Fashion e-commerce site BerryBenka now serve 300-500 transactions per day after its launch in late 2011. CEO Jason Lamuda revealed that he plans to raise another round of funding some time this year as the company grows in double digit percentage on a monthly basis. Lamuda had a chat with us this week about the Indonesian e-commerce landscape and shared his views on VCs looking into investing in the local Internet business scene, his competition, growth potentials, and other issues affecting Internet-based businesses.
In general Lamuda has a positive outlook on his industry. While Zalora quickly established itself as the monstrous force in fashion e-commerce, he sees the Rocket Internet company as not only a fierce competitor but a fellow industry player that is helping Indonesian consumers to be more familiar with online stores.
Lamuda left Groupon along with co-founder Ferry Tenka some time late last year and while Tenka went on to run his own online store, Bilna, Lamuda joined BerryBenka which was set up by his wife, Claudia Widjaja and her friend, Yenti Elizabeth. Shortly after, he took over as company President and CEO. With Bilna and BerryBenka sharing the same office floor in a West Jakarta office tower, it made it easy for them to manage their roles as advisors in each other’s companies.
Within six months, BerryBenka grew its sales from 200 transactions per day to up to 500 per day. Back in November 2012, the company was seeing roughly 30% growth on a monthly basis and that seems to have been maintained since as Lamuda was only prepared to say that his company “has been experiencing double digit growth on a monthly basis since its founding”.
Asked about the departure from Groupon, Lamuda said that both he and Tenka saw the potential of e-commerce being a major driver for the company but the direction from above wanted to maintain focus on the daily deals business, so having maintained the disagreement in vision, the two co-founders decided to part ways.
Lamuda told DailySocial about the difference between operating under Rocket Internet’s vision and Groupon’s own vision. “When you deal with Oliver and Marc Samwer, you’re being driven to deliver significant growth so we focused on making sure the company gained a lot of traction in a very short time, but when the Rocket guys began to shift away from the company as Groupon headquarters took over, the focus changed to sustainability and we were sort of caught in between”. The Verge published an extensive feature on Groupon a few months ago following the ousting of Groupon co-founder Andrew Mason from his company.
With his focus now on BerryBenka, Lamuda aims to maintain the company’s growth trajectory. “Indonesia is about three to five years away from being a significant e-commerce force”, he said. “In the meantime, we’re growing the company alongside the consumers and educating them along the way”. If that sounds familiar, that’s pretty much what Lazada chief Max Bittner said earlier this year on his company’s anniversary.
Clearly Lamuda shares Bittner’s outlook. E-commerce is going to be big in Indonesia and being in the market early will earn them a lot of goodwill, brand familiarity, loyalty, and a better understanding of the market.
“We’re currently doing… well. Not super well but we’re generally happy with things at BerryBenka. E-Commerce is a lot like traditional retail”, Lamuda said. “There’s a lot of little stores and a handful of department stores and when you go to malls, what do you see? A bucket load of fashion outlets, a ton of restaurants, a few electronic stores, one or two book stores, and a couple of supermarkets and department stores”, he explains.
Maintaining BerryBenka’s focus on women’s fashion wasn’t a difficult decision for Lamuda when he took over. “Zalora and Lazada are like department stores. They’re big, they carry a huge range but the specialist stores like Zara or Next are still around and they don’t carry as large of a range. We’re focused on providing a certain line of products”.
Lamuda finds that fashion e-commerce is a good place to be, given his mall analogy earlier, as it’s not a zero sum game. Even when there’s a handful of big players, it doesn’t close the door on the smaller ones because the range of products are different and consumers see different values from the different stores. “That’s why we’re focusing on our range of products. We want to make it distinct so people know it’s us”. Since the launch in August 2011, BerryBenka has grown its range of products from 50 brands to 400 brands.
“We’re actually happy that Rocket Internet is in town because who else is willing to spend that much money on advertising on print, TV, and on the web to get people to know e-commerce? Having them around also helps us to grow”, explains Lamuda.
While on the subject of growth, we shifted the subject to venture capitals. BerryBenka raised funds earlier this year from Japan’s GREE Ventures and from Singapore-based East Ventures in 2012. “There’s a lot of VCs who are prepared to put money down for seed funding and maybe series A but beyond that there’s very few”, Lamuda lamented. Many potential investors from the local scene, he said, are a little gun shy. Most have yet to understand the issues surrounding online businesses and it affects their willingness to invest.
“We are looking to raise another round to help us expand so we’ve spoken to a lot of them”, Lamuda said. “It’s good that local funds are being set up like Merah Putih and Grupara because foreign funds generally look for a regional company or a regional growth but there’s a lot in this country that hasn’t been explored or touched and we see a lot of potential here in the next few years”.
