Exploring Monetizing Opportunities in E-commerce Companies

E-commerce companies considered tend to burn money for the highest GMV as a metric. Above all, in principle, companies of any kind is required to make a profit. This is where the business development team took part to look for profitable business opportunities.

Regarding this topic, #SelasaStartup invited Blibli Histeria's Vice President of Business Development & Project Lead, Cindy Kalensang as the speaker. Cindy is to discuss further on various business development tasks, their relation to finding business opportunities for e-commerce services, and how they are implemented in Blibli.

Generating business model

Cindy explained the basic task of business development is to develop a business for better growth, by exploring new business partnerships and so on. Therefore, he worked with various teams from Blibli's other divisions for coordination.

In developing new business models, the business development team identifies underserved consumer needs in order to provide the right solution, called product market fit. "Product market fit is the one that needs to be iterated because consumers are looking for value, not only originality."

Blibli started operating in 2011 using the B2C business model, as they wanted to guarantee the authenticity of goods to consumers. Therefore, Blibli collaborates with lots of brand partners. In this business, Blibli is taking a commission as a way of monetization.

The company has warehouses located at some spots throughout Indonesia to support its business model, especially to speed up delivery to consumers. Over time, the situation has changed, as a result, Blibli has developed other business models for B2B2C.

"Therefore, the process is to buy goods in large quantities, then store them and distribute them to our warehouse. Then, for B2B2C, revenue comes from margins, while B2C is from commissions,” he explained.

From the current business model, the problem remains for all e-commerce companies, it's the uneven distribution process. This is because the majority of producers and distributors are located in Java. Eventually, the decision is final to open a new business model, it is C2C which all parties can participate in solving the problem.

"We open C2C, it opens for sellers, but we still curate [the onboarding process] and don't let them sell fake[not original] items."

Implementing new business model

Cindy continued, the competition of e-commerce services in Indonesia has gotten supper tight. It is visible through the number of e-commerce companies that adopted the "burning money" strategy by advertising on television for the sake of new consumer acquisitions.

"Actually, we are not only here to sprint but stay for the marathon. Blibli stands to be sustainable. That's why we must remain loyal to our unique value proposition. The money-burning promo is normal because we want to acquire consumers, the most important thing is that the ongoing delivery value that stated Blibli's difference from other players."

Blibli's business model continues to develop, from pure B2C, now B2B2C and entering C2C. Cindy said, the company continues to be adaptive to the situation. Blibli is also trying a new business model that is a subscription.

This is already running for the BlibliMart grocery service. Cindy explained that the subscription model is quite attractive and considered the key to success for Spotify. Initially, in enjoying music, people were accustomed to buying cassettes or CDs in physical form. Then, Apple comes and offers digital purchases per song.

“Spotify sees that people are saturated with music. In the end, they are offered streaming songs for free, but there are advertisements. They share profit with advertisers. Then they innovate with the subscription model. This is the model we are currently exploring. Amazon is successful with this model, offering one year of free shipping. "

Cindy thought the trial subscription model at BlibliMart is quite on-point because it will be easier for consumers to buy certain needs at a much cheaper price. "Instead of buying when it's sold out, it's better to arrange the purchase. Goods are sent every two weeks. That is our value proposition by making a budget, therefore, spending is more efficient," she concluded.

– Original article is in Indonesian, translated by Kristin Siagianheader: Depositphotos.com