Online-to-offline e-commerce platform Bukalapak, which became the first Indonesian unicorn to list on the domestic bourse in August, is making the most of its connections with the Emtek group, Grab, and the Salim Group — a tie-up that could see all parties accruing benefits.
The entities, which are linked through their cross-holdings and investments in each other, are bringing about synergies in their businesses, DealStreetAsia has learnt.
Emtek, the biggest shareholder in Bukalpak with a nearly 24% stake post the IPO, also owns 5.88% in Grab Teknologi Indonesia, the local unit of the ride-hailing giant. Moreover, Indonesia’s Sariaatmadja family, the biggest shareholder in Emtek, is participating in the $4 billion private investment in public equity (PIPE) deal that is part of Grab’s SPAC merger with Altimeter Growth, announced in April.
Meanwhile, Grab picked up a 4.6% stake in Emtek in March this year.
The Emtek-Grab connection has resulted in Bukalapak onboarding Mitra Bukalapaks — traditional stalls and the company’s individual agents — onto the grocery service GrabMart, available on the Grab platform, this year. The Mitra Bukalapaks sell goods like consumer goods, and staples, to Grab’s customers.
“We spend a lot of time with merchants [Mitra Bukalapak’s]. They are concerned about two things — increasing demand and lowering costs. That’s exactly what we offer them when they plug directly onto the Grab platform — access to all our customers at the lowest CAC [Customer Acquisition Cost],” Reuben Lai, senior managing director at Grab Financial Group said on Sept. 29 at the Asia PE-VC Summit 2021, organised by DealStreetAsia.
He was speaking at a fireside chat titled ‘Moving beyond payments to grow as a formidable fintech business in SE Asia’.
In the first half of 2021, Bukalapk had about 8.7 million Mitras, up 24% from 7 million at the end of 2020. By the end of 2021, Bukalapak aims to have 10 million Mitras.
“It makes sense for us [Grab and Bukalapak] to do something together, instead of doing everything on our own… We are currently discussing how we can digitalise SMEs,” said Bukalapak CEO Rachmat Kaimuddin at a separate fireside chat on Sept. 29 at the summit.
“The partnership, if executed well, can be a strong pillar of support for Bukalapak amid the onslaught from rivals Shopee or Tokopedia,” said Jianggan Li, founder and CEO at the investment consultancy Momentum Works.
According to data from Price research, in Q2 2021, SoftBank-backed Tokopedia dislodged Shopee as the top e-commerce player in Indonesia. Shopee had been perched on top since Q4 2019. Tokopedia’s total visitors reached 147.8 million on a monthly average basis in the quarter, while Shopee had 129.9 million visitors. Bukalapak lagged behind with 29.5 million visitors.
Grab’s deliveries, payments verticals to benefit
Meanwhile, Grab could see its deliveries and payments verticals accruing the benefits of the Bukalapk connection.
“Grab is doubling down on deliveries across Southeast Asia, and its on-demand fulfilment network will be a very powerful tool for e-commerce customers,” said Jianggan Li of Momentum Works.
Grab, which is aiming for a Nasdaq listing this year following its SPAC merger, is betting on financial services as its new engine of growth. In this regard, Grab plans to provide Mitra Bukalapaks access to financial services such as microloans.
“In terms of financial solutions, it’s still unclear how far both companies can go in the sector, as Bukalapak also partners with Standard Chartered. However, Grab will benefit from OVO’s presence among the Mitras,” said Angus Mackintosh, founder of CrossASEAN Research and Insight Provider at Smartkarma.
On Friday, Abhimata Anugrah Abadi — an entity owned by Alvin Sariaatmadja, president director at Emtek — took a 12.4% stake in OVO. The move helped Grab trim its stake in the payments company to 79.5%, and comply with an Indonesian regulation governing local ownership of shares. Earlier in the week, Grab had increased its stake in the payments firm to over 90% after buying out the shares held by Tokopedia, Lippo Group, and the Japanese financial services company Tokyo Century.
Having cleared the regulatory hurdle, and with a majority ownership in OVO, Grab will look to be a more significant player in Indonesia’s digital payments space.
Mackintosh argued that Grab and Bukalapak also stand to gain from the access to data that is invaluable to small merchants. “There’s potential for collaboration on things like logistics and distribution, but, importantly, Grab can provide very small loans to merchants. And Bukalapak will provide them with data… you’re not going to do it without having any data on the merchant.”
Ties with Salim Group
Besides Grab, Bukalapak also has plans to collaborate with the Anthoni Salim group, a conglomerate with diverse interests ranging from banking, food, automotive, and retail to IT infrastructure.
The group, which holds a 9% stake in Emtek, runs Indomaret, a chain of 18,000 retail stores across Indonesia.
Speaking on the potential collaboration between Indomaret and Bukalapak, Kaimuddin said his company is looking to combine the best of traditional and modern retail.
Meanwhile, Grab has plans to onboard Indomaret onto GrabMart. “We will soon announce our partnership [with Indomaret]. At the moment, it’s still a pilot project with a few dozen Indomaret stores,” a Grab spokesperson told DealStreetAsia.
Another potential route to collaborate is to utilise the large scale of retail chains in Indomaret, as Grab’s rivals have tied up with offline retailers.
Grab’s archrival Gojek owns stakes in the Lippo Group’s retail chain, which runs Hypermart stores. Meanwhile, Djarum-backed BliBli has announced plans to acquire a 51% stake in the high-end retail store Supra Boga Lestari (Ranch market group).
Last week GoTo, formed from the merger of Tokopedia and Gojek in May, picked up stakes in the Lippo Group’s investment arm Multipolar (MLPL) and retail unit Matahari Putra Prima (MPPA). GoTo’s purchase of stakes in Lippo Group entities and the latter’s proposed participation in the former’s pre-IPO round are seen as a larger move to further cement the ties between the two.
“Rather than online players investing in the inventory themselves, which is very expensive and capital hungry, the online players can become agents for the offline stores, which will likely reflect the potential partnership between Grab, Bukalapak, and Indomaret,” Mackintosh added.