With Big Name Support, Ula Digitizes Indonesia’s Small Retailers | Startup stories

Nipun Mehra is no stranger to e-commerce and technology investment. Originally from India, a series of advancements in his career led Mehra to Indonesia, where he found conditions similar to those he knew in his homeland. “India is like Indonesia, where you have a lot of mom and pop stores in your neighborhood, and that’s where you go to shop,” Mehra said. CASIA. Realizing the potential to change how these micro-businesses operate, Mehra plans to co-found a B2B e-commerce platform called Ula in 2019 with three like-minded individuals. come in To help traditional retailers operate more efficiently and develop methods to increase revenue and possibly expand their scale.

Ula may not be a household name yet, but the establishment is built on Mehra’s extensive experience in e-commerce. In the year After graduating from Stanford University in 2004, he was a software development engineer for Amazon. The engineer returned to his native India in 2012 and joined Flipkart, which has become one of the largest e-commerce companies in India. During his time at Flipkart, Mehra developed ways for the company to partner with smaller kiosks. At the time, smartphone usage in this segment was very low. “People like me may have smartphones, but mom-and-pop store owners don’t, so there’s nothing they can do.”

Mehra’s tech journey continued at Sequoia Capital, where he was part of the team behind several investments in Indonesia, including the country’s biggest tech companies such as GoJek, Tokopedia and Traveloka. I started getting a lot of exposure to Indonesia from abroad. In the year I came to the country in 2019 and spent five months wandering around the markets. I hired a translator, and we talked to different retailers. “Indonesia was at a point where technology was having a huge impact on retail, and this sector was poised for massive improvement and change,” said Mehra.

As he prepared to found Ula, Mehra teamed up with people he met along the way as technologists and investors. The co-founders include Deri Sakti, who spent ten years overseeing P&G’s operations in Indonesia. Riky Tenggara, former executive at Lazada and aCommerce; and Alan Wong, who previously worked with Mehra at Amazon. “We all have the same passion and vision. Fortunately for us, perhaps because of our track record, we’ve been able to attract some strong investors from the process,” he said.

Ula co-founders (left to right): Ricky Tenggara, Deri Sakti, Nipun Mehra and Alan Wong. Photo courtesy of Ula.

supply and supply chain improvement

Ula operates a wholesale e-commerce marketplace for small and micro retailers. It helps kiosk owners digitize their supply chain and inventory management. Small retailers in emerging markets have a few distinct characteristics, Mehra said. “They know their customers very well. Where you live, they know your name even what you want to buy. This relationship cannot be easily replaced by technology,” he said. “Secondly, their operation is very cost-effective; there are no air conditioners or workers Shop. Since they operate in their own space and are usually below the tax threshold, they have no rental costs.

Normally, Shop Selling foods like rice, instant noodles, cooking oil and packaged foods. They stock household items like laundry detergent and dish soap.

While that human touch Shop The neighborhood offers a picture, but the reality is that these small shops are in a weak position against large retailers. Inefficient supply, lack of affordable product availability, and weak supply chains are problems for mom-and-pop stores, especially in small towns. But Ulla is changing that. Its app allows kiosk owners to order new products for direct delivery. This solves one inefficiency: in the past, Shop Operators had to close their shops during regular business hours to visit wholesalers in person to buy supplies. This includes not only spending time, but also spending money on rental cars and gas.

Ula has a postpaid service. Shop Owners with limited working capital. “If you’re running a small shop, there’s usually no commercial bank account, so you have to pull the money out of personal savings to buy inventory,” Mehra said. “Furthermore, most kiosk owners do not have credit and digital IDs, so they find it difficult to get loans from banks. So we are trying to find more partnerships to help us solve this problem.

Mehra says kiosk partners can improve their revenue by about 15% if they use the app frequently. This is still short of our target as we want to help them increase revenue by at least 30-40 percent. For a new customer, it takes some time to realize the impact as they have to use our offerings continuously to see improvement.

This trend of working with small operators who often run the entire business on their own has caught the eye of investors. Ula raised its first investment of $10.5 million in June 2020 from partners Sequoia India and Lightspeed India. Seven months later, the startup has raised $20 million in Series A funding led by B Capital Group and Quona Capital.

Ula has field teams that show kiosk owners how to use the company’s app. Photo courtesy of Ula.

Indian interest in Indonesian retail

In the past couple of years, investors and entrepreneurs from India have been pouring money into Indonesian startups. Apart from big-name VCs, Ula is backed by the co-founders of India’s unicorn Udan – Vaibhav Gupta, Amod Malviya and Sujeet Kumar. Similar Indonesian startups like BukuKas and BukuWarung have Indian investors. Mehra himself is an angel investor of Bukukas. This influx of capital has seeded an evolution in traditional retail, a vital part of Indonesia’s economy.

Kiosks are an undeniable part of everyday business in these countries. 80% of retail transactions are done in India Kirana Stores, in Indonesia, the share is around 70-75 percent, Mehra said. “While the U.S. retail market was organized before the Internet, in emerging markets technology is beginning to reach traditional retail, giving kiosk owners access to new information that wasn’t available before. The change is now visible,” he added.

Although India and Indonesia have many similarities in how neighborhood shops operate, there are subtle differences. For one, India has a more mature digital payments ecosystem than Indonesia. And while India is a vast land mass, Indonesia is an archipelago with thousands of islands, which means logistics are very complicated.

To meet this challenge, Ula collaborates with local partners and communities, as they know specific geographic areas in their regions and communities and facilitate smooth logistics processes.

Ula now works with more than 30,000 traditional retailers, most of them in East Java, some in Central and West Java. “Going forward, we want to strengthen our presence in these regions by growing our product portfolio to meet the varying needs from one location to another. We will add more categories like apparel and electronics and plan to expand geographically next year,” said Mehra.

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This article is part of KrASIA’s “Startup Stories” series, where KrASIA writers talk to founders of tech companies in South and Southeast Asia.

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