INDONESIAN e-commerce pioneer Bukalapak.com will stop selling physical goods, underscoring the cut-throat competition in a market where the likes of ByteDance’s TikTok Shop and Sea’s Shopee are vying for users.
Bukalapak will focus on sales of virtual products such as mobile credits and electricity tokens, it said. Buyers will not be able to place orders for physical goods after Feb 9 and purchases that have not been processed by early March will be cancelled.
The company has fallen victim to an intense fight for customers in the country of about 280 million people, seen as an attractive market by its bigger international rivals.
Since Bukalapak sold shares in 2021 in Indonesia’s biggest initial public offering (IPO) at the time, competitors such as Shopee, TikTok and Alibaba Group Holding’s Lazada have intensified their push in South-east Asia’s largest economy.
Shares of Bukalapak fell as much as 7.4 per cent in Jakarta, before paring losses. They have declined 86 per cent since its IPO, leaving it with a market capitalisation of about US$750 million. In the third quarter through September, its revenue declined 15 per cent, according to data compiled by Bloomberg.
Chinese giant ByteDance shook up the Indonesian e-commerce market a year ago by acquiring control of local online retailer Tokopedia. The Chinese company has ridden the success of its social media platform TikTok to become a major player in e-commerce too.
Bukalapak’s largest backers have included Singapore’s GIC and Archipelago Investment. BLOOMBERG
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