WowBid to Discontinue Service Due to Shrinking Revenue During Pandemic
Significant decrease of users, employees agreed on certain number of compensation
WowBid, an auction-concept marketplace had to discontinue its services at the end of June 2020. Pandemic caused revenue to shrink down significantly. Recently adapted to various strategies, but eventually, the shutdown was inevitable.
WowBid's Founder & CEO, Rafli Ridwan shared stories on WowBid's previous journey. One thing causing WowBid's struggle during the pandemic was because the marketplace sold tertiary goods, while the majority of people allocated their spending funds to basic needs and health. Sales are going further down.
"Wowbid is actually an auction, we sell items such as smartphones, clothes, etc. We don't sell basic items at all. During this pandemic, people were reluctant to buy smartphones, not interested in buying clothes. They are more interested in buying rice or APD [health uniform]," explained Rafli.
Before the pandemic, they were quite optimistic about their achievements. Statistics submitted, they already have 720 thousand registered users, with 180 thousand active monthly users. However, when the pandemic began to enter Indonesia WowBid services suddenly became quiet. The peak will be in March and April 2020.
"Before closing the service there are considerations to temporarily stop the service, to be able to operate again after the pandemic. After a long discussion with shareholders and recalculating the results we will still find it difficult to enter the top five marketplaces in Indonesia. Then, we make a decision (closing the service)," Rafli explained.
Employees affected by the shutdown were mostly transferred to other companies owned by the founder. The others were dismissed with agreed compensation.
"There is compensation agreed between the employee and the company," Rafli said.
It was doing well at first
WowBid is one business marketplace that is brave enough, choosing the auction concept in the midst of fierce competition in the e-commerce industry. Rafli claims, within one-year, WowBid has managed to get 1 million downloads.
In 2019 WowBid managed to secure US$ 5 million Pre Series A funding or equivalent to Rp70 billion from PT Envy. Funding was then used to accelerate business growth. With a different concept than most, WowBid has the ambition to become an online shopping choice for Indonesian people, of course by prioritizing more attractive price offers.
"The reality is, to succeed as a marketplace in Indonesia, we need huge funds to compete. Wowbid customers are the same customers as Tokopedia, Bukalapak, Shopee, Lazada, and others. They are the same people. The difference is, they have the opportunity to buy cheaper goods. It's hard to compete with other businesses with more capital," Rafli concluded.
Update: We added information from the founder regarding the employees condition post-shutdown.
–Original article is in Indonesian, translated by Kristin Siagian