Startups Start to Find New Strategies for Their Business
The harsh reality slowly approached startup companies. Several large startups around the world have to experience business downsizing among the thriving digital economy. Indonesian startups are no exception. They tend to begin implementing new strategies to survive on the market.
Lately, Bukalapak, one of the unicorns in Indonesia, has terminated employee’s employment. ‘Internal corporate structuring’ was claimed to be the main reason behind the business strategy. The Chief Strategy Officer of Bukalapak, Teddy Oetomo, said that the layoffs were carried out to less than 100 employees.
The reduction of employees is carried out so that the company’s business can continue and is capable to reach Break-Even Point (BEP). Bukalapak is ambitious to become the first startup to reach the BEP of investment after repeatedly getting millions of US dollars from investors.
“The termination of employment is only one of the various sustainable strategies taken by Bukalapak. The other steps are system upgrading, revamping standard operating procedures, and many more. The target is the sustainability of the business with BEP and making a profit,” Teddy explained.
Startups’ Strategy to Sustain Their Company’s Business
Data from iPrice show that the number of Bukalapak employees per quarter II of 2019 reached 2,696 people. It shows an increase of almost double compared to the same period in the previous year which is only 1,500 people. Bukalapak also became the fourth largest e-commerce company in Indonesia.
They came in fourth place after Tokopedia with 3,144 employees, Shopee with 3,107 employees, and Mapemall with 2,933 employees. A range of internal improvement strategies was taking so that the company doesn’t need to conduct fundraising excessively. Thus, they can show the monetization business.
According to Teddy, Bukalapak’s transaction value is reaching USD5 billion per year. He said that it is the best time for the company to prove itself to be a valid company that is capable of doing business monetization and become the first startup to do so.
Teddy also claims that Bukalapak’s first-half gross profit in 2019 has tripled compared to last year. The company has also halved losses on earnings before taxes, interest, depreciation, and amortization in the last eight months. Meanwhile, Bukalapak’s financial performance was found to be slightly restrained.
Financial Performance of Bukalapak and Its New Strategy
Considering the search in the financial statement of PT Elang Mahkota Teknologi Tbk (EMTK), the financial performance of the company was restrained in the first six months of 2019. Revenue fell 41.28% to IDR 69.77 billion compared to the same period in 2019 which reached IDR 119.05 billion.
Then, the cost of revenue jumped by nearly 1000% from IDR 3.84 billion to IDR 37.73 billion in June 2019. Operating debt jumped from IDR 56.8 billion in the first semester of 2018 to IDR 84.31 billion in June 2019. Meanwhile, trade receivables were reduced by IDR 15.27 billion.
For this reason, Bukalapak is trying to explore any potential revenue by reducing various “money burning” programs which are inefficient and ineffective. It includes decreasing promotion programs that are not on target. However, Teddy was reluctant to open up about how much funds used for Bukalapak’s various promotions.