Kitabeli Secures $10M Funding to Fuel Indonesian Social Commerce

KitaBeli Secures $10 Million Series A Funding

KitaBeli, an Indonesian social commerce application specializing in group purchasing, has announced the successful completion of a $10 million Series A funding round. This investment was spearheaded by Go Ventures, with significant backing from Gojek, alongside contributions from existing investors AC Ventures and East Ventures.

Focus on Underserved Markets

Currently, KitaBeli concentrates its efforts on the distribution of fresh produce and fast-moving consumer goods (FMCG) in regions beyond Indonesia’s primary urban centers. A key aspect of their strategy is reaching individuals who are new to online shopping.

The company initially launched in Jakarta in March 2020, subsequently expanding its operations to include Solo and Malang. The newly acquired funds will be allocated to broadening KitaBeli’s reach within Java, enhancing its logistical capabilities, and further developing its mobile application.

Rapid Growth and Cost-Effective Acquisition

KitaBeli reports a substantial month-over-month growth rate of 80% since its inception. Notably, the company has achieved a remarkably low customer acquisition cost of only 10 cents USD per user.

A Distinct Social Commerce Model

Unlike other Indonesian social e-commerce platforms like ChiliBeli and Woobiz, which rely on networks of resellers and agents, KitaBeli facilitates direct orders through its application. Customers participate in collective purchasing opportunities to secure reduced prices.

For agricultural producers and suppliers, KitaBeli provides access to a wider customer base across Indonesia. The average user expenditure on the app is currently $70 USD per month, and plans are in place to introduce additional product categories, including beauty items, fashion, and accessories.

Direct Customer Relationships

Prateek Chaturvedi, co-founder and CEO of KitaBeli, emphasized the importance of direct engagement with end consumers. He stated that this approach fosters greater customer loyalty and positions KitaBeli as the preferred e-commerce platform for new online shoppers.

He further explained that maintaining direct relationships mitigates the risk of customer loss should an agent discontinue their partnership with the company.

Logistics and Delivery Network

While KitaBeli does not employ a traditional reseller network, it collaborates with delivery partners to provide last-mile services, offering them opportunities for supplemental income. The company intends to continue expanding its delivery infrastructure throughout Indonesia to overcome logistical challenges in reaching smaller cities and rural areas.

Comparison to Pinduoduo

KitaBeli draws parallels to Pinduoduo, a rapidly expanding Chinese e-commerce company that also began as a group-buying service for fresh produce, targeting growth in smaller cities.

Addressing Indonesian Market Specifics

However, Chaturvedi points out that “tier 2-4 cities in Indonesia still lack the digital and logistical infrastructure that similar cities in China have.” He also notes that Indonesian consumers are relatively new to the internet and require guidance on utilizing e-commerce platforms.

The KitaBeli application is designed with first-time e-commerce users in mind, featuring a compact download size of only 6MB, ensuring accessibility for individuals with older smartphones or slower internet connections.

Focus on the Indonesian Market

KitaBeli remains committed to the Indonesian market, choosing to prioritize its growth within the country rather than expanding into other Southeast Asian nations. This decision is based on the belief that the Indonesian market is substantial and largely untapped.

Go Ventures’ Perspective

Aditya Kumar, senior vice president of investments at Go Ventures, stated in a press release, “E-commerce penetration beyond the large metros has remained low, predominantly because of lack of trust, poor product availability, and high logistics costs. Kitabeli is well positioned to address these challenges through the social nature of its product, accelerating online shopping for a new generation of users and bringing the benefits of e-commerce to a wider population across Indonesia.”