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Let’s Work Together

Powering Indonesia’s macroeconomy with tech for micro-business

Published on April 18, 2023

In a recent MindShare episode of Indonesia Digital Discussion, host Leighton Cosseboom of AC Ventures caught up with Ula Founder and CEO Nipun Mehra and Bukalapak President Teddy Oetomo. The discussion centered around their companies’ efforts to promote financial inclusion and sustainable economic development in Indonesia.

Both Ula and Bukalapak have been serving micro, small, and medium enterprises (MSMEs) in Indonesia, which make up 99% of the country’s total business activities and contribute significantly to employment, economic growth, and poverty reduction.

Ula, a wholesale e-commerce marketplace, provides working capital and inventory sourcing for MSMEs across the archipelago. The startup has raised over US$117.5 million from blue-chip tech investors like Tencent, B Capital, Bezos Expeditions, AC Ventures, and many others.

Meanwhile, Bukalapak is a publicly traded e-commerce unicorn in Indonesia and one of the nation’s pioneers of online retail. A significant portion of its business now revolves around its Mitra Bukalapal unit, which aims to digitize MSMEs throughout the country.

During the chat, Nipun and Teddy discussed their companies’ approaches to serving MSMEs, including the need to focus on smaller stores rather than larger ones, as larger retailers are already well-served by existing channels. Smaller stores like roadside warungs, outdoor food stalls, and family-owned convenience shops, on the other hand, often lack access to credit, logistics, and other essential resources needed for growth and expansion, making them almost impossible to serve by large wholesalers and distributors.

Both Ula and Bukalapak have been using tech to overcome these challenges. Ula has developed a proprietary data system that helps identify good customers and extends payment terms to them. Mitra Bukalapak, on the other hand, has been running multiple initiatives such as helping MSMEs extend store credit to people in their communities and allowing them to make in-app gaming purchases with physical cash.

Both companies have also been using interesting delivery models to optimize logistics and reduce costs. Ula has implemented pickup points to enable customers to collect their orders from nearby locations, rather than having to travel long distances to purchase inventory.

In the episode, Nipun and Teddy demonstrate how tech can promote financial inclusion and sustainable economic development in emerging markets like Indonesia. By focusing on MSMEs and using novel delivery models and payment terms, they support socioeconomic progress and resilience at the grassroots level.

Get the full episode for free on Spotify, Apple, and Google.

See also: How Indonesia’s fintech leaders are thinking about SNAP
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