Telkom Indonesia’s e-commerce, Blanja.com, officially closed on October 1, 2020. The announcement of the cessation of ecommerce operations is through the Blanja.com website.
For those who do not know Telkom Indonesia, or Telkom in short, the 164 year old company is the largest telco in Indonesia and has thus branched out to media, property and fintech. LinkAja, one of Indonesia’s largest mobile wallets, is largely based on Telkom’s T-cash system, before consolidating payment systems/wallets run by other state-owned entities.
In the announcement, Blanja.com said it had stopped purchasing activities at Blanja.com because of a change in strategy. Blanja.com says consumers can still complete their purchases, sales, payments and deliveries which are already in process.
Blanja.com is a joint venture between Telkom and eBay from the US. It was officially launched in Indonesia in 2014 – as one of the earlier ecommerce companies in the country that had significant backing.
It offered mainly Indonesian local products. Blanja.com’s competitive advantage was that this platform provided a cross border trading service that allows users to buy and sell goods at eBay stalls.
Based on the iPrice website report in the second quarter of 2020, Blanja.com still recorded the number of monthly active users of around 947,500 people. The company back then had a headcount of about 250 executives (probably excluding on the ground employees who did not have a LinkedIn profile).
That number was quite small, especially compared to bigger platforms like Shopee and Tokopedia. And it kept falling:
Chairman of the Indonesian E-Commerce Association (idEA) Ignatius Untung assesses that Blanja.com might have shifted focus to the ecommerce business in the corporate segment and micro, small and medium enterprises (MSMEs) with B2B transactions. He also stated that Blanja.com shutdown did not mean that Blanja.com could not compete with other competitors. Telkom and eBay have the money and competencies to do it right.
But still, the competition in Indonesian consumer ecommerce is no joke with Shopee and Tokopedia in the scheme with their massive shopping campaigns. Their efforts onboarding customers from hiring some Kpop big stars and famous soccer players, also jumping to the completely new sector such as insurtech; it certainly needs loads of cash.
Telkom or eBay might have the money, but is it worth it? Might as well do it for other, more promising businesses and let the ecommerce giants burn their money.
Is B2B the right call?
In line with the company’s transformation program, starting October 1, 2020, Telkom will only focus on the ecommerce business in the corporate and MSME segments through B2B transactions.
This is part of the company’s strategic steps to develop the ecommerce business in a better direction, in line with the company’s long-term strategic plan in order to increase the company’s profitability. Currently, Telkom is focusing on developing and capturing ecommerce business opportunities in the enterprise market.
One of them is through the UMKM Digital Market (PaDi) which is an instrument to drive the local economy to develop businesses and the MSME ecosystem. As for now, buyers of PaDi have to come from state owned company’s staff.
A source said that Telkom recorded the value of transactions in the digital market or PaDi for MSMEs as of October 9, 2020, around IDR 19 billion (USD 1.28 million) from 7,829 transactions with 25,501 MSMEs onboard. (Please take it with a grain of salt, though).
Working with their privileges as a state-owned company, it should be easy for PaDi to onboard sellers. They can provide financing to the MSMEs as financial issues are crucial for this business. Also, they can push other state-owned companies to buy from them. Other than that, B2B competition in Indonesia is relatively “tame” compared to B2C commerce, so it’s possible for PaDi to become a big player.
Is it the right call, though? I can only tell that they should give more attention to supply and demand issues, cultural resistance, and revenue models among many things they need to figure out. B2B business is not only onboarding sellers and buyers after all.
However, using their state-owned backing and Telkom’s track record for execution (think LinkAja), there could possibly be some refreshing change to the business transactions with state owned enterprises.
That would not be straight forward, but if Blanja.com really is able to crack it, it will offer not only business, but also big societal values.
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Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].
