Bukalapak takes Indonesia market to new heights

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A footwear vendor wears a face mask as a preventive measure against the coronavirus disease (COVID-19) at a traditional market in Jakarta, Indonesia, June 25, 2020.

HONG KONG, July 22 (Reuters Breakingviews) - Indonesia’s e-commerce darling is taking the country’s capital market to new heights . Bukalapak, whose name means “opening a kiosk” in Bahasa, has raised $1.5 billion in its initial public offering, pricing its shares at the top of an indicated range, Reuters reported read more citing sources. The deal counts as Indonesia’s largest IPO.

It’s a rich one too. The loss-making Microsoft-backed company which helps owners of small market stalls, or so-called “warungs”, to go digital, is being valued at 47 times trailing sales, based on calculations by Bernstein analysts. That compares to 13 times 2020 sales for e-commerce upstart Pinduoduo in China.

The proceeds will come in handy. Bukalapak has carved out a unique niche by focusing on lower-tier cities, but competition is intense, with market leaders including the recently formed GoTo and Sea’s Shopee all jostling to win the attention of the country's 270 million-odd consumers. The debutante’s success in keeping rivals at bay will now be in the public eye. (by Sharon Lam)

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Editing by Una Galani

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