Link: Indonesian e-commerce pioneer Bukalapak will stop sales of physical goods to focus on virtual goods like mobile credits, amid competition from Shopee and others (Yuan Gao/Bloomberg)

Indonesian e-commerce platform Bukalapak will halt sales of physical goods amid fierce competition from giants like TikTok Shop and Shopee. The company aims to shift its focus towards virtual products such as mobile credits and electricity tokens.

Bukalapak's decision comes as it struggles to retain market share in Indonesia, a nation with a population of 280 million. Since its IPO in 2021, the company has seen its stock plummet by 86%.

Industry analysts view this shift as a drastic measure rather than a strategic choice. "It's a cry for help," stated Muhammad Farras Farhan, an analyst at Samuel Sekuritas in Jakarta.

The policy change will take effect on February 9, with any unprocessed orders for physical products to be canceled by early March. This marks a significant pivot in Bukalapak’s business strategy.

The entry of ByteDance, via its acquisition of Tokopedia and leveraging its platform TikTok, has significantly altered the competitive landscape in Indonesian e-commerce. Bukalapak’s major investors include Singapore’s GIC Pte and Archipelago Investment Pte.

Bukalapak’s market cap now stands at about $750 million, sharply down from its valuation post-IPO. Despite these challenges, the company is working to find its niche by focusing intensively on virtual goods sales. #

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