If you were to name five of Southeast Asia's popular online marketplaces, there's an extremely high chance that Bukalapak would be in your list.
Founded in 2010 by Achmad Zaky, Nugroho Herucahyono and Fajrin Rasyid, the platform was created to enable Indonesians sell their goods digitally without a huge capital.
Today, the e-commerce platform is Indonesia's largest online marketplace around with a market capitalization of over 264 million internet users. Online, it has over 4.5 million sellers and boasts 70 million active users. On average two million transactions take place in a day.
While many would argue that the unicorn startup focuses heavily on Indonesia only, it's clear that this is part of a clever strategy to grow its roots in the psyche of Indonesians before branching out across the region. After all, in terms of number of population in the region and opportunity to grow, Indonesia is a fertile ground.
Much has changed since 2010. Zaky recently resigned from his position as the CEO of Bukalapak and appointed Rachmat Kaimuddin, a former director of finance and planning at PT Bank Bukopin Tbk to steer the platform to its new chapter.
With Southeast Asia’s Internet economy hitting US$100 billion in 2019 and Google forecasts it to grow by US$1 trillion by 2025, the appointment of Kaimuddin is a timely one.
Mashable Southeast Asia recently got in touch with Kaimuddin to see what his plans are for Bukalapak and what we can expect from the e-commerce platform in the coming years.
Hey there Rachmat, first up congratulations on the new chapter in your life. You've got some big shoes to fill since Bukalapak is Indonesia's leading e-commerce platform. Can you share with us how you got the role and what did you feel when you were accepted?
Thank you, Sukhbir. I go a long way back with Zaky and with Fajrin. We shared some social circles, so to speak, so we’re not a stranger to each other. I was approached months ago and, it was the longest recruitment process that I had to go through.
Obviously, given the importance of this position, it was a very thorough process. I’ve got to meet a lot of people in the organization; the Founders, the C-levels, and the shareholders. It was a truly humbling experience to learn great things the Founders have achieved with Bukalapak under relatively short time.
I feel honoured and happy to be trusted by Bukalapak’s founders to succeed Zaky’s critical role in the company and become part of its next growth chapter. I don’t take this very lightly and if any, feel challenged to continue their legacy.
What are some important key decisions you're expected to make when you take on this role?
Bukalapak already has good fundamentals and within 10 years has successfully delivered increase in monetization which is tracking well and even ahead of all expectations. Now the task is to ensure that we achieve sustainability. I believe we can accelerate Bukalapak’s path to sustainability by focusing our energy into our key market segments, namely small medium enterprises or mom and pop sellers, and mass market buyers.
In order to do so, we have to continue attracting and retaining the best talents (people), and attracting investors to support us. These are the things I will focus on in the beginning.
What are some challenges you'll be facing and how would you go about this? Do you find these tasks daunting?
The start-up scene in Indonesia is highly dynamic and the e-commerce industry specifically is a highly competitive industry with formidable players. Bukalapak itself is one of the big players with sizable market share who can shape this landscape. However, e-commerce merely touched five per-cent of the retail market in Indonesia and tapping the remaining 95 per-cent market may require a different approach.
To tap into this blue ocean potential, it is imperative for Bukalapak to engage into a channel or platform that is less developed, for example, the mom and pop kiosks. With 2.8 million mom-and-pop kiosks and agents currently partnering with Bukalapak (and counting), we think we can serve the mass market segment by entering their existing environment, one that they are already transacting and comfortable with.
In consequence, we also create a technology and economically-inclusive society. This is challenging, obviously, but also exciting at the same time.
How would you improve efficiency for Bukalapak and what would its new strategy be?
I am looking to strike the right balance between growth, profitability and innovation. Having spent many years in finance doing many roles have taught me that, in the end, logic will prevail. We in Bukalapak do not subscribe to the strategy of aggressive fundraising with irrational spending strategy. We will, of course, invest for growth, but we will always try to be responsible with the capital given by our shareholders.
Our focus is to produce innovative services and products, deliver them to the right markets where they are needed, in the most efficient manner.
Many critics often see Bukalapak as being boxed in the Indonesian market alone. Would there be plans to go regional under your helm?
We are proud to be an Indonesian tech-commerce company. Indonesia is and always will be a key market for us and we are only beginning to tap the full potential of retail market in Indonesia, both with the online marketplace and the O2O initiative (bringing mom-and-pop kiosks online) that we started two years ago.
That being said, Bukalapak is rightly positioned to open international market access for Indonesian Micro, Small and Medium Enterprises (MSME). With millions of Indonesian diasporas all over the globe, the opportunity for Indonesian products is open.
We have started exploring this opportunity. With the Indonesian government’s support, Bukalapak has piloted BukaGlobal which enables Indonesian sellers to sell and ship their products in five markets: Singapore, Malaysia, Hong Kong, Brunei Darussalam and Taiwan. Hopefully we can help our sellers to sell more products to more markets in the future.
With your background in finance and planning, how would you increase the financial viability of Bukalapak? Also, would there be a possibility of going public?
It’s quite a simple math. To increase the financial viability, our task is to ensure that the growth in revenue and cash-in will need to be higher than the growth of cost and cash-out. We are on the right track and we’ll accelerate towards that direction.
I see IPO as only one way of fundraising. What matters most for us is to have a company that will be sustainable for the long-term. Bukalapak is focused in its mission to empower MSMEs with technology and will continue to make investments in areas to further that mission. But we will also continue improving the GRC (Governance, Risk and Compliance) practices and infrastructures, commensurate with Bukalapak’s size and to meet the expectation of our investors. This is what I call an “IPO-ready” state.
Co Founder Achmad Zaky will take on an advisory role. Just how much of an influence would he still have over the management of Bukalapak?
I think our arrangement is quite clear. I am CEO of Bukalapak and will be responsible for the management of this company. Zaky is our Advisor, and we will seek his advice when required. He is also one of our shareholders, so he and other shareholders can get updates and reports periodically in the shareholders meeting.
What brand new challenges would Bukalapak face this decade? Would it shake up the e-commerce ecosystem in Southeast Asia and be a dominating force?
This coming 10 years will tell.
Cover image sourced and modified from Berita Satu.
