GudangAda gears up for challenges as it guns for profitability

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Hi there,

Prior to the WeWork debacle, when I was still writing and reporting full time, I remember how profitability was generally an afterthought for many startups and their investors. Gross merchandise value and revenue growth were the main metrics most companies were throwing around.

That has since changed, thanks in part to Adam Neumann, and for the better, I’d say. But merely shifting focus to profitability roadmaps doesn’t necessarily translate to actually being on the path to profitability.

A frequent refrain in the headlines of our earnings stories is that X company’s revenue has grown, but losses widened. That includes Indonesian B2B ecommerce company GudangAda, whose financials my colleague, Jofie, breaks down for today’s Big Story.

The good news, of course, is that GudangAda’s revenue did jump a whopping 9x in the financial year ending December 31, 2021. Losses before taxes, however, widened by US$10 million to US$25 million during the same period. As high inflation and rising fuel prices pose further headwinds in the coming year, it is in times like these that companies like GudangAda will need to prove their mettle.

Speaking of profitability, in this week’s Hot Take, I discuss whether ecommerce platforms should follow in the footsteps of Amazon and Shopify to plunge deeper into the lucrative advertising business.

— Putra

THE BIG STORIES

1️⃣ Indonesia’s GudangAda posts 9x revenue jump in FYE 2021, but losses widen

Image credit: Timmy Loen

The B2B marketplace is making efforts to achieve profitability in the near future but high inflation rates and rising fuel prices may hinder its growth.

2️⃣ The key players in Southeast Asia’s quick-commerce space (updated)

Photo credit: BeepBeep

THE HOT TAKE

NEWS YOU SHOULD KNOW

FYI