Breakingviews

Bukalapak takes Indonesia market to new heights

3 minute read

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)

On Twitter http://twitter.com/breakingviews

Capital Calls - More concise insights on global finance:

Australia’s 2032 Olympics will go for zinc read more

Moderna’s S&P 500 inclusion has drawbacks read more

Volvo Cars revs up IPO with China pit stop read more

Mediobanca stake-building may have Generali chaser read more

Next benefits from death of the high street read more

Editing by Una Galani

Breakingviews
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

More from Reuters