Meesho and Kitabeli’s bumpy social commerce corridor

Indonesia’s Kitabeli recently secured investment from the co-founders of Indian social commerce unicorn Meesho. But the two platforms follow different business models, which raises the question whether the linkup can help Kitabeli grow its group-buying model into a unicorn

Last month, Kitabeli secured an extension funding to its US$10M Series A. Investors included the two co-founders of India’s first social commerce unicorn, Meesho

The investment also stood out because Kitabeli is consumer-facing and doesn’t employ the popular reseller model, which has received more funding in Indonesia

While Kitabeli will benefit from the support of Mesho’s co-founders, the extent of the transferable learnings is questionable because Meesho is a reseller platform

But there’s room for both to learn from each other, especially as social commerce startups show an inclination to become more consumer-facing as they mature

The week of 20 September was a busy one for Indonesia’s social commerce startups. On Tuesday, Dagangan Dagangan The Business Times Monk's Hill Ventures leads US$11.5m Series A round for Indonesia's DAGANGAN Read more announced a US$11.5 million Series A funding round. On Wednesday, Halal-focused Evermos Evermos TechCrunch Indonesian halal-focused social commerce startup Evermos lands $30M Series B Read more said it had raised a US$30 million Series B. And on Friday, Kitabeli Kitabeli Tech in Asia Meesho founders back KitaBeli’s series A extension funding Read more revealed it had raised an undisclosed amount in an extension of its US$10 million Series A round six months ago.

That’s at least US$41.5 million channelled to three different social commerce startups within four days. One of those fundings was of particular interest because of the involvement of Vidit Aatrey and Sanjeev Barnwal, co-founders of Indian social commerce unicorn Meesho. They participated in 18-month-old Kitabeli’s Series A extension, along with investment firms Kopi Kenangan Capital and Banana Capital.

This Indonesia-India linkage is nothing new. Meesho, in fact, had entered Indonesia in 2019, but retreated after the pandemic hit last year; it decided to focus on defending its home turf. The co-founders of Indian bookkeeping company Khatabook and business-to-business (B2B) marketplace Udaan have also invested in their Indonesian counterparts, BukuWarung and Ula, respectively.

The reason why Indian companies and founders are investing in comparable businesses in Indonesia is quite obvious—a similar business model should lead to a similar growth trajectory. However, in the case of Meesho and Kitabeli, that’s not quite the case. Because they follow different business models.

Meesho, for the most part, has been serving resellers, while Kitabeli deals exclusively with end-consumers. (We’ve previously written written The Ken The many forks in the path to become Indonesia’s first social commerce unicorn Read more about the different models of social commerce in Indonesia.) And if you look at Indonesia’s social commerce sector, more investments have been channelled into businesses with the reseller model—at least US$78 million since last year.

Explore more infographics like this in The Ken -
Visual Stories

There are two reasons for this. One, quite simply, because there are more platforms following the reseller model in Indonesia. It’s arguably a more intuitive way to start a social commerce startup in the country, as it allows the players to tap into 3.5 million warungs warungs Warung A small retailer, typically family-owned.

AUTHOR

Yunindita Prasidya

Based in Indonesia, Dita is passionate about tracking the country’s growing digital economy. Her coverage is sector-agnostic—she has written about e-commerce, edtech, fintech, venture capital, and publicly-listed companies, as well as stories on careers and workplaces. She was previously a business journalist covering banking and the stock market at The Jakarta Post, Indonesia’s leading English daily.

View Full Profile

The only business subscription you need

Unrivaled analysis and powerful stories about businesses in India and Southeast Asia from award-winning journalists. Includes access to longform articles, premium newsletters across a range of topics depending on your interest and our top-ranked podcast. For those who want to be prepared for what comes next.

So much journalism in India is superficial.

Articles are generic, almost cookie-cutter in their approach. And they don’t provide enough context on the issues they cover. The Ken is different. I don’t always agree with everything they say but I appreciate their commitment to publishing deeply reported narratives and investigations. Their reporters find new ways to analyze tech among other industries. And that’s always worth a read.

Sid Talwar / Co-Founder and Partner / Lightbox Venture Capital

As entrepreneurs, we thrive on being in the know at all times.

A personal subscription to The Ken was a no brainer. But as startup founders, this isn't enough. Team members also need to be in the know, for everyone handles customer-facing responsibilities and an ecosystem change that impacts customers also impacts us

Kiran Jonnalagadda / Co-founder / HasGeek and Internet Freedom Foundation