Warungs, or informal retailers, a cornerstone of the Indonesian economy, have long been overlooked and underserved. However, in the past five years, Mitra Bukalapak has equipped these small, traditional stores with the latest technologies and aim to modernise these businesses that had long been reliant on old-school methods of procurement, stock management, and accounting.
Since its inception, Mitra Bukalapak, the online-to-offline (O2O) arm of ecommerce firm Bukalapak, has experienced tremendous growth. The number of its users has skyrocketed from 3.4 million in 2019 to 15.2 million in 2022, attesting to the platform’s lucrative features designed for its partners or “Mitras”.
What is O2O?
O2O refers to a business model that brings together online and offline channels to provide a seamless customer experience. In Indonesia, O2O typically involves using digital platforms to connect customers with offline services or products, such as ordering food online for delivery or booking a ride-hailing service through a mobile app. O2O has gained popularity in Indonesia due to the high number of mobile phone users and the growing demand for convenience and efficiency.
According to Nielsen’s 2022 survey, Mitra Bukalapak currently commands the leading market share in Indonesia’s O2O platform, with 56% of warungs competing for O2O business using the Mitra Bukalapak app. This figure demonstrates Mitra Bukalapak’s position as the largest O2O player in Indonesia.
Mitra Bukalapak’s features, including money transfer and prepaid electricity bills, have proved especially beneficial to warungs. Its platform empowers warungs and transform them into logistics and financial agents with access to over 42 virtual products. Mitras are now able to provide their neighbourhoods with a range of essential services, including money transfers and digital transactions.
Just 55 per cent of Indonesia’s population is connected to the Internet, and about 20 per cent of Indonesians regularly shop online. Indonesia accounts for about 40 per cent of the population in Southeast Asia. According to Statista, as of January 2022, Indonesia had the fourth-highest number of Facebook users worldwide, with over 130 million users, and the fifth-highest number of Twitter users globally, with over 59 million users.
According to a report by Google, Temasek, and Bain & Company, Indonesia’s internet economy is expected to reach $124 billion by 2025, driven by factors such as increasing smartphone penetration, rising consumer spending, and growing e-commerce adoption.