Bukalapak Affirms the Partnership-Based O2O Segment to Be the Spearhead of Business

Bukalapak is one of the unicorn startups that are reportedly planning go public This year. Its presence on the stock exchange will increase the weighting of technology stocks and boost the visibility of the Indonesian stock market in the midst of global trends.

In the stock exchanges of the United States and China, technology companies already have a large share. In the Indonesian stock exchange, for comparison, technology companies that have gone public can still be counted on the fingers and there are no giant scales yet.

Although the company has not been able to provide an official statement about this plan, in talks with DailySocial, Bukalapak reaffirmed the new business pillars that were the focus of his attention.

Bukalapak Partner

Even though Bukalapak admits that it has "lag behind" in terms of e-commerce compared to its competitors, the company claims Mitra Bukalapak as a partner first mover in the MSME O2O segment.

Launched almost 5 years ago, Mitra Bukalapak now has around 7 million partners. With opportunities in tier 2 and tier 3 cities that are so large--a bigger portion than the tier 1 cities which are the main consumers online marketplace Currently--the company is optimistic that it can continue to expand its market.

This new opportunity not only helps the community to survive the economic impact arising from the pandemic, but is also claimed to create a positive socio-economic impact.

Bukalapak noted that many of these MSME businesses are family-owned shops (warung). For every 50-100 homes, a person or a family will open a shop in their home and sell basic Fast Moving Consumer Goods (FMCG) such as water, soap, coffee, instant noodles, etc. These stalls are mostly the focus of the community and are starting to fall behind due to the times.

Working with partners, Bukalapak claims to be able to make the stalls catch up, such as offering next day delivery services for FMCG needs, enabling MSMEs to get access to many products at lower prices.

The company also provides bookkeeping tools to digitize businesses and generate the data that makes them creditworthy. Partners are also encouraged to become agents/distributors for digital products such as credit, game vouchers, airline/bus/train tickets, and digital payments to provide additional income.

Bukalapak's financial inclusion solution also enables easy transfer of funds using a network of partners. Partners work with banks as KYC agents, enabling the unbanked to open digital bank accounts and access credit.

Digital financial services

Another potential that has become a concern for Bukalapak is financial services. Apart from the bill payment feature (PPOB) that is already available in the marketplace, the company is trying to expand into other segments.

The first step is to cooperate with a number of financing and banking services for convenience for buyers and sellers. The second step, which was only taken at the end of last month, is to develop a mutual fund investment service in a separate application, called BMoney. The third is developing Banking-as-a-Service (BaaS) services together with Standard Chartered Bank which is one of the investors. This platform is named generic nexus.

There are two focus areas being targeted. First, presenting financial and e-commerce innovations through the Bukalapak ecosystem. Second, encourage financial inclusion to 100 million users and 13,5 million MSMEs.

This collaboration will become a new financial solution, especially for those who live outside tier 1 cities and need quick and easy access to banking services.

Although in terms of technology, both claim that they are ready, in terms of regulation, there are still many rules that must be met and adjusted. For this reason, both parties ensure that Nexus has been curated to meet the requirements of the Bank and local regulators.

Standard Chartered Indonesia & ASEAN Markets Cluster CEO Andrew Chia said, "We created this financial solution in partnership with Bukalapak to provide users with a transformative and customer-centric experience that replaces traditional experiences and adapts them to be digitally connected – while still enforcing bank safeguard policies to ensure that they are not connected to the market. protect the privacy of user data.”

IPO plan

Bukalapak is rumored to be listed on the Indonesia Stock Exchange in the middle of this year. The company is also said to be exploring the potential of using a blank check company (Special Purpose Acquisition Company (SPAC) to go public on the United States stock exchange.

Funds expected to be obtained from go public this will be one of the largest for a public company in Indonesia. Currently, Bukalapak has three institutions as the largest shareholders, namely the Emtek group, Ant Financial (Alibaba Group), and Singapore's GIC.

Apart from Bukalapak, a number of other large-valued startups are also considering a similar step.

Bukalapak CEO Rachmat Kaimuddin, to DailySocial, said, "We are always exploring opportunities for the company to continue to grow and develop financially. However, for now, we have not made any decisions. Our focus is to continue to look for the right strategy to become a sustainable company and create added value for the company. partners and users for the foreseeable future."

- Disclosure: Amir Karimuddin contributed to the creation of this article