Blibli's revenue surges, but profitability remains elusive

In The Checkout this week, we analyze Blibli's FY 2022 earnings and discuss Bukalapak's acquisition of iPrice. [Read from your browser]( The Checkout 🛒 --------------------------------------------------------------- Welcome to The Checkout! Delivered every fortnight, this free newsletter breaks down the biggest stories and trends in ecommerce. You can find past issues [here]( or [sign up here]( to receive future newsletters. Also, If you’re not a subscriber, get access by [registering here](. Written by Jofie Yordan Journalist Hello {NAME} If you live in Jakarta or have been there in the past year, you may have noticed how Blibli has put up stores that sell various smartphone brands and accessories in several malls across the city. The company aggressively expanded its offline presence in 2022, but JD.com's withdrawal from Indonesia could provide more momentum for Blibli to deepen its focus on this market. But despite this expansion, Blibli's financials were still in the red in 2022. Its loss from operations, for instance, widened by 33%. In this week's Big Story, I delve into the company's financials during that period. There are several highlights from Blibli’s earnings report, such as higher operating expenses and a 23% drop in the company's total assets. The company also paid off its debts to banks and also sold all of its shares in GoTo. At the same time, Blibli posted a 72% increase in net revenue, mostly due to its online retail presence and Tiket.com, its travel-booking subsidiary. Another Indonesian ecommerce player also seems to be targeting the electronics market. Bukalapak seems intent on strengthening its used-smartphone venture with its recent acquisition of iPrice, the Malaysia-based price comparison firm. In this week's Hot Take, I look into the deal and how Bukalapak has quietly established a secondhand smartphone business through a platform called Goats. -- Jofie  --------------------------------------------------------------- THE BIG STORY [Blibli posts 72% revenue jump in 2022 but remains in the red]( The Indonesian ecommerce firm also saw a 23% drop in total assets after paying off its debts to banks and selling all of its GoTo shares.  ---------------------------------------------------------------  THE HOT TAKE Making sense of why Bukalapak acquired iPrice Here’s what happened: - The Indonesian ecommerce major has bought a [majority stake]( in iPrice Group, a price comparison platform based in Malaysia. - Bukalapak said the move is part of its strategy to focus on niche marketplaces and to accelerate its growth. - According to iPrice, the partnership would help it reach more consumers and offer more deals and discounts across new categories and regions. Here’s our take: While ecommerce market leaders compete fiercely in various sectors in Indonesia, players like Bukalapak and Blibli are trying to find their own consumer niches. Bukalapak, for example, has been growing its Mitra business, which focuses on digitalizing warungs or mom and pop shops, over the past few years. Now, it is also betting on an electronic products marketplace. An [information disclosure]( stated that Bukalapak's acquisition of iPrice was carried out through Recommerce Internasional Indonesia (RII), a subsidiary that was established in February 2022. As it turns out, RII operates an online marketplace platform for pre-owned smartphones under the [Goats]( brand. The platform sells used Apple, Samsung, Oppo, Vivo, and Xiaomi phones as well as smartwatches, tablets, laptops, and other devices. Goats seems to be a "silent" project for Bukalapak, as it has never discussed this business publicly. Teddy Oetomo, Bukalapak’s president, stated that one of the company's goals in acquiring iPrice was to “strengthen RII's business in electronic goods sales (under the Goats brand).” He believes that iPrice could bring in more benefits and boost the value of RII’s platform. “IPrice has a proven capability in providing product and price comparisons as well as discounts and vouchers, so the consumers may get the best offers,” said Oetomo. After the acquisition, the companies could explore various forms of integration. Bukalapak could add iPrice’s price comparison feature to the Goats platform. Conversely, price information for devices on iPrice could provide purchase links that lead directly to Goats. This move also means that Bukalapak will go head-to-head with Blibli, which also shored up its electronics business lately. That said, Blibli sells new devices instead of secondhand items like Goats does. Apart from conventional sellers in malls, other competitors in the pre-owned smartphone industry include marketplace platforms like Jagofon and Laku6. Jagofon recently [raised seed funding]( from Orbit Startups, the accelerator program of VC firm SOSV. Meanwhile, Laku6 was [acquired]( by classifieds giant Carousell in July 2022. Secondhand smartphones are popular with consumers in Indonesia. This is reflected in data from [Ken Research]( which shows that the market for used smartphones in the country went up at a compound annual growth rate of 8% from 2016 to 2021. It is also expected to be valued at US$659 million by 2026. However, the Indonesian smartphone market saw a decline in 2022. According to [research]( by International Data Corporation (IDC), total smartphone shipments in the country in 2022 fell by 14.3% from the previous year. If the prices of new smartphones - especially for Apple products - go up, then used devices may become more attractive to consumers. This is where iPrice may fit into Bukalapak’s plans to develop its electronics marketplace. Its price comparison and discount features could help Bukalapak improve its services and lure more consumers. Even so, price is not the only important factor in selling electronic products. Bukalapak should also take after-sales service into account in order to retain customers and to protect the brand image of Goats. With the right execution, the market for pre-owned smartphones will give Bukalapak a fresh stream of income. -- Jofie  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ [Carousell taps former GudangAda CFO for executive team]( The Singapore-based classifieds player has appointed JJ Ang as its new CFO. He held the same role at Indonesia’s GudangAda and Vietnam’s Sendo. 2️⃣ [Mitsui bets $25m in Indian construction marketplace]( JSW One Platforms will use the fresh funds to expand to more locations in India and invest in its credit and logistics capabilities. 3️⃣ [Fresh Factory bags over $4m to tackle cold chain fulfillment]( The Indonesia-based firm’s network has grown to over 40 fulfillment centers across 22 cities in Indonesia. 4️⃣ [JD.com to pursue HK listings for industrial, property units]( The Chinese ecommerce firm seeks to increase operational and financial transparency as well as help investors assess the individual performance of both subsidiaries. 5️⃣ [Indonesia’s Shox Rumahan shuts down, terminates all staff]( The social commerce company cited "financial losses" as the reason behind the closure. That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? 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