SBL Pushed to Take Advantage of Retail Market

The trend is playing out across the Asia-Pacific region and beyond, especially since the pandemic, observed Kanaiya Parekh, an Expert Partner at Bain & Company. “Demand for healthier and fresher groceries is a global trend which was already growing in prominence pre-Covid,” he said.

All this worked in SBL’s favour. And as things stood, it didn’t need a buyer to rescue it. Even though revenue and profit dipped in the first half of 2021, it went into expansion mode.

Perhaps seeing peers in the mass-market segment struggle pushed SBL to take advantage of the situation. It wasn’t just Giant closing down. Transmart, which used to be known as Carrefour before Indonesian businessman Chairul Tanjung took control of the franchise, is in financial distress. It’s facing multiple lawsuits for delayed debt payments. Hypermart, a chain that’s part of the Lippo Group conglomerate, is posting losses.

Perhaps seeing peers in the mass-market segment struggle pushed SBL to take advantage of the situation.

It wasn’t just Giant closing down. Transmart, which used to be known as Carrefour before Indonesian businessman Chairul Tanjung took control of the franchise, is in financial distress. It’s facing multiple lawsuits for delayed debt payments. Hypermart, a chain that’s part of the Lippo Group conglomerate, is posting losses.

The new brand benefits from the association with the Ranch and Farmers’ Market brands, which stand for high-quality products. But for the most part, its offering isn’t that different from its predecessors. “It looks just like Giant,” concludes an online reviewer of one of the recently opened Farmers’ Family stores.

That SBL dialled up the aggression is perhaps no surprise given the financial power of its new owner, Blibli.

Blibli’s takeover offer had been generous. When the deal was closed at the end of September, Global Digital Niaga, Blibli’s parent company, said it paid IDR 2,550 (US$0.18) per share for its controlling stake. SBL shares were trading at IDR 2,420 (US$0.17) on the day and had never been worth as much as IDR 2,550.

It’s in the company’s DNA to make acquisitions.

Those in the industry aren’t surprised, however. “Paying a premium is very normal in any merger and acquisition deal. Otherwise, why would the major shareholder sell?” said Angus Mackintosh, an Indonesian markets analyst at CrossASEAN Research. Blibli did not respond to The Ken’s request for comment.

In fact, it has acted more like a digital economy investment vehicle for its parent firm, Djarum Group, rather than a standalone e-commerce business.

Blibli invested in telemedicine app Halodoc back in 2016, acquired online travel agent Tiket in 2017, and even participated in Gojek’s US$1.5 billion Series F round in 2018. Blibli never disclosed how much it spent on these deals. In the case of Tiket, said to have attained unicorn status by now, Blibli would have had to spend at a few hundred million USD for its takeover.

Blibli’s existence in the crowded and competitive e-commerce landscape is made possible thanks to consistent backing from the Djarum Group. One of Djarum’s subsidiaries, Bank Central Asia, is Indonesia’s most valuable company with a market cap of IDR 912.3 trillion (US$64.4 billion). Djarum’s owners, the Hartono family, consistently rank as Indonesia’s richest individuals.