Complex supply chains mean that consumers in Indonesia’s Tier 1 and Tier 2 cities typically pay more for goods than their peers in large cities, like Jakarta. KitaBeli is on a mission to change that, with its own distribution network and direct-to-consumer social commerce app. Today, the startup announced that it has raised $20 million in new funding led by Glade Brook Capital Partners, with participation from returning investors AC Ventures and GoVentures, and backer The new sponsor is InnoVen Capital.
TechCrunch covered KitaBeli’s last pay raise, Series A worth $10 millionin March 2021.
The funding will be used to expand into more smaller cities in Indonesia, while adding new product categories such as beauty, personal care and mother and baby products.
The startup says it has grown more than 10 times in six months and claims to be the largest direct-to-consumer social commerce platform in Indonesia. It currently has more than 400 employees.
KitaBeli said Indonesia’s Tier 2 and Tier 3 cities make up a $100 billion market, with 200 million consumers, contributing more than 50% of Indonesia’s gross domestic product. But they face more challenges when ordering online than their peers in Tier 1 cities like Jakarta. For example, long delivery times, higher prices because of complex supply chains, and trust issues because customers don’t know who is selling the product.
To solve these problems, KitaBeli opened a warehouse in every city in which the company operates, allowing same-day and next-day deliveries. It procures products directly from brands and agency companies, resulting in savings that can be passed on to their customers. Ultimately, it addresses the issue of trust through a social commerce model, in which users gather people from their social networks to make group purchases.
Co-founder and CEO Prateek Chaturvedi told TechCrunch that when he moved from India (where his previous startup GetFocus was acquired by Mokapos), he was struck by the difference and similarity between the two. between the Indian and Indonesian e-commerce markets. For example, e-commerce in Tier 2 cities is less developed than in Tier 1 cities.
“When we dug deeper, we found that users in these smaller towns were buying online for the first time and they faced trust issues with these intangible services and needed help. help as well as instructions on how to use the app,” he said. As a result, KitaBeli tested social features in its app, like having agents, called Mitras, in each neighborhood, referrals, and group purchases.
FMCG was chosen as the first category of KitaBeli because they are frequently purchased. “Because we are consumer-oriented, we want users to build a buying habit with us,” says Chaturvedi.
To purchase on KitaBeli, users open the app, place an order, and then receive incentives for sharing these purchases with their friends. KitaBeli shoppers use it to buy staples like rice, oil, sugar, dairy, and personal care items. Chaturvedi says each user typically spends between $5 and $10 per order, and each group typically consists of five to 25 people.
KitaBeli can expand its distribution network by opening small warehouses in each city instead of having large distribution centers. “Since we focus mainly on FMCG, we can sort our inventory very quickly,” says Chaturvedi. “Our system works to minimize inventory days for each item. By reducing inventory, we are also able to reduce the space required, which helps reduce costs. “