Why Bukalapak is bullish on Mitra even as rivals retreat

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Hello reader,

I live in Singapore, and there are a number of mom and pop grocery stores in my neighborhood. But I hardly buy from them since I prefer to visit supermarkets or convenience stores like 7-Eleven instead.

Nothing against the mom and pops – I suppose I’m just a creature of habit.

In Singapore, only 25% of the market is still served by traditional grocers. However, the numbers in Indonesia and the Philippines are far higher – 79% and 67%, respectively.

Bukalapak (BUKA, IDX), whose Mitra business provides goods and services to these warungs – as they are known in Indonesia – is counting on their continued presence in the daily lives of Indonesians.

In this week’s Big Story, I analyze the company’s Mitra segment and consider how it may be poised to benefit from the recent pullback by rivals like GoTo Group (GOTO, IDX) from the space.

Bukalapak may also expand regionally through its Mitra unit. It already has a small presence in the Philippines to test the viability of the model there.

However, Bukalapak’s investors seem to be keeping management on a short leash for now, so any significant expansion outside of Indonesia may have to wait until the macroeconomic situation changes.

— Simon

THE BIG STORY

Image credit: Timmy Loen

Bukalapak seizes ‘great opportunity’ in Mitra as rivals like GoTo exit
While Bukalapak’s Mitra business has shrunk, it’s part of a deliberate effort to bring the unit to a position that’s contribution margin-positive.

3 Trends to keep an eye on

Hot stocks, earnings reports, restructuring, pressure from activist investors, and more.

2 Eye-popping facts

The one you didn’t see coming