Bukalapak Targets Stalls and City Markets after IPO

E-commerce company Bukalapak’s plan to sell its 25% stake to the public through an IPO on the Indonesia Stock Exchange (IDX) is getting closer.

Furthermore, Bukalapak will prepare a strategy to focus on digitizing stalls to target markets in level or tier two cities.

Bukalapak CEO Rachmat Kaimuddin said that in the future the company will continue its all-commerce business strategy, adding new products, services, and features.

In which, the all commerce business strategy will include the digitization business line of stalls through the services of Bukalapak Partners who are considered potential.

“We have prepared a strategy to focus on opening Mitra Bukalapak’s offline network, continue to digitize stalls and provide additional infrastructure for them,” said Rachmat in a virtual press conference, Friday (9/7).

Based on research by Euromonitor International, the majority of Indonesians, Indians and Filipinos shop at grocery stores. Transactions reached US$ 479.3 billion or 92 percent of the total retail market value of US$ 521 billion last year.

Has Attracted 8 Million Partners

Until April 2021, Bukalapak managed to attract 8 million partners to join the Bukalapak Partner service. Rahmat said that his company currently controls 40% of the kiosk digitization market.

In addition to focusing on digitizing stalls, the company is also targeting the urban market in tier two. Cities that are being targeted by companies include Yogyakarta, Manado, Solo, Palembang, and Pekanbaru.

The potential that is rarely glimpsed is considered an opportunity for the company. This is because some e-commerce companies tend to only target big cities. “So far, 70% of e-commerce transactions are in big cities,” he said.

Rachmat added that the current potential market is outside big cities. For this reason, the opportunities for Micro, Small and Medium Enterprises (MSMEs) outside big cities are seen as quite promising and have the potential to grow more rapidly.

It will also take part of the e-commerce business going forward. The company has also implemented this strategy, where almost 70% of Bukalapak’s business is run outside of tier-one cities.

Bukalapak President Teddy Oetomo said another strategy was to add new services. Most recently, the company collaborated with Ashmore Asset Management Indonesia to launch an investment application called BMoney.

“We are trying to add investment innovation for users, so that investment services from Bukalapak in the future are not just mutual funds,” said Teddy. It is known, Bukalapak recorded a transaction value or total processing value (TPV) last year of IDR 85 trillion.

Meanwhile, Bukalapak’s revenue was IDR 1.35 trillion. The average annual growth (CAGR) of Bukalapak’s revenue reached 115%.

Announcing the IPO Plan

Bukalapak has publicly announced their IPO plans (9/7). This Unicorn in the country plans to sell 25.76 billion shares to the public, equivalent to 25% of the total shares, with a target of obtaining funds of up to IDR 21.9 trillion.

In a brief prospectus published this Friday morning (9/7), the company offers shares to the public at an IPO price of between IDR 750 to IDR 850 per share.

As a result, the company has the potential to reap maximum funds of up to IDR 21.9 trillion and will become the largest IPO in Indonesia’s history. Of the funds to be raised, around 66% will be used for working capital purposes.

Meanwhile, 15% is for the working capital of its subsidiary, namely PT Buka Mitra Indonesia, and around 15% is for PT Buka Usaha Indonesia.

While the rest will be divided equally among PT Buka Investasi Bersama, PT Buka Pengadaan Indonesia, Bukalapak Pte. Ltd, and PT Five Jack.

The initial offering period is planned to be held from July 9 to July 19, 2021. Then, the initial public offering period is scheduled for July 28 to July 30, 2021. If everything goes well, the listing of Bukalapak’s initial shares on the IDX is planned for August 6.