Online retailer Blibli.com is looking for another round of funding this year and plans to raise a minimum of $75.7 million (Rp1 trillion) to bolster its distribution chain. The move is part of the firm’s defensive strategy to strengthen its position in Indonesia – southeast Asia’s largest market – after China’s Alibaba aquired a controlling stake in Lazada Group earlier this month, marking heightened competiton in the region.
Blibli CEO Kusumo Martanto said there has been a commitment from existing shareholders to inject the funds, which will be used to build six warehouses and 200 fulfillment centers outside Jakarta. The additional warehouses and centers will be approximately 200,000 square meters, and will be spread across Surabaya, Bandung, Medan, Makassar, Semarang, and Banjarmasin or Balikpapan.
“Strengthening the logistics and distribution system is very important to us. I think whoever can overcome the obstacles in this sector will definitely be the market leader,” Martanto told DEALSTREETASIA on Wednesday.
Martanto said that the project will be stretched over the span of several years. This year alone the company is hoping to build three warehouses and a couple of tens of fulfillment centers to reduce costs.
He did not specify if there were any new investors interested to take part in the fund raising. But he said the company is always open for talks, welcoming both local and foreign investors.
In 2016, Blibli is targeting 10,000 transactions or a five-fold increase from last year. To reach this target, Blibli has implemented several business strategies, such as establishing a partnership with major credit card issuers, and offering free delivery service to its customers.
Blibli was founded four years ago by PT Global Digital Niaga (GDN), an unit of Djarum Group, and sells products ranging from baby diapers, mobile phones, fashion items, to motorcycles and cars. The company recently partnered with several automotive distributors to sell Toyota and BMW cars and Honda, Piaggio, and Yamaha motorcycles.
It offers more than 350,000 products from more than 6,000 brands, out of which 1,000 are local producers. About 40 per cent of customer transactions are made through the use of credit cards.