Warung Pintar Targets Rural Area after Acquiring Bizzy Digital
A micro-retail startup, Warung Pintar, has acquired a logistics startup, Bizzy Digital. This is done to strengthen the position of corporations in Indonesia’s e-commerce business to business (B2B) market and to support expansion plans.
Bizzy Digital is an integrated B2B supply chain logistics and distribution service provider. After acquiring Bizzy, Warung Pintar is recorded as working with 600 brands and serving 230 thousand retailers in 65 cities.
“Through this acquisition, we hope to change the distribution approach based on digital platforms in the field, which currently relies heavily on promotions and discounts as a motor for customer acquisition,” said Co-founder and CEO of Warung Pintar Agung Bezharie in a press release, Wednesday (24/2 ).
He assessed that the promotional and discount approaches are not preferred by fast-moving consumer goods (FMCG) producers. “The presence of Bizzy Digital in the ecosystem enables us to guarantee distribution reliability, product availability, and fair prices by working side by side with brand distributors,” he said.
With this strategy, Warung Pintar plans to expand to city levels (tier two and three), or rural areas. In addition, the company claims to be able to strengthen its position in Indonesia’s B2B e-commerce market.
In 2020, B2B industry revenue has not reached half of Indonesia’s total e-commerce revenue. However, this sector is forecast to grow threefold. Meanwhile in India, the B2B industry contributes 93% to the overall e-commerce market. In China, the portion is 72%.
Number of Users Growing amid Pandemic
At the end of last year, Warung Pintar served more than 100 thousand shop owners in 35 cities and districts. The number of users grew 30 times. The startup also doubled its distribution facilities from five to 11 warehouses. Meanwhile, the partner’s daily income is claimed to increase by 20% -34%.
Warung Pintar is running various ways to grow in the midst of the corona pandemic. This startup avoids excessive marketing costs, provides each of the two new services and a partnership program with Decacorn. These three steps have boosted revenues by six times last year.
Now, Warung Pintar has acquired Bizzy Digital, which focuses on improving supply chain efficiency. Post-acquisition, Bizzy has maintained its brand and organizational structure. Bizzy will also provide access to the online retailer ecosystem. This approach is considered to be a solution to various problems faced by B2B e-commerce startups with FMCG companies and distributors.
“After we joined, none of the players in the industry were integrated from upstream to downstream like us. This acquisition allows us to offer brand and distributor strategies that are based on data, with added value,” said Bizzy Digital CEO Andrew Mawikere. Bizzy Digital currently serves more than 100 thousand retailers along with 45 distribution partners in 39 cities.
The Combination of the Two Companies Creating Efficiency
In addition, it has collaborated with more than 50 major FMCG brands and distributors. Co-founder and Managing Partner at East Ventures Willson Cuaca assessed the strong synergy and efficiency from the merger of the two companies.
Warung Pintar can focus on demand, while Bizzy Digital from the supply side. “By joining forces, they can serve both industries, consumers, retail, and brands in the most effective way. For us, this is 1 + 1 = 3,” said Willson.
Bizzy Digital is a startup that builds a platform on top of an established distribution company (near to profit) and a logistics company (which is now profitable). This digital unit raised US$ 9 million (around IDR 127 billion) and is close to getting a major investor for this funding round.
The road to fundraising is very difficult. Bizzy had to combine a startup team (relatively young, well-paid, and fashionable) with blue-collar workers who made up the bulk of the organization.