AIBP ASEAN B2B Growth
AIBP ASEAN B2B Growth
Bukalapak : Driving Growth and Financial Inclusion in Indonesia
In this episode, Pak Victor Lesmana, CEO BukaFinancial and commerce, Bukalapak, discusses the winning project from the AIBP Tech for ESG Awards. Bukalapak's winning project showcased their focus on “Empowering MSMEs with Inclusive Financial Infrastructure” through initiatives like Mitra Bukalapak and Kirim Uang.
Pak Victor also shares Bukalapak's journey from its early days to becoming a unicorn, highlighting key milestones and expansion into new business areas.
Bukalapak is often credited as the country's first listed technology unicorn and its IPO in August 2021 is still Indonesia's largest, raising some USD 1.5 billion at a valuation of USD 7.5 billion.
The AIBP ASEAN beach to growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. Topics discussed include business strategy, sales and marketing, enterprise technology and innovation. The AIBP ASEAN B2B growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. Topics discussed include business strategy, sales and marketing, enterprise technology and innovation.
YY - AIBP:Hello and welcome to the AIBP ASEAN B2B growth podcast, where we sit down with individuals responsible for driving growth of their business here in Southeast Asia Today, we are very happy to have welcome our guest from Indonesia, but Victor lasmana, the CEO of Buka financial and commerce. Bukalapak, for those who may not be familiar, BukaLapak is an Indonesian e-commerce company founded in 2010 as an online marketplace to facilitate the online commerce for the small and medium enterprises in Indonesia, the small and medium enterprises contribute two thirds of the country's GDP, and Bukalapak is often credited as the country's first listed technology unicorn and its IPO in August 2021 is still Indonesia's largest raising some us 1.5 billion at the valuation of us 7.5 billion. Since then, Bucha Laban has introduced several initiatives, including Mitra Bukalapak in order to drive further financial inclusion and empower more micro, small and medium sized enterprises. Pak Victor currently leads the various core divisions of Bukalapak, including marketplace, digital products, logistics and supply chain, payment, financial, technology and new business. I'm very proud to call Pak Victor a fellow alumnus, and without further ado, I'm handing this over to him to share more about himself and his journey with Bukalapak. Welcome Pak Victor.
Victor - Bukalapak:Thank you all right, and hello everyone. I'm Victor Lesmana. I'm honored to serve as director and also the ESG champion at PTBukalapak.com, PBK, or more commonly known as Bukalapak. At Bukalapak, we are the forefront of technological innovation, and we are driving change in Indonesia's dynamic business landscape, and we have an operated a diverse range of business segments. We started as an E commerce, but then we are actually expanded to other areas as well, similarly, integrating not just the E commerce with the online, offline market, merchant solutions and as well, cutting edge financial platform. So it's a pleasure to be here today.
YY - AIBP:Well, can you give us an overview of Bukalapak history, and perhaps some highlights in your journey in guiding Bukalapak from the pre unicorn days to Bukalapak at present
Victor - Bukalapak:So at Bukalapak, I'm helping the BukaFinancial and commerce team, and our mission is to drive financial inclusion by addressing the diverse financial needs of all market segments. We are the driving force behind Bukalapak financial service ecosystem, and we aim to fortify our infrastructure and solutions. All these involve forging strategy partnerships with trusted financial service providers across the country, and our approach aligns with the key approaches taken by Buka as an all commerce company dedicated to serving a wide spectrum of market demands through various verticals and specialized platforms. It's an exciting journey, and I'm privileged to be at the forefront of it.
YY - AIBP:Thank you so much. But Victor, we are also very excited to hear more about what initiatives you're driving at Bukalapak in further detail later. Well, you know you've seen Bukalapak grow up from its pre unicorn days to what it is right now, perhaps you can give us some highlights about this journey
Victor - Bukalapak:here, of course. So if you take a slow down memory lane with Bukalapak, it is in it quite the journey established in 2010 we kicked off as a modest e commerce platform with a simple goal, which is to provide a platform for small scale sellers and buyers to connect online. And it has been an incredible ride since then, fueled by innovation and a deep seated commitment to empowering SMEs through technology, Bucha has grown into one of Indonesia's leading technology companies, and over the years, we have expanded our horizon. We offer a wide range of services beyond traditional e commerce, with the presence in 28 provinces across Indonesia and partnership with over 300 local distributors, outreach knows no bounds, our Mitra Bukalapak has been instrumental in retaining our position as the HO market leader Indonesia, and like you mentioned earlier, to 2021, mark a monomial, my soul in our journey, because we took a leap of faith with our initial public offering, which went on to become the largest IPO in Indonesia Stock Exchange history, propelling us and to. The new economy main board, as well as a public relations company, we remain steadfast in our commitment to sustainable business practices.
YY - AIBP:Well, you've said it right there, right? It was the first unicorn, and it's still the largest recorded offering on the Indonesia Stock Exchange. You know, from your perspective, maybe you can share with our listeners, what does innovation mean to you? And how does a company like Bukalapak measure the success or failures of its innovation efforts?
Victor - Bukalapak:Indeed, we have heard innovation to be mentioned so many times, and in Bukalapak, innovation isn't just a buzzword, because it is actually ingrained in our DNA. Our journey began with a simple the author mission, which is to empower SMEs and make a positive impact in our community. In the ever evolving landscape of the technology sector, innovation is yet isn't just a choice, but it's a necessity. And for us, innovation is about solving real world problems and delivering tangible benefits to our stakeholders, especially for the MSMEs, whom we serve. We measure the success of our innovation effort, not just by short term gains, but by the long term impact we bring to the table. Innovation often involves taking risks and pushing boundaries, and yes, failures are part of the journey, we embrace them as learning opportunities, growing us to a course correct and grow stronger. Ultimately, our success is a measure solely by our bottom line, but also the communities that we empower. We are in this together with our stakeholders striving for sustainable growth and also mutual prosperity.
YY - AIBP:So I think you've got it right there, right? You know, sometimes success when you are listed company, they always talk about shareholder value, but it's great to know that for Bukalapak, but you also look at the community initiatives, and that's why you were one of the winners for our tech for ESG awards this year. You know, I'm very curious. The team has grown a lot. The initiatives that you have done has also expanded. What do you see as some of the main challenges with regards to Bukalapak growth and in the next couple of years, we've heard about like, the whole funding drying up? Are you? How are you prioritizing and allocating resources for continued innovation at the firm?
Victor - Bukalapak:Definitely, and 2023 it has proven to be a challenging year, not just for Bukalapak, but also to the broadaer tech landscape, and even to when we spoke to a lot of companies in Indonesia and the region, whether it's startups tech or even other sectors, they also feeling the same, the same challenges, and now, with a really focus on profitability, there are, of course, a lot of more, I will say, challenges that a lot of companies are facing. So we have implemented significant changes to enhance our operational efficiencies as well as to refine our marketing approach. Prudent cash management still remain a top priority alongside the regular evaluation of our financial performance, and this product measures set the stage for positive outcomes. Because it is not initiative that we took just in 2023 but it has been a journey even from several years ago, where we have been very prudent in our financial management, and where it has helped us to navigate through this turbulent year. Our latest financial statement for the third quarter in 2023 reflects substantial growth with a remarkable 29% year on year revenue growth, but also, notably, we achieve a commendable 71% improvement in adjusted EBITDA. We signal our commitment to sustainable growth. Our existing marketplace segment boosted a positive contribution margin, while our gaming division also shows significant growth. And additionally, our little strategy started to turn into a positive evident in recent months as well. At Bukalapak, we confront challenges head on by capitalizing on our unique offerings, placing utmost importance on customer satisfaction, investing strategically in technology, fostering key partnerships, and diligently adhering to regulatory regulatory standards. These multifaceted strategies are designed to not only drive sustainable growth, but also solidify our position in the fiercely competitive market landscape.
YY - AIBP:Or how, you know, Indonesia stability and Indonesia's focus has always about creating this digital economy and uplifting the Indonesian mass MSME, especially in part of in all of its policies, right? So I'm quite keen to see how Bukalapak is shaping its future together with that. Okay, sure. So Indonesia is a very big country, and it's very diverse. It has 1000s of islands with also. Different cultures, different level of economies, where, where there are certain places where the growth has been faster than the others, or also the level of, I will say, maturity and the financial inclusion is also different across the different areas. And one thing that Bukalapak find is that it is a huge opportunity, and we are blessed to have government that has been pretty stable. Indonesia is one of the largest democracy in the world, and since we started in 2010 we have gone through the journeys, and we are thankful for the multiple elections that we have gone through with peaceful, peaceful transitions, and we believe that the latest election will also give the with the peaceful transition as well. So we can focus on the future as well as how we can together build the country. So for us, it Indonesia is definitely our main market, especially with our DNA, to create a fair economy for all and Indonesia, where we started, we now we have about 5 million active media travel within our ecosystem, as well as millions of users, as Americans, that are actively transacting our platforms. We definitely still see they as our main consumers and our partners that we want to grow together at the same time, what we want to aim is that through the technological innovations that we create, as well as a lot of the learnings that we have Indonesia, we will be able to also bring it to the potential to other markets in the future, and by the same time, there are a lot of homework that needs to be done Indonesia. So we are still committed, and definitely we are still very bullish and optimistic about the potential of Indonesia in the the upcoming years. Thank you so much, Pak Victor. Now I know that expansion is definitely in your in the future for Bukalapak, expanding your services and perhaps offerings to the region also, it's very interesting, because this year, this this month, is the International Women's month, right? And I believe, like the women's empowerment is part of, like the initiatives that Bukalapak is also very passionate about. Can you share with us a little bit more about how you know Bukalapak is empowering women in really enabling this MSME vision, too?
Victor - Bukalapak:Sure. So social. The social aspect of Bucha ESD is revolved around the continuing uplifting of community economic welfare with an emphasis on empowering SMEs with technology and Fostering Connections with circular economy. And for Bukalapak, empowering SMEs to harness digital advancements will augment their expansion, sharpen their COVID age, and heighten their ability to with STEM challenges. So our initiatives to support SMEs in 2023 include the Bucha 10,000 blue one or 10,000 opportunities, which is a collaboration with non profit organizations where we donate laptops and offer training to MSM is run by women. We also initiated Buka scholarship, Kaka ASU program, which is like a foster which is where we provide Education Fund for Children of the Mitra Bukalapak. And we also organize a series of business training and competitions calledPerempuan Jagoan Pencari Cuan (PUJAAN) which is an initiative to empower and enhance the resilience of women, women like SMEs within Bukalapak ecosystem and winners of PUJAAN, who are selected based on their business innovation plans would receive cash prize to help them scale their business. And other initiatives for women include an initiative called Perempuan Jadi Pengusaha, which is a webinar series providing women with soft and practical business development skills. So the training was specially designed for our female Mitra and merchants of Bukalapak, as well as the wives of the Mitras and Bukalapak as well.
YY - AIBP:That's great to know. I think when there as initiatives to uplift women, more people can benefit, and we've seen that being replicated in many parts of the world, and I'm glad that Bukalapak is also doing this in Indonesia. Well, if you could highlight a key success story, perhaps from your experience in working with MSME, or individuals who have benefited from Bukalapak financial inclusion initiatives. What would that be?
Victor - Bukalapak:Sure. There are a lot definitely. But some of the key highlights that came to mind are this artist right, which is in the mid term Bukalapak especially. So a lot of automate trust. They have benefited from our Mitra Bukalapak app, and there's an app that allows them to sell a wider range of products and services, including financial ones. Because before Mitra Bukalapak, there were not many companies who like to serve the segment the War Room, especially because they probably think that there is not much things that can be gained from the Warungs, and they probably are looking more for more specific startup, specific segments and the like. But through this Mitra Bukalapak app, we have seen directly, a lot of impacts to the communities. Because now is that through the Mitra Bukalapak, it's not just giving them an opportunity to earn more, but also help to bridge the financial gap in the many communities that hinders them from accessing proper financial services. And that also includes to the community surrounding the Mitra Bukalapak, because most of the Mitra Bukalapak, they will be serving the customers who might be under banked or unbanked within the within the community, and for example, with one of the Mitra Bukalapak financial features, one of them is remittance, or kirim uang, where all the community members, including those the unbankable ones, they can easily access financial services from remittance, electricity bill payments, online shopping payment, paying taxes and many more. And one of the most notable stories is, I remember this one of this one of army trust, where she shared about her growth after joining with Mitra Bukalapak, which is Jumiati from Palembang, from South Sumatra. Jumiati runs a Warung situated in a secluded area next to the Musi river. And since using Mitra Bukalapak, Jumiati has not been just selling prepaid fund credits, but she also diversified her products and services, which include the kiribong products, as well as several other and she helps her customers, who are mostly business owners, to wire money to their family members outside the town. And because her warung is also close to the central market, the merchants often use her service to pay for fruits and vegetables that they are going to sell. For another interesting story comes from Hatno, owner in sidurio is Java. He used to sell furniture and part of equipment before deciding to establish a warung and sell virtual products and services due to high demand in his neighborhood, he quickly offered one another services at his war room and managed to build a strong customer base, and now his income has increased almost five times since then.
YY - AIBP:Those are very amazing stories. So you're seeing that not just do you empower it from the macro basis, but there are also personal stories of how business owners have diversified their business have grown their own income potential with Bukalapak help. Thank you very much Pak Victor for sharing that. Pak Victor, as you know, people always say that if you want to go fast, go alone, but if you want to go far, go together. And I think in terms of Bukalapak growth in the last 14 years, a lot of the work has been about building this ecosystem of partners that work together with Bukalapak. Can you share with us, perhaps some of these partnerships that has helped Bukalapak grow, and perhaps some of the future partnerships that you are looking at in order to fuel Bukalapak further growth in this area,
Victor - Bukalapak:Definitely, and Bukalapak is an open ecosystem. We always believe in the power of collaborations and partnerships. We have worked with a lot of partners throughout our journey, and that has that has helped us to be where we are right now. I'm giving probably several examples on the financial services because we have worked with a lot of partners, including, for example, Nana and then ovo, and then we recently, we also took a stake in our bank, which is another ecosystem play, because we believe that to be able to grow, we have to work with multiple partners who have strength in their areas. And if you want to do our everything ourselves alone, that probably will take a longer time with a so much higher risk of failures, and let's say, with our partnership with our bank, we see that as a very our it's our strong collaboration between the multiple ecosystem, because our bank has its own large user base through the ecosystem that it has with the. With, for example, with the CP Corp, as well as several other shareholders as or ecosystem partners that you that forms the part of this Aloe banks ecosystem. And we believe that there will be a lot of cross pollination and synergies between the ecosystem of Bukalapak and the ecosystem of our bank, because there will be cross of the user base, and then services that for allobam itself might not be able to provide, but Bukalapak can provide. And similarly, there are financial services that we will not be able to provide ourselves, then that we can leverage the offerings that our bank has, and of course, there are many more definitely in every of our businesses. We try not to do it ourselves, because we understand that for every single business, there will be someone who might have done it before, who might be far more advanced in their journey in that area. And one thing that we believe is that the Board of collaboration will bring us far, and also bring the growth for everybody that's part of the ecosystem.
YY - AIBP:Especially with regards to synergy that you spoke about, right? Why reinvent the wheel and something works and you can scale a lot faster, capitalizing on each other's strengths with that. But Victor, we are coming to the end of today's podcast, but I'm very curious. You know, looking forward, what are some of the areas that you're very excited about, and where do you see the largest growth and opportunities that Bukalapak is positioning itself to capitalize on.
Victor - Bukalapak:Personally, I'm very excited about growth and innovation Indonesia, the Asia as well as the ASEAN region, and globally, if we look at Indonesia sectors such as sustainable agriculture, renewable energy and digital infrastructure, it offer opportunities for economic expansion and technological progress. Of course, this is my personal opinion. Is not necessarily saying Bukalapak position about this, but it's these are the areas that we see as future growth in the market, right? Well, in the ASEAN region, I'm interested in growing e- commerce and fintech sectors, especially with the increased internet use in the region, while also the increased collaboration and trade within ASEAN, it also helps to boost economic integration. While globally, there are a lot of trends with trends that are happening. I'm very enthusiastic about technology advancements like AI, Blockchain, clean energy and all those I believe, can address global challenges and promote sustainability. Collaboration within Indonesia and all the other countries definitely will be able to drive innovation worldwide. So overall, I'm very optimistic about the future of Indonesia ASEAN and as a whole the world, because there are so many more innovations that are happening, as well as a lot of focus towards more sustainable development.
YY - AIBP:Thank you very much. But Victor, with that, we've come to the end of the AIBP ASEAN B2BR growth podcast, and thank you very much, PakVictor for your time. Pak Victor also serves as Advisory Board member to our AIBP board, and he contributes much of his insights to our activities in Indonesia and in the region. Thank you very much, Pak Victor for your time today.
Victor - Bukalapak:Thank you, and thank you for the opportunity as well.
AIBP Intro:We hope you've enjoyed the episode. For more information about business growth in the ASEAN region. Please visit our website, www.IoTbusiness-platform.com.