Social Commerce Startup KitaBeli Reportedly Liquidating

Startups social commerce Kitabeli is currently in the process of liquidation. This was allegedly a response to the business model that was carried out which was not successful product-market fit optimally. The news regarding the liquidation was confirmed by one of the trusted sources involved in this process.

Since its debut in 2020, KitaBeli has announced 3x funding rounds, starting from the initial stage in 2020 (by East Ventures and AC Ventures), continuing with the series A stage in 2021, and continuing funding in 2022. At least from the nominal announced to public, they have raise up to $30 million or around 460 billion Rupiah.

Apart from those mentioned, several well-known investors also funded the startup fronted by Prateek Chaturvedi, Ivana Tjandra, Subhash Bishnoi, and Gopal Singh Rathore, including Glade Brook, Argor Capital (Go-Ventures), InnoVen Capital, Memories Fund (Kopi Memories), and several others.

Regarding the next steps (whether just close or founder akan pivot to other businesses), we have tried to contact the relevant parties but have not received a response.

This is not the first time the startup social commerce operating in Indonesia are experiencing business difficulties. Previously in the first quarter of this year, RateS also closed all access to the warehouse they. It was observed that all product stock in the application could not be accessed. Currently, even the site and application are no longer available for transactions.

Carrying the concept social commerce, KitaBeli focuses on selling FMCG products on the market tier-2 and 3. They build a network of partnerships in various locations to help customers perform group buying (team buying) with the hope of getting a guarantee of a more competitive purchase price.

This is similar to what PinDuoDuo is doing in China, hoping to empower local communities in the regions.

KitaBeli's initial hypothesis was to reach distribution of FMCG products in second-tier cities worth more than $100 billion -- with more than 200 million consumers accounting for 50% of GDP. A less efficient logistics and supply chain system is seen as an opportunity, so a technological approach is being introduced.

One of KitaBeli's solutions is by providing warehouses and fulfillment centers in its operational areas. They claim to be able to reduce the final price to consumers by between 10%-50% -- including cutting the supply chain by sourcing products directly from brand and principal.

However, to enter a second tier city there are indeed many things that must be faced. In addition to large investments in infrastructure, players like KitaBeli are faced with the challenge of market education. The traditional model (buying small quantities of goods at a shop) and people's habits (such as cash bonds at a shop and the experience of going to a shop) are aspects that are not facilitated by digitalization.

However, not all models social commerce experienced a downturn in the market. Other players such as Dagangan are currently expanding their presence in new cities. This week they started expanding to East Java after previously focusing a lot on the Central Java and Yogyakarta areas.

The trading approach is also different, adopting a concept rural commerce which is run with system hub and spokes for last mile delivery. They supply many goods to shops in second and third tier areas.