Indonesian e-commerce company Bukalapak said Wednesday that its revenue for the second quarter grew 6 percent quarter-over-quarter to Rp 1,244 billion ($76.45 million), underpinned by marketplace growth.

The firm said in a statement that the firm’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the second quarter was -Rp 41 billion and improved by Rp 84 billion year-over-year.

According to the statement, the marketplace division delivering excellent growth of 26 percent over the quarter, primarily supported by the continued success of gaming.

Meanwhile, the 17 percent growth in its online to offline (O2O) division in the first half year-over-year was driven by a continued improvement in its product mix and a broader range of service offerings to Mitras.

73 percent of the company’s second quarter total processing value (TPV) is from outside the Tier 1 regions of Indonesia, where it continues to see strong growth in all-commerce
penetration and digitizing trends among offline micro retail stores.

The O2O business represented 50 percent of group revenues in the first half of 2024.

The firm’s overall contribution margin, calculated as gross profit after sales and marketing (S&M) costs, improved from Rp 124 billion in the first quarter to Rp 162 billion in the second quarter.

O2O’s contribution margin as a percentage of TPV was steady at 0.13 percent, but there was a significant 20 basis points improvement in Marketplace’s contribution margin to 0.77 percent in the second quarter of 2024.

According to the firm, the second quarter was always going to be hard to replicate the strong performance of the first quarter given the seasonality impact of Ramadan, which particularly hit O2O revenues.

It is noted that in 2024, Ramadan fell in March and is a period of higher seasonal spend that was captured in the first quarter results.

Eid, which celebrates the end of Ramadan, is a notorious time to celebrate with the family and is accompanied by a two-week holiday – hence there tends to be less expenditure, said the firm.

However, the firm’s overall revenue was up 11 percent in the first-half, with a 3 percent+ take-rate in the most recent quarter.

Its core earnings were also up more than three-fold to Rp 306 billion when comparing the first half to the comparative period a year ago.

According to the firm, the strong marketplace performance in the second quarter was boosted by gaming during the Eid celebrations with the take-rate rising as high as 3.5 percent, which is a short-term positive but is unlikely to remain at that level for the rest of the year.

The firm noted some softening amongst the mass market consumer in the quarter, but the evidence continues to show that this remains a viable business model.

It also noted that it continues to invest in growth opportunities that will scale the business and boost both earnings and margins in years to come.

The firm also highlighted it is continually investing and innovating in our consumer value proposition, with enhanced selection, excellent in-app user experience and quality delivery options.

The firm also continues to maintain good cost discipline. It noted there was a normalization in general and administration (G&A) expenses in the second quarter which returned to the levels of the second quarter of 2023.

It reckoned that technology investment is a key component as it continues to drive cost efficiencies and reduce execution times.

“Despite being a more muted second quarter, we’re pleased with our performance in the first-half of the year,

“The 30 percent quarterly increase in contribution margin and strong take-rate – which has breached 3 percent on a blended basis for the first time – is particularly pleasing”, said Teddy Oetomo, Bukalapak’s President.

According to him, patience and perseverance continue to be an on-going cornerstone of the leadership team.

He also noted the ability to pace that growth with the necessary infrastructure development has resulted in a Bukalapak with strong foundations that has resulted in a better, stronger, more diversified company.

“Profitability continues to be prioritized over outright growth,

“Generating sustainable long-term profitable growth and creating real value whilst optimizing our operations and maintaining our financial discipline is the key focus of the management team over the coming years,” he added.

Indonesia’s Bukalapak posts positive EBITDA for the first time in first quarter