KitaBeli brings e-commerce to small towns in Indonesia – TechCrunch


Complicated supply chains mean that consumers in Indonesian Tier 1 and Tier 2 cities often end up paying more for goods than their peers in larger cities, such as 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, along with participation from returning investors AC Ventures and GoVentures, and new backer InnoVen Capital.

TechCrunch covered KitaBeli’s latest raise, a $10 million Series A, in March 2021.

The funding will be used to expand to more small towns in Indonesia and add new product categories like beauty, personal care, and mother and baby products.

The startup claims to have grown more than 10x in six months and claims to be the largest direct-to-consumer social commerce platform in Indonesia. It now has more than 400 employees.

According to KitaBeli, Indonesia’s Tier 2 and Tier 3 cities represent a $100 billion market, with 200 million consumers contributing more than 50% of Indonesia’s gross domestic product. But they face more difficulty ordering online than their peers in Tier 1 cities like Jakarta. For example, long delivery times, higher prices due to complicated supply chains, and trust issues because customers don’t know who is selling a product.

To address this, KitaBeli has opened a warehouse in each city where it operates, enabling same-day and next-day deliveries. It sources its supplies directly from brands and principals, which allows savings to be made which can then be passed on to their customers. Finally, it addresses the issue of trust through the social commerce model, in which users bring together people from their social networks for group purchases.

Co-founder and CEO Prateek Chaturvedi told TechCrunch that when he left India (where his previous startup GetFocus was acquired by Mokapos), he was struck by the differences and similarities between e-commerce markets. Indian and Indonesian. For example, e-commerce in Tier 2 cities was underdeveloped compared to Tier 1 cities.

“Digging deeper, we found that users in these small towns are buying online for the first time, and they are facing trust issues with these faceless services and need help and guidance on using the app,” he said. As a result, KitaBeli experimented with social features in its app, such as having agents, called Mitras, in each neighborhood, referrals, and group purchases.

Fast-moving consumer goods were chosen as KitaBeli’s first category because they are frequently purchased. “Since we are direct to consumers, we want users to make a habit of buying with us,” Chaturvedi said.

To buy on KitaBeli, users open the app, place an order, and then receive incentives to share those purchases with their friends. KitaBeli shoppers use it to buy basic goods like rice, oil, sugar, milk and personal care items. Chaturvedi said that each user usually spends $5-10 per order, and each group is usually 5-25 people.

KitaBeli is able to expand its distribution network by opening small warehouses in each city instead of having large distribution centers. “Since we are primarily focused on FMCG, we are able to transform our inventory very quickly,” Chaturvedi said. “Our system works to minimize inventory days for each item. By reducing the amount of stock in the warehouse, we have also been able to reduce the space required, which lowers costs.”

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