With Large-Scale Social Restrictions (PSBB) appeal, several startups have begun to adapt to changes in consumer behavior. Some have to close the service and some are forced to develop new features to adjust to consumer needs.
Bizzy Group, engaged in the logistics (Bizzy Logistics) and distribution (Bizzy Distribution), is also affected by this pandemic situation. This particularly affects the distribution business which is the main pillar of Bizzy’s overall business.
Bizzy Group’s CEO Andrew Mawikere said, stores outside the area currently don’t accept stock orders from salesmen. It is a good opportunity for Tokosmart because the shop owner has switched into application to order inventories. Andrew revealed that Tokosmart’s basket size increased from Rp2 million to Rp3 million from this situation.
Since January 2019, Tokosmart has launched to support the digitalization of micro, small and medium enterprises (MSMEs). This application makes it easy and increases the efficiency of store owners to place orders, receive inventory, and payment process. Recently, Andrew said Tokosmart has acquired 54,600 stores and more than 27,000 distribution companies in Indonesia.
“The current situation makes it impossible for us to meet with principals, this disrupts the effectiveness of our business development activities. However, this encourages new opportunities because consumers still need to buy necessities,” he told DailySocial.
In order to facilitate Tokosmart service effectiveness, his team has developed a new beta version that was launched last week, namely Tokosmart Agent. The service is similar to Tokosmart, it’s just that users and selling prices are different.
Meanwhile, Tokosmart Agent directly targets end-user and community leader segments, such as RT or RW leaders in the local area. They can order large quantities of supplies to be distributed to residents in their homes.
“In terms of impact, our [business] platform is quite minimal with this change in behavior, even though the distribution business is negative. It means the offline distribution business shifts to online. The overall distribution is down by 20 percent, but overall GMV is increasing. The decline revenue was blocked by the shifting [distribution companies] that use our platform,” he explained.
Bizzy’s commitment to enter the logistics and distribution sphere, as well as targeting MSMEs, has begun to be seen with efforts to strengthen the digital supply chain ecosystem. After Tokosmart, Bizzy who is now a holding company also launched the Truckway, Bizzy Field Force, and Smart Warehouse applications.
All of these services are built to optimize the operational performance of users in a supply chain, such as distributors, grocery stores, owners and truck drivers.
No longer engaged in the e-procurement sector
Furthermore, Andrew gave a signal that the company will not resume B2B marketplace business. In fact, previously the business that provided e-procurement was targeted to reopen in the fourth quarter of 2020.
In fact, Bizzy decided to close the B2B marketplace service since January. At that time, the company said the closure was only for the time being.
“We are no longer e-procurement service. We don’t plan to open e-procurement anymore, and we don’t know when,” Andrew said.
B2B Marketplace is Bizzy’s first business that was also a pioneer since 2015. Then since January 2019, Bizzy expanded its business scope to SMEs through the launch of Tokosmart. Both the B2B marketplace and Tokosmart have the same procurement activity. It’s just that the market segment and nature of the procurement are different.
B2B Marketplace is for large-scale corporate segments where the products will be consumed by themselves. Meanwhile, Tokosmart serves the purchase of stock inventory which will be distributed back to the grocery stores in the market.
Andrew said, there are several things that create the decision to quit the B2B marketplace. First, procurement activities basically consist of a long series of processes. In other words, he sees that large-scale corporate consumers have a long sell cycle process as well.
“There are many stakeholders involved in decision making. For example, the administration side, it is necessary to submit POs to finance. Because there are many stakeholders, it took a long sell cycle process,” he said.
In addition, he also assessed that the corporate segment in Indonesia is yet to fully adapted to digital because its infrastructure is not ready. The simplest example is the administrative activity that wants to be digitally finally not achieved because there are still many companies that use paper.
It answers that B2B marketplace business people are faced with the same challenges. Market awareness of B2B marketplace services is still low given that companies are not yet aware of the importance of digitizing business processes. This can also mean that there is no full commitment from C-Levels.
On the other hand, the B2B marketplace is considered promising because its business model will be able to guarantee measurable revenue and profit growth in the next 1-2 years.
In addition, the B2B marketplace business is more efficient because businesses do not need to “burn money” to acquire a customer. Unlike the retail segment, B2B’s business nature does not depend on strong competitive discounts or price promos, but on the rationality of needs.
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Original article is in Indonesian, translated by Kristin Siagian