Bukalapak: Expanding customer offerings in eCommerce

How Bukalapak diversified its revenue streams by generating value-added services to its merchants and customers.

The challenge

Indonesia is one of Asia’s foremost mobile-first nations with 70% of their internet traffic coming from mobile devices. Estimated at $40 billion in 2019, Indonesia’s Internet economy has more than quadrupled in size since 2015 at an average growth rate of 49% a year. As the largest and fastest growing Internet economy in the region, Indonesia is well on track to cross the $130 billion mark by 2025.

However, a roadblock that eCommerce in Indonesia faces is the security of online payments and eCommerce delivery reliability. A report by JP Morgan in 2019 found that Indonesia still has significant rates of online eCommerce fraud. With the booming eCommerce scene in Indonesia, there is an increasing gap due to the inherent risks associated with the eCommerce market – damage and loss during transit.

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The solution

Bukalapak teamed up with Igloo to offer six different protection policies to merchants and consumers on its platform:
  • Delivery
  • Electronics
  • Digital Goods
  • Goods Protection
  • Returns Insurance
  • FLEXAS protection (Fire, Lightning, Explosion, Impact of Aircraft)

This provides merchants and consumers risk protection for common eCommerce pain points, while building trust in conducting business and purchasing on Bukalapak.

Solution features

Smart recommendations
Curating product recommendations according to what customers have in their cart or based on their current purchase history allows customers to feel like the platform is tailored for their needs. This in turn increases transaction value and conversion rates for Bukalapak.
For example, Customer A buys a new Smartphone and at checkout an electronic insurance policy is offered at around $5.
Or, if a customer buys a new pair of shoes, transit protection is offered at a competitive price of only $2.
Seamless purchase and activation journey
The purchase and activation of our policies takes just a few steps. For instance, when a customer buys a new phone, our recommendations engine offers a Phone Screen Protection (PSP) policy to insure their new device.
Fuss-free claims management and processing
When a claim has to be made, customers need only to log on to the app and submit their claims. The turnaround time for reimbursement is short as well, after claims are. A list of authorised repair shops is also available in-app, which help consumers get their devices repaired quickly.

The outcome

Igloo’s fully digitalized claims creates a seamless, secure and convenient shopping experience for Bukalapak’s customers. Introducing digital insurance products at checkout expands

Bukalapak’s ecosystem of services to their customers and diversifies their revenue streams as they get to provide complementary products on top of their current ones which helps with customer retention.

The successes of the partnership are reflected through the increase in sales volumes of insurance products on Bukalapak’s platform.

Since the inception of the partnership in 20XX, starting with xxx, the partnership has grown from strength to strength, with the addition of up to 7 insurance products provided on Bukalapa’s merchants and customers.  

The number of customers who have purchased insurance on Bukalapak is xxxx. 50 million policies have been sold, with transit protection being a major contributor with more than 2 million policies sold per month.

“We are thrilled to partner with Igloo as their solutions provide customers a shopping experience with a peace of mind and creates a competitive advantage for us by catering to our customers’ needs.” - Victor Lesmana, Director of Payment, Fintech, and Virtual Products, Bukalapak.

Sources
Google, Temasek, and Bain & Company 2019. ‘e-Conomy SEA 2019'
https://www.blog.google/documents/47/SEA_Internet_Economy_Report_2019.pdf
Indonesia-Investments.com, May 2016. ‘Online Scams in Indonesia: 26% of Consumers Become Victim of Fraud.’
https://www.jpmorgan.com/europe/merchant-services/insights/reports/indonesia

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