WeBuy Confirms to Acquire Chilibeli, Will Become WeBuy Indonesia

A social commerce startup from Singapore has officially acquired Chilibeli for an undisclosed purchase price. Quoting DealStreetAsia, WeBuy CEO Vincent Xue said this acquisition was the right momentum because it was in line with WeBuy’s expansion efforts into the Indonesian market.

“The resources that Chilibeli currently has, both from group leaders, warehousing, and staff, are synergistic with our business. With WeBuy’s global supply chain strength, technology, product features, we will become the leading social e-commerce platform in Southeast Asia. “Xue said.

Confirmed separately, Partner at Centauri MDI-KB Kenneth Li added that the related parties have not determined further plans regarding Chilibeli’s steps forward.

“The next phase has not been decided because the [acquisition] process has just finished. Chilibeli was indeed acquired by WeBuy, but it has not stopped operating. Later operations will become WeBuy Indonesia,” said Kenneth.

In our previous report, WeBuy was rumored to be a strong candidate to annex Chilibeli. This news circulated when Chilibeli was hit by problems with its operations which were temporarily suspended in February.

The reasons given to the public are server relocation and deep cleaning of resources. Chilibeli also laid off a number of employees.

Expanding Services in Southeast Asian Market

WeBuy is known to be expanding its market to Southeast Asia, including Malaysia and Indonesia. WeBuy targets Indonesia because of the huge penetration of social media and the digital economy market. Meanwhile, WeBuy has been operating in Indonesia since September 2021.

For your information, WeBuy is a portfolio of MDI Ventures, Wavemaker, KB Financial Group, and Rocket Internet. Currently, WeBuy serves as many as 3000 group leaders and 100,000 consumers from Singapore, Malaysia, and Indonesia.

Meanwhile, Chilibeli was founded by Alex Feng, Damon Yue, and Matt Li in 2019. Chilibeli secured $10 million in series A funding in March 2020 led by Lightspeed Ventures, Golden Gate Ventures, Sequoia Surge, Kinesys Group, and Alto Partners.

The company relies on the customer-to-manufacturer business concept in bridging fresh products from farmers to final consumers in a number of communities.

The concept is here to encourage logistics efficiency and ensure product freshness reaches consumers’ hands. Since its establishment in July 2019 until 2020, Chilibeli’s business has grown an average of 150% every month.

In 2020, Chilibeli claims to have created 300 direct jobs and thousands of indirect jobs for its partners in Indonesia. Chilibeli has also developed a service called Chilimart that targets micro-entrepreneurs such as vegetable vendors to shop owners.

Online Grocery Challenge

The trend of online grocery services that use social commerce and quick commerce models is growing in Indonesia. This is in line with the increasing market demand during the Covid-19 pandemic.

In the midst of the popularity of its services, online grocery will still encounter various obstacles to increase its penetration in the market. One of them is the challenge of changing shopping behavior to online, especially for housewives who are still accustomed to shopping at traditional markets.

So far, the most widely adopted models are B2C and B2B. In the B2B segment, this model is considered more stable because there is certainty of demand and supply with large orders and periodic requests. For example, the demand for fresh staples to the restaurant or hotel industry.

Meanwhile at B2C, Tunnelerate Managing Partner Ivan Arie Sustiawan assessed that this model would be difficult to implement for platforms that have limited capital for subsidies in price wars and logistics.

These two things are important elements to maintain customer loyalty considering that Indonesian consumers tend to like promos/discounts.

According to him, to win the online grocery/agritech market in B2C, startups need to build and implement the most sustainable and efficient supply chain model from upstream to downstream. They also need to think about a profitable assortment strategy for their business.

“Don’t sell everything to everyone for the instant or quick commerce where you do the self-fulfillment,” he told some time ago.