synonymous with transactional elements. Meanwhile, Mbiz wants to push towards procurement solutions which is considered to be able to encourage the actual business.

"Because this solution offering is more directed towards solving the problems faced by the client, there are a lot of solutions that we can target."

Ready to find additional fresh funds

To support all of the above plans, Ryn revealed that his party plans to raise another round of series B funds this year. Although, he said the company was not in a hurry to implement the plan, considering that there were a number of strategic partnerships that could be developed with Mbiz investors.

"Mbiz doesn't want to be too hasty looking funding, indeed there is a plan raising funding to series B, but it hasn't been decided whether this year or not. Although in terms of numbers we set ambitious targets in 2018, in other words that surely need new funding."

For your information, Mbiz at the beginning of this year just received Series A funding from Tokyo Century Corporation (TCC) for an undisclosed amount. The funding made the company's valuation value reach IDR 1,3 trillion.

The inclusion of TCC as a strategic partner of Mbiz because the company is a financing company for various solutions. Currently, the majority of the company's share ownership is controlled by the Lippo Group.

So far, Mbiz claims its business does not rely on captive from the Lippo Group. In fact, almost 99% of bookings come from outside the group. Mbiz plans to expand to tier 1 cities such as Surabaya, Makassar, Medan, Yogyakarta, Palembang, Manado, and others. Not only that, the company also plans to increase the number of talents to around 450 people from the current position of 240 people.

In terms of business achievements, Mbiz has scored an average transaction contract value of Rp312 million with more than 100 thousand SKUs consisting of 11 categories of goods and services with more than 4 thousand sub categories.

The total number of Mbiz partners is claimed by more than 600 companies throughout Indonesia. Some of the partners include HM Sampoerna, Toyota Astra Motor, AirAsia, Bank Danamon, Combiphar, BRI, and others.

Start talking about IPO

Mbiz's achievement, which is claimed to have succeeded in making a profit in the second year since its establishment, proves that the company is able to grow positively without having to subsidize product sales. Ryn believes this achievement can be done again, if the strategy and execution are carried out correctly and appropriately.

He also hopes that this year the company will return to profit, although he did not mention the percentage of profit growth targeted.

"We hope that profit growth will be in line with business growth, although we look forward to building an ecosystem that requires a number of investment allocations that must be disbursed from profit."

Ryn revealed a number of recipes that the company used to make a profit, including not subsidizing by lowering prices beyond reasonable limits, being selective in acquisitions, proper bookkeeping, emphasizing productivity by paying attention to operational costs, and others.

"Our concept is not to do a strategy that is not profitable for Mbiz. Because from the start we wanted to create a positive business ecosystem and want to compete in a healthy manner."

Profit is one of the elements that must be achieved by a company before going on the stock exchange. When asked about this, Ryn explained that Mbiz had an open possibility to implement it exit strategy the. It's just, not done in the near future.

"Mbiz has forecast positive in 2017, the road [for IPO] will be obvious open. But the implementation year is not yet known, maybe 3-4 years, that will be another story. We do have a direction there," concluded Ryn.