History of Bukalapak

Bukalapak was founded in 2010 by Achmad Zacky in Jakarta but the company got the PT status in 2011 with his co-founder Nugroho Herucahyono and Muhamad Fajrin in September 2011. The company operates a C2C ecommerce and currently it’s one of the biggest in Indonesia.

The trio started the company without any investors and after a year they received funding from Batavia Incubator and in 2012 they got another round of funding from GREE Ventures. They get another funding in March 2014 and during that month, they also released their mobile application. As of July 3rd, 2014, the application was downloaded by more than 87 thousand people.

By 2015, media conglomerate EMTEK became a major shareholder, owning 49% of Bukalapak. The ecommerce platform also lost a big amount of money in 2015 – based on their financial report they still lose IDR 299 Billion (approx. US$ 20 million)  and their profit only IDR 6.4 Billion (approx. US$ 0.4 million). That is kind of expected though, for Indonesian (or any) major ecommerce platforms in the growth phase – though Indonesia is a particularly competitive market.

In January 2018, Bukalapak received their “title” as the 4th unicorn in Indonesia followed by Go-Jek, Traveloka, and Tokopedia.

How they do it?

How Bukalapak could still become unicorn in 2018 while with the giants such as Alibaba, Tencent & JD.COM entering Indonesia through acquisition, joint ventures or proxies?

Bukalapak started since the beginning by having their target market was for small people neglected by big companies. The founders saw potential through some group of people who have common hobbies; through some communities they make a business platform to arrange people to meet and talk about their hobbies to sell and buy some stuff online.

In a way, not that different from how other platforms, such as Tokopedia or even Instagram, initially addressed in Indonesia. People are entrepreneurial.

After their market grow, their target market expands to SME to invest in their company and try their market. To provide SME to learn new things about online business, Bukalapak held lots of free seminar for SME online and offline (they come from city to city). It turned out to be a good strategy to attract people especially SME to make their business online, through the platform.

Bukalapak held a KOPDAR (meet and greet) (https://www.wartaekonomi.co.id/read162334/perkuat-sinergi-bukalapak-gelar-kopdar-akbar-2017.htm)
Bukalapak come to cities in Indonesia to make a seminar (https://www.wartaekonomi.co.id/read174126/edukasi-optimalkan-penjualan-online-komunitas-bukalapak-gandeng-jne.html)

Can they be trusted?

Buyer and seller online sometimes had trust issues where they can’t just trust each other unless they already know the person. This is the biggest stumbling rock in online business. How Bukalapak ensure their buyer and seller is by guarantee. They make deals with buyers where they won’t get the stuff unless they have paid and seller won’t get the money until they’ve sent the stuff to buyer. In this process, Bukalapak act in a way as escrow – in principle similar to what Alipay was serving for Alibaba, or what Tokopedia is doing. If the buyer didn’t get the stuff then their money will be returned by Bukalapak.

Where is bukalapak going now?

To gain more traffic Bukalapak is trying to make new product which is mutual funds (reksadana) where they’re partnering with bareksa.

They also have new contract partnering with Grab and they have new program called “Grab Rush Delivery” which they stated could be delivered in 2 hours and this service also operates until 12AM (night).

This year, the chatter in the seller-sphere – especially among SMEs – has been largely pro-Bukalapak and anti-Tokopedia. While the reality is not necessarily matching the perception – the perception makes a big difference in how people make choices.

You also see more Bukalapak ads versus Tokopedia ads nowadays in Jakarta.

The shadow of Alibaba

Bukalapak also has the potential of Alibaba backing, riding this wave of their positive momentum as well as EMTEK’s collaboration with Ant Financial on payment system Dana.

You might ask, Alibaba already has Tokopedia & Lazada under its wings, why would they back a third way – would that create unnecessary competition, and thus wasting investment & resources.

The answer should be: why not?!

A few billion dollars is not a lot of money for Alibaba; crucially, ecommerce in Indonesia is still in early stages – having bets in multiple top players avoids the risk of one player making huge, irreversible missteps, causing you the lose the market.

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 hello@mworks.asia.