Indonesian unicorn teams up with Singapore logistics startup

Singapore

INDONESIAN unicorn Bukalapak is partnering Singapore startup Janio for cross-border logistics as it prepares to go global. The e-commerce player is also in talks with Singapore's Economic Development Board to potentially open an office in the country, co-founder Fajrin Rasyid told The Business Times.

Bukalapak launched BukaGlobal on Monday, allowing consumers from Singapore, Malaysia, Brunei, Hong Kong and Taiwan to buy products from merchants in Indonesia through the Bukalapak platform.

The company, which counts Singapore sovereign wealth fund GIC and Indonesian telecoms conglomerate Emtek among its backers, is hoping to capture a slice of the growing middle-class consumer population in South-east Asia. Its home market competitor and fellow unicorn Tokopedia has yet to expand out of Indonesia.

Mr Rasyid, who is president of Bukalapak, said BukaGlobal was also designed to address regional logistics challenges faced by Indonesian businesses. This includes the high costs of delivery and effort spent on dealing with customs.

To address this, Bukalapak is working with Janio for end-to-end logistics. Janio's platform allows merchants to select where they want to ship to; it then automatically configures the optimal combination of logistics service partners for the delivery, with real-time transportation information and technology for customs clearance.

Though Janio works on an asset-light model, the startup has a few first and last-mile delivery vans specifically for Bukalapak to "get the partnership off to a good start", the firm's chief marketing officer Nathaniel Yim told BT. The fleet will be enough to cover the initial expansion phase.

While Bukalapak currently has four million small and medium enterprises (SMEs) on its platform, not all will be able to sell through BukaGlobal. Merchants will be curated based on their geographical location and past performance.

Currently, only sellers in Jakarta and Tangerang are able to access BukaGlobal. The service will be opened to more sellers soon.

Mr Rasyid said that the five markets chosen for the first stage of expansion have a sizeable number of Indonesian residents and consumers familiar with Indonesian products. Product categories that are likely to be popular include food and local handicraft and apparel.

As it forges ahead with international expansion, Bukalapak is eyeing Singapore as a place to curate tech talent.

Mr Rasyid said: "There are a lot of talent who love the Indonesian market, but maybe prefer to work in Singapore. And we understand. So that's something that we want to cater to as well."

If the plan proceeds, Bukalapak is likely to hire "a few dozens" of employees, mostly senior tech specialists in the areas of data analytics, artificial intelligence and engineering.

In terms of operations, the company will focus on the five markets where BukaGlobal has just been rolled out. But Mr Rasyid reckons that the Middle East will be a good opportunity to tap, considering the sizeable Indonesian population there and the demand for halal food and Islamic fashion.

Founded in 2010, Bukalapak has since ventured into other business arms in Indonesia, including financial products and investment services. It has also gone into the offline business by supporting small kiosks or individuals (called warung in Indonesia) to resell products bought from Bukalapak, targeting buyers with limited internet access. There are currently more than 700,000 of such sellers with Bukalapak.

In January, it announced a raise of US$50 million in Series D funding from Mirae Asset-Naver Asia Growth Fund, a joint vehicle by Korean mutual fund Mirae Asset and Korean Internet firm Naver. Mr Rasyid said the company is in no hurry to raise more funds.