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Hello reader,
It’s that time of year when a lot of us are discovering how hard it is to build new habits.
I’m trying to exercise more as one of my New Year’s resolutions, and I know it will be an uphill battle as life just gets in the way, even if you think you’ve got into that healthy new routine.
Back in the summer of 2021 when Hanoi was about to enter its first serious Covid lockdown, I bought an exercise bike, as going outside was out of the question. For weeks, I rode that thing daily and thought it was just part of my life.
Not so, however, as once the lockdown ended, the bike lost all appeal and started collecting dust.
Ula and Udaan looked to have cracked the code to FMCG-focused B2B ecommerce during the pandemic, when retailers needed new methods to get their products. But now, they’re discovering how hard it is for any person or business to build and maintain new habits.
Today we look at:
- Ula and Udaan may need a U-turn
- Line-based martech startup Micoworks raises funding from Vertex
- Other newsy highlights such as funding for Indonesian EV battery startup Swap Energy and Baidu scrapping plans to acquire Joyy’s livestreaming business.
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B2B ecommerce’s bumpy road ahead
Image credit: Timmy Loen
The outlook for B2B ecommerce appears to be gloomy in Indonesia and India, with high-profile players in the space announcing layoffs recently.
Indonesia’s Ula announced job cuts in October last year and retreated from its inventory-led FMCG distribution business, while India-based Udaan let go of over 100 employees last month, despite having scored US$340 million in funding days before.
- Covid booster: With traditional retail chains struggling under lockdowns during the pandemic, the FMCG-focused B2B ecommerce model thrived. Several companies in Indonesia and India that implemented the model secured large amounts of capital in 2020 and 2021. However, as restrictions eased, end-retailers went back to their traditional methods of ordering stock, according to Roshan Raj, partner at Redseer Strategy Consultants. This hit firms like Ula and Udaan hard financially.
- Where to next?: With the once-lucrative FMCG distribution business model now looking less promising, Ula and Udaan both face questions over how to pivot. Two sources told Tech in Asia that Ula has laid off a significant portion of its B2B marketplace staff, leaving a small team in place to explore new ideas. Udaan, meanwhile, has merged various units, including FMCG, to cut costs.
- Switch up: Analysts are still bullish on the future of B2B ecommerce, especially in categories beyond FMCG. Redseer’s Raj pointed to manufacturing, construction, fashion, and electronics accessories as areas with potential.
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