Tokopedia eyes 2021 dual listing, more collaborations in Indonesia's digital boom

23, Dec. 2020

(Photo courtesy of Tokopedia)
(Photo courtesy of Tokopedia)

By Anita Fildzah

JAKARTA, NNA – From a start-up to a leading unicorn company in Southeast Asia, Indonesia's e-commerce giant PT Tokopedia (Tokopedia) is poised for further accelerated growth if its aspiration to go public in the U.S. and Indonesia in 2021 is realized.

After enjoying a tremendous growth this year due to many Indonesian consumers and traders shifting online since the coronavirus pandemic, the private company said it was considering hastening the process and had engaged Morgan Stanley and Citigroup as financial advisers.

For quicker access to capital, it is studying investment proposals by special purpose acquisition companies (SPACs), which could bring the dual launch of its initial public offer forward, from its earlier three-year target to as early as next year.

Listed on American Nasdaq, Bridgetown Holdings, a special purpose acquisition company backed by Hong Kong billionaire Richard Li Tzar Kai and Silicon Valley entrepreneur Peter Thiel, is reportedly in talks about a potential merger with Tokopedia, according to a Bloomberg report last week.

Backed by SoftBank Group Corp., Tokopedia could be valued at $8 billion to $10 billion in a transaction, sources told the news network.

Bridgetown, which is also in talks with other unicorns in Southeast Asia, had said in a U.S. regulatory filing, “Southeast Asia is entering a new era of economic growth, particularly in the new economy sectors, which we expect will result in attractive initial business combination opportunities for attractive risk-adjusted returns.”

Ernest Fung, Tokopedia’s senior vice-president of strategy and finance, told at a forum on Dec. 8 that several SPACs had approached Southeast Asian technology companies, including Tokopedia, about potential investments.

Last week, a Tokopedia spokesman said the SPAC route to the U.S. listing is a potential option but the company is not committed to anything yet.

Founded in 2009 by William Tanuwijaya, Tokopedia has already raised $2.8 billion in funds as of Nov. 16, according to data from Crunchbase.

Following in the footsteps of the earlier investors like Softbank and Alibaba Group were recent new-comers Google and Singapore government-owned fund Temasek Holdings.

According to the 2020 e-Conomy report by Google, Temasek and Bain, Indonesia's digital economy is on track to grow 11 percent from 2019 to $44 billion in 2020, and from there on, by 23 percent to $124 billion in 2025.

Tokopedia's external communications senior lead, Ekhel Chandra Wijaya, told NNA that Tokopedia is focusing on more collaborations with strategic partners such as the government and village enterprises to help drive the economy of the Indonesian economy which has been battered by the pandemic.

Tokopedia, which aims to help grow the country's digital economy further, wants to help small businesses across the archipelago go online and provide them with various innovative solutions to boost their productivity.

Tokopedia was already contributing to more than 1 percent of Indonesia's economy, according to research by the University of Indonesia in 2019. In terms of economic empowerment, Tokopedia has proven to increase the likelihood of sales by up to 22 percent.

As of October 2020, Tokopedia had more than 100 million active users monthly and more than 9.7 million sellers, of which 86.5 percent were new to the platform. Almost all the traders currently run MSMEs (micro, small and medium enterprises), with an overwhelming 94 percent from the ultra-micro category.

Tokopedia had said the top performing categories on its marketplace during the period of July-September 2020 when people were working and schooling from home were food and beverage; health; household products; and electronics, cellphones and tablets.

Sales of household and body care items more than doubled after the pandemic spread in Indonesia, while that of food and beverage products nearly tripled during the crisis. When it worsened in the third quarter, sales of health items went up by almost 2.5 times, Tokopedia noted.

Apart from facing local rival Bukalapak in wooing local traders to go online, Tokopedia is also fighting strong competition from Shopee, Lazada, Alibaba, which entered the fray in recent years.

In terms of the most-frequented site, Shopee has overtaken Tokopedia as the top platform for now, according to iPrice meta-search website this year.