Indonesia’s Tokopedia and Bukalapak were in acquisition talks. Nothing happened.

Indonesia’s ecommerce marketplace Tokopedia had been in talks to acquire smaller rival Bukalapak, Tech in Asia has learned, although an actual deal did not materialize.

Tokopedia CEO William Tanuwijaya and Bukalapak’s chief executive confirmed that they were exploring a potential merger.

Zaky specified there were discussions last year and in 2014, but Bukalapak declined an offer. He adds that his company is not in a weak position nor looking for a buyer, and had in fact just raised a new round of funding.

Tokopedia is backed by SoftBank and Sequoia Capital. Its current valuation is unknown but likely near, or above, US$1 billion. Bukalapak’s valuation sits at about US$200 million.

It’s unclear whether it ever came to concrete talks between the two companies to discuss deal value.

Bukalapak CEO Achmad Zaky.

Bukalapak is backed by KMK, a subsidiary of Indonesian media conglomerate Emtek. KMK CEO Adi Sariaatmadja said there was no discussion with Tokopedia about a possible acquisition.

“It’s not true,” Adi told Tech in Asia. He also insists Bukalapak is doing fine. It’s growing in team size and “revenue is climbing.” Toward the end of last year, a new COO was brought in to help Bukalapak gain efficiency.

Not the only one struggling

This year is going to be tough for most mid-sized ecommerce players in Indonesia.

This view is backed by multiple sources in the industry, and it’s easy to see why pressure on these startups is mounting.

With mighty Alibaba now backing Lazada, Sequoia and Softbank behind Tokopedia, and Amazon’s plans for Southeast Asia becoming more concrete, whoever wants to stay relevant must be prepared to continue spending millions of dollars on winning market share.

Companies like Matahari Mall, Blibli, or BerryBenka won’t have access to capital at the scale of what Alibaba or Amazon can afford to spend.