Blibli Aquires Ranch Market's Majority Stake, Enhancing Online Grocery Vertical

PT Global Digital Niaga, also known as Blibli is to acquire a majority stake in PT Supra Boga Lestari, the company that operates Ranch Market. Based on the disclosure on the IDX, both parties have signed a Share Purchase Binding Agreement (PPPS) with a plan to take over 797,888,628 shares or equivalent to 51% of the total issued and fully paid capital.

The strategic action is interpreted as Blibli's effort to strengthen the value proposition of its grocery service, BlibliMart. In a media conference in late 2020, the company said the daily staple category was among the best-selling throughout the year. Without mentioning detail numbers, it is described that the number of purchases at BlibliMart increased by 3 times during the pandemic.

Similar to a supermarket, BlibliMart's main products are basic necessities such as rice, sugar, cooking oil, etc. For business process efficiency, they have certain branch offices (including warehouses) in several cities covering Jabodetabek and several areas in East Java. Expansion effort has been generated, in terms of groceries, it is mostly same day delivery; In addition, there are several types of products that cannot last long in shipping, such as meat or fresh ingredients.

As of 2020, Blibli has operated 20 warehouses and 32 hub points in 15 major cities. He said, the presence of this logistics infrastructure allows the company to serve consumers at the national level.

They also continue to strengthen features, its latest innovation is a subscription option, therefore consumers can cut cost on every shopping for daily necessities in the BlibliMart category. This option provides two advantages. First, it is a fixed price, customers will be charged the same price even if there is a price change during the subscription period.

Moreover, it is a fixed discount, customers will be charged the same percent or nominal discount even if there is a price change during the subscription period. Both can be selected with a subscription period of up to 54 weeks for a weekly frequency subscription and 12 months with a monthly frequency option.

Blibli's VP Trade Partnership ,Stephanie Santoso said, the current market trend in Indonesia is the company's reason to release the Subscription feature.

Ranch Market property

Since its establishment in 1997, the company currently operates 48 stores, consisting of 16 Ranch Markets, 29 Farmers Markets, 1 The Gourmet by Ranch Market and 2 Day2Day by Farmers Market. The modern retail stores are located across several cities in Greater Jakarta, Surabaya, Malang, Balikpapan, Samarinda, Pekanbaru, Ambon, Dumai, and Palembang.

To begin with, Ranch Market was a franchise format from Ranch Market USA. However, along with its development, there have been many improvements made regarding adjustments to the local market and consumer characteristics. Until 2010, the company terminated the license agreement with Ranch Market USA, and since then the company has obtained permission to use the Ranch Market brand in Indonesia.

There are several advantages, indeed, that BlibliMart can get from the following synergies. In addition to the grocery retail store properties owned and its coverage, the practice of supply-chain fresh products for daily needs can also be applied to provide better service. Online to offline scenarios can also be applied to bring new experiences to customers.

Online grocery valuation

Minister of Trade's, Muhammad Lutfi mentioned, fresh food product sales in the online marketplace will generate a value of more than 21 trillion Rupiah in 2021, an increase of 18 trillion Rupiah compared to the previous year period. When this achievement successfully inscribed by the ecosystem, he is also steady with a projected achievement of 108 trillion Rupiah in the next five years. Obviously this is no small number for a relatively new line of industry.

This potential is certainly improtant to local innovators. Various startups are competing to become market leaders in the sector, including full effort to gain fund injecton from investors. Based on DailySocial.id's report, there have been 10 investments since Q2 2020 [the early period of the pandemic], including: