Forward Momentum
Forbes Indonesia|September 2021
Bukalapak’s CEO Rachmat Kaimuddin must battle big rivals and the pandemic for Indonesia’s e-commerce market—with help from a historic IPO.
Zinnia Lee

Indonesian e-commerce giant Bukalapak made history on Aug. 6 as the first tech unicorn to list on the local stock market, and also has the largest-ever IPO on the exchange, raising $1.5 billion. The company's market value topped $7.6 billion within the first hour of trading as shares surged as much as 25% from its offering price of 850 rupiahs (6 cents). The company is headed by Rachmat Kaimuddin, whose promotion to CEO of Bukalapak early last year came as a surprise to many—including himself. The former financier was chosen to staunch the flow of red ink and put the 11-year-old firm on a path to profitability. His actions in the next few years could well determine the company’s ultimate survival. “How [Bukalapak] will perform in the future is something that is still quite ambiguous at the moment,” says Euromonitor senior research analyst Deepika Chandrasekar, based in Singapore.

It’s a big job to revive Bukalapak’s flagging online presence. Bukalapak is in distant third place against two very big rivals—market leader GoTo's Tokopedia and Singapore-based Sea Ltd.'s Shopee. GoTo is reportedly valued at about $30 billion and Sea at over $100 billion. In the past two years, it has been losing ground to both in terms of monthly web visits—with their sites getting well over 120 million visits versus Bukalapak’s 34 million in the first quarter, according to market researcher iPrice. It will be a major challenge to claw market share from those two giants. “The e-commerce war is very intense,” says Alvin Sariaatmadja, president director of Indonesian media group Emtek, the largest corporate shareholder of Bukalapak.

The IPO will bolster Bukalapak’s war chest as it battles for a bigger share of Indonesia’s rapidly growing internet economy. The company intends to use the funds to expand nationwide, especially into smaller cities where competition from its two big rivals is less intense. Bukalapak says it now has 105 million registered users, 70% of which come from outside Indonesia’s largest cities. The stakes are high: Indonesia’s e-commerce market grew 54% in 2020, reaching $32 billion in gross merchandise value (GMV), according to a joint report by Google, Temasek and consultancy Bain. And the same report projects that Indonesia’s GMV will rise to $83 billion in 2025.

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