Tjufoo Describes the Role of Brand Aggregator in Accelerating MSMEs

As one of the fastest growing economies in Southeast Asia, Indonesia offers great opportunities for brand aggregators to play an important role in shaping the retail landscape. One of the platforms involved in this landscape is Tjufoo. Targeting MSME players, Tjufoo provides support in the form of funding to business acceleration.

Strengthen infrastructure

Both the United States and China have witnessed rapid growth in services E-commerce for years. Companies such as Amazon and Alibaba have dominated the market, significantly influencing consumer behavior and market dynamics.

In Indonesia, service E-commerce continues to grow rapidly, but still faces challenges such as limited internet penetration in rural areas and logistical infrastructure constraints, hindering penetration E-commerce fully.

"Until we can be in the position of these countries, brand aggregators those targeting D2C currently have to build infrastructure. Especially for distribution online and offline, which in my opinion is currently still difficult to manage these two things. "And we at Tjufoo have carried out this process quite well, but we feel we can do it even better," said Tjufoo Founder & CEO TJ Tham.

Local distribution also plays an important role in helping MSMEs overcome various challenges and open up growth opportunities. MSMEs often face resource and logistics constraints, making it difficult for them to reach a wider customer base and expand their markets. By leveraging the expertise and network of local distributors, MSMEs can focus on their core strengths while gaining better market insight.

"I think if you want to do it scale-up to be brand nationally is still difficult and it will take time for the infrastructure to mature. For that reason mostly brand prefer to work with brand aggregators like Tjufoo, because we provide that infrastructure and special expertise," added TJ.

In the course of his business which is only one year old, Tjufoo claims to have achieve profitability and have invested in 6 brand. These include ACMIC, Granova, Cypruz, Dew It, Muscle First, and the Chocolate Kitchen. The company also plans to add about 2 to 3 more brand new to invest and join into the Tjufoo ecosystem this year.

Influence tech winter

According to TJ, brand aggregators considered able to adapt to changing market conditions, maintaining strong relationships with brand them, and continue to provide value to consumers during difficult times. This factor is one of the reasons why the condition tech winter, not really affected them.

Most of these conditions have a big impact on companies that are still carrying out money-burning and ownership activities runway limited. Meanwhile, Tjufoo has been focused from the start profitable. Next, their focus is on creating a business sustainable and continue to grow.

Similar to other businesses, maintaining financial stability, diversifying income sources, and implementing good risk management practices are important to reduce the potential impact of economic fluctuations. For brand aggregators which focuses on categories niche or offer unique value to consumers, being at an advantage when facing tech winter or financial crisis.

"Technically like venture capital and private equity, what they want from their portfolio is certain returns. I think having a startup already profitable, what's that brand aggregators or other industries, can provide value ke stakeholder especially for investors, it is a good diversification of their portfolio," said TJ.

If previously valuation was determined by an investment worth one billion dollars, according to TJ, now having a portfolio of startups that have achieved profitability is more valuable, compared to valuation assessments.

In the business world, profitability and a billion dollar valuation are two important metrics that influence decision making and investor interest. Although high valuations may open pintu for growth opportunities, but this should not override the importance of profitability. Finding a balance between profitability and valuation is key to sustainable growth and long-term success.

In the fundraising journey that has been carried out, in 2022 Tjufoo has pocketed the money pre-series A funding with an undisclosed nominal value from Aura National Park and Venturra Discovery. This year, the company plans to obtain series A fresh funds.

Push more brand aggregators

So that MSMEs receive more assistance and build more solid infrastructure, have more presence brand aggregators can speed up the process. When there are several brand aggregators operating in the market, this will lead to increased competition, which can benefit various stakeholder, including brand, consumers, and platforms itself.

"Because of my previous experience in Grab working closely with field people (driver partners and merchants) I felt like helping them, and I learned a lot from them. I want to help them scale-up. "In my opinion, it is ideal to invest in MSMEs, because the more money given to them, the greater their potential to grow," said TJ.

TJ hopes there will be more similar players. In this case, you don't have to be a competitor because the market potential is still very wide, especially in retail. Apart from large retail companies, it is predicted that in the future there will be more MSME players who will attend. According to TJ, this is ideal for brand aggregators to invest in D2C brand so that we can grow the industry together.

Currently apart from Tjufoo, players already present in Indonesia are targeting D2C businesses and offering similar services including, Una Brands, Evo Commerce , USS Networks and hyperfast.