The Closing of Stoqo and the Defensive Strategy of B2B Commerce Actors

The corona virus pandemic has hit Indonesia's culinary business. The dim of this business is unavoidable because of the danger of spreading coronavirus disease 2019 (Covid-19) which was so easy that it forced most people to only be able to move from home.

Since the first Covid-19 cases emerged in early March, the food business has reportedly continued to shrink. Losses are not only borne by actors such as middle to upper restaurants and micro and small class culinary entrepreneurs. Digital platforms that provide culinary business needs are also affected. This has already happened to Stoqo.

Stoqo has officially announced they are ceasing operations. A few days earlier, the startup led by Co-Founder & CEO Aswin Andrison only announced that it would stop operating for a while. But the pandemic finally forced them out of business.

"Since 2017, we have built STOQO to serve and empower SMEs in the culinary field in Indonesia. However, the situation triggered by the COVID-19 pandemic has caused a drastic decrease in revenue for us," Stoqo wrote on their website.

The looming threat

Stoqo is a platform that focuses on providing basic needs for places to eat, especially restaurants, catering cafes, and home-based culinary businesses. Stoqo supplies various foodstuffs ranging from meat, vegetables, flour, coffee, and others.

From the beginning Aswin stated that Stoqo was focused on playing in the B2B segment. They embody the platform as hub meet the needs of culinary businessmen. With prospects considered quite bright, it's no wonder Stoqo managed to secure series A funding from Monk's Hill Partners and Accel Partners India at the end of December 2018.

But the reality ended bitterly for Stoqo. The number of restaurants, cafes, and restaurants that have stopped operating has robbed them of their income. The Indonesian Hotel and Restaurant Association said that at least thousands of restaurants were closed due to the Covid-19 outbreak.

The bitterness of a B2B commerce business like Stoqo is also felt by Eden Farm and Wahyoo. Even so they claim the scale is still not alarming. Eden Farm's Founder & CEO David Gunawan said there are two segments they generally serve, namely restaurants and grocery stalls. Of the two, David said that it was the restaurant that was the bigger hit.

"It's true that fancy restaurants and those in malls are closing or at least so delivered, half of our clients in that segment are closed," David told DailySocial.

Meanwhile Founder & CEO Wahyoo Peter Shearer recounts a similar experience. A number of stalls affiliated with Wahyoo have stopped operating, especially those located in office areas. Peter also did not mention the exact number. However, he ensured that other stalls were not seriously affected by this outbreak, especially those located in residential areas and villages.

Defensive tactics

Although the impact is not as severe as Stoqo, a prolonged pandemic can be a scourge for business continuity Wahyoo and Eden Farm. A special strategy is also needed so that they avoid a fate similar to Stoqo.

Peter explains that the problem now is keeping the requests awake. Tips for keeping requests from Wahyoo so far is helping the stalls to be able to sell on digital platforms such as Go-Food. At the same time, the implementation of large-scale social restrictions (PSBB) in many regions has shifted spending patterns in the region Wahyoo.

"Indirectly positive, with the PSBB and Covid-19, it forces food stall owners to adapt to digital to be faster," he added.

Elsewhere, Eden Farm, whose clients are mostly grocery stores, has another strategy to stay afloat during this pandemic. David said they now rely on the agency system to reach buyers who are reluctant to leave the house.

David rejected this new system as B2C. He said that his party had only reactivated the group purchase model, which had actually existed since last year but was only revived three weeks ago.

The change in segment composition has also helped Eden Farm from the majority of their clients being restaurants and upper-middle-class restaurants to being the majority of SMEs. David said that currently 80% of their clients come from lower-middle businesses.

"We still get new customers, purchase growth customer still running. Indeed, at the beginning [of the pandemic] it decreased, but after a week it returned to [normal]," said David.

Deputy Chairperson of PHRI for Restaurants, Emil Arifin, said that thousands of restaurants had stopped operating throughout Indonesia. The estimated number comes from the number of restaurants spread across 327 malls that have closed out of a total of 700 malls. In other words, more than 8.000 restaurants have closed.

"That does not include restaurants in office buildings, stand alone, at tourist parks and at other facilities outside the mall. If you want all of them to be totaled, I think twice," explained Emil to DailySocial.

With this situation, Emil estimates that the culinary business in the country has lost around IDR 2,5 trillion per month with 200 thousand people who have lost their jobs.