Will Bukalapak make a profit this year?

Written by Kapronasia || November 16 2023

Not all Southeast Asian platform companies are created equal, nor do they perform equally. Unlike some of its counterparts, Bukalapak has never swung for the fences. Rather, it has focused on its substantial home market of Indonesia and building a digital services ecosystem for Southeast Asia’s largest economy that increasingly features more financial products. The strategy appears to be bearing fruit, and Bukalapak has recorded seven straight quarters of adjusted EBITDA profitability.

In the third quarter, Bukalapak’s revenue rose 29% on an annual basis to 1.16 trillion rupiah (US$72.6 million) which its president Teddy Oetomo says puts the company “on target” to reach profitability by the end of 2023 on an adjusted EBITDA basis. “Once that is achieved, we can focus on consistently growing profitability into 2024 and 2025,” Oetomo recently said.

Revenue from Mitra Bukalapak, Bukalapak’s crucial online-to-offline segment, went up 16% in the quarter. This is the part of the company’s business that differentiates it from Sea Group, GoTo and Grab. Bukalapak has the most mature e-commerce business of any of these platform companies, as it was founded back in 2010, and it has gained significant experience with merchants. As such, the transition to offline sales is a natural one. Bukalapak is well suited to help the owners of small shops known as warung digitalize their operations.

According to venture capital firm Flourish Venture, traditional warung represent 70% of sales in Indonesia’s US$257 billion grocery market, but the roadside kiosk operators are facing increasingly tough competition from modern, larger retailers. With better digital connectivity, warung owners can better compete against the big players, Bukalapak reckons.

In a recent news release, Bukalapak said that with its Mitra Bukalapak app, warung owners “transform into modern retailers offering 42+ virtual products, including digital and financial services. This enhances revenue streams from a diversified product range and promotes financial inclusion.”

Meanwhile, Bukalapak might have a new business opportunity in the months ahead following Indonesia’s decision to ban online shopping on social media platforms. TikTok, which doesn’t want to be shut out of Southeast Asia’s largest consumer market (it was 125 million users in Indonesia), has been holding talks with Indonesian e-commerce companies about possible partnerships, according to Teten Masduki, minister for small-medium enterprises (SMEs). TikTok has spoken with five companies including GoTo’s e-commerce unit Tokopedia, Bukalapak and Blibli, he said on Nov. 13.

It is unclear what, if anything, will come out of the talks, but Bukalapak trails Tokopedia and Shopee in Indonesia’s e-commerce market and might stand to gain the most from a tie-up with TikTok.