Ula Decides to Leave the FMCG Distribution Business; Layoffs again

Ula made another round of layoffs as a result of adjustments to business strategy. This news was officially announced via company siteHowever, it did not provide details on how many employees were affected.

Reliable sources we interviewed said, this is a wave layoffs The third with the largest number leaves around 50 employees at the VP and Head level alone. The Company has committed to providing fair termination compensation in accordance with applicable local legal requirements.

He also mentioned that the plan pivot Ula is based on poor business performance in recent times. This is indicated by difficult sales and small order quantities. Serving businesses at the micro level, Ula is also faced with the challenges of thin margins and large consumer acquisition costs.

Previously at the end of 2022, Ula too announced layoffs. Impacted 134 employees (23% of the total).

As stated in an official statement, Ula decided to immediately leave the inventory-based FMCG distribution business. However, it has not yet been announced where the business will go next. They are shifting efforts to businesses that can better thrive in the current environment by leveraging technology, as well as focusing on businesses that have high margins and greater capital efficiency.

"We started the Ula journey with a dream to transform B2B commerce. As the world struggled with the impact of Covid, we created a comprehensive distribution platform to deliver everyday essentials when other providers were inconsistent or unavailable. We provide reliable delivery with a wide selection and good prices to small traders in Indonesia. Serving traders in the neighborhood opened up opportunities to expand into the trading core of the neighborhood. Our efforts were initially successful, despite the challenges brought by the pandemic as Ula's FMCG distribution business became a respected name among traders , suppliers and investors. But like many businesses, we have had to adjust our focus towards long-term economic sustainability. The scale and complexity of an inventory-based distribution model requires a level of investment that has proven difficult, especially in a sluggish digital economy."

Ula business concept

Serving traditional stalls and retailers, Ula tries to empower technology to streamline the FMCG goods supply chain. The solution consists of three features. First there is "Friend Ula", in the form of application marketplace B2B which provides various products at competitive prices. Then there's "Friends of Ula," designed as a community-based sales program that allows anyone to help others get merchandise.

Lastly there is "Point Ula", offering partners (individuals) who have empty space as a pick-up point for customer ordered goods. The latest statistics, there are around 200 thousand Ula friends who have utilized the Ula ecosystem to access 10 thousand product SKUs.

Ula was founded in early 2020 by 4 people founder who have quite a long experience in the technology and startup industry, namely Alan Wong, Derry Sakti, Riky Tenggara, and Nipun Mehra. Since their debut, they have raised approximately $140,6 million in funding from investors. The following is a list of investment rounds that Ula has successfully recorded: