Bukalapak Focus on Merchant Expansion in 2021; Open Funding Option Through IPO

Bukalapak explained its achievements in 2020. In a virtual media conference, Bukalapak highlighted how the Covid-19 pandemic triggered new trends and shifts in consumer behavior throughout this year.

The pandemic has accelerated the growth of internet users in Indonesia. As stated by Bukalapak CEO Rachmat Kaimuddin in his presentation, there was the addition of new internet users with a growth of 37%, of which 56% came from outside the city.

From this global health crisis, he concludes three new trends, namely (1) people are becoming more aware of the importance of health, (2) centralized mobilization in the home area (home-centric), and (3) the pandemic resulted in a recession that made people more cautious about spending money.

Of course for Rachmat, the sector E-commerce including one of the sectors that have benefited from the pandemic. He noted that there was a significant GMV growth in the 2018-2020 period, which was 200%.

During this period, the company was able to achieve 80% EBITDA growth as a result of its efforts reduce cashburn. Currently, Bukalapak has pocketed 100 million users with 7 million partners.

With the increasing number of internet users in Indonesia, said Rachmat, this indicates that digital platforms have a significant role, especially in the current situation. He said he was optimistic about Bukalapak's growth and development in 2021.

"We remain committed to serving the segment underserved, not only customers sophisticated or those who are digitally literate and live in the city tier 1. Our focus is to reach this segment because two-thirds of Bukalapak's transactions come from outside the city tier 1," said Rachmat.

2021 focus, expansion merchant to innovation development

There are three main pillars that will be the focus of Bukalapak in 2021, including: talent or human resources, business growth, and capital. From the business side online marketplace, Bukalapak's main focus is to increase the number of merchant both C2C and B2C.

Bukalapak recorded significant growth, especially from the B2C segment through Bukamall with 17% growth every month throughout 2020. As of December 2020, Bukamall transactions grew 3,1 times compared to last year.

VP of Marketplace Bukalapak Kurnia Rosyada said that the pandemic made market trends change much faster than last year. Changes in product trends can change within a span of one week.

To anticipate this trend while at the same time simplifying acquisition merchant, Bukalapak offers merchant fees of 0,5% which is claimed to be the lowest compared to similar platforms. This offer goes into effect on January 11, 2021 through the Super Seller program.

In addition, Bukalapak, which has recently migrated its infrastructure to cloud will also improve features for both sellers and buyers. "We plan to develop features to make it easier for selling partners, starting from increasing capabilities to manage buyers up to analytics dashboard which is better for Profiling buyers," explained Kurnia.

Meanwhile, the CEO of Buka Mitra Indonesia, Howard Gani, admitted that he is optimistic to encourage business growth in 2021. He sees a great opportunity to innovate warung partners to digital, especially when referring to market penetration, which is still dominated by conventional transactions.

President of BukaFinancial and Digital Victor Lesmana also said that. This opportunity is reflected in the high number of virtual and financial product transactions throughout 2020.

"This is an important strategy considering stickiness and loyalty can be built through one application. That way, it can increase partners' income without having to bother looking for other ways," said Victor.

Meanwhile, the company recorded an increase in the number of Bukalapak Partner up to 50%. From the Digital Marketplace category, Bukalapak pocketed as many as 50 thousand users with 100 thousand transactions. The company also experienced an increase in the use of QRIS for transactions by doubling for two quarters in 2020.

About IPO and consolidation

Regarding the issue of consolidation which is currently being discussed, Rachmat emphasized that his party has not yet thought about realizing it. With this year's business target, his party is still committed to growth and pursuing profitability. "We still want to be independent and run Bukalapak as a company stand-alone company," he explained.

Nevertheless, Rachmat said that his party was open to the IPO option. "IPO is one option to be able to get funds and indeed technology companies at certain times want an IPO. We are open to that option and are now preparing the infrastructure," he said.

This is reasonable considering that Bukalapak plans to develop many innovations this year. Rachmat admitted that his party was focusing on strengthening the capital base and infrastructure since last year.