Indonesian e-commerce platform Blibli.com, a subsidiary of local conglomerate Djarum Group, has signed an agreement to acquire a majority stake in grocery store chain PT Supra Boga Lestari Tbk (SBL).
In a statement on Thursday, Blibli said it will buy around 797.88 million shares, representing at least 51% of the total issued and paid-up capital of SBL, from existing shareholders. It did not disclose the deal value.
Shares of SBL rose 10% to 2,420 rupiah ($0.17) on Thursday and its market cap touched 3.79 trillion rupiah ($265.69 million).
The sellers involved in the transaction include PT Wijaya Summer Sejahtera, PT Prima Rasa Into, PT Gunaprima Karyaperkasa, PT Ekaputri Mandiri, Dr David Kusumodjojo, Suharno Kusumodjojo, and Harman Siswanto.
“We believe that SBL’s reputation, performance, and positive potential will strengthen opportunities in increasing market share, which ultimately spurs business growth for both parties,” Kusumo Martanto, CEO & co-founder Blibli, told DealStreetAsia.
SBL runs its grocery store chain under the premium brands, “99 Ranch Market” and “Farmers Market”, and operates 53 stores across Indonesia.
It also operates an online grocery called Get My Stores. However, the online grocery business contributed less than 1% to the total revenue of the company.
In the first half of 2021, SBL’s net revenue declined 7.5% to 1.48 trillion rupiah ($104 million). Its net profit also dropped 67% from 52.6 billion rupiah ($3.69 million) to 17.3 billion rupiah ($1.2 million).
According to a company disclosure on April 2021, it lowered its 2021 profit target to 40 billion rupiah as it saw weak market growth amid low purchasing power.
In 2019, Blibli established its offline business Bliblimart, which has seen a threefold growth in transactions YoY since then. Blibli also collaborates with several offline grocery stores including Alfamart, SBL chain stores, South Korea’s LotteMart, and some small convenience stores.
Interest in online grocery
The demand for online grocery services has risen amid the coronavirus outbreak in Indonesia. Based on a McKinsey report in 2020, more than 60% of customers in Indonesia plan to continue shopping online even after the pandemic ends.
A Google, Temasek, and Bain & Co report in 2020 stated that the online grocery sector is expected to grow at a much faster rate of 32% between 2020 and 2025, compared with other e-commerce segments.
The segment has also attracted investments from tech behemoths such as Gojek.
The ride-hailing giant had acquired a 4.76% stake, worth $10.2 million, in PT Matahari Putra Prima Tbk (MPPA), the grocery retail business of Indonesian conglomerate Lippo, according to MPPA’s filing to the Indonesia Stock exchange in May this year.
However, two sources told DealStreetAsia that Gojek owned more than 11% of the grocery chain under several vehicles.
Gojek’s spokesperson declined to comment. DealStreetAsia has also reached out to Multipolar, a shareholder in MPPA.
Lippo Group chief John Riady had revealed recently that the partnership between MPPA and digital companies including Gojek and Tokopedia has increased its online sales from zero to 10%. In Indonesia, Riady added, the e-commerce players realised that if they want to grow the fresh grocery market, they have to collaborate with offline groceries.
Currently, MPPA has stores in 76 cities. Riady revealed that MPPA will potentially use its stores as warehouses for GoTo, formed from the merger of Gojek and Tokopedia.