Deal focus: Evermos extends impact to social commerce

There’s a frustrating asterisk attached to the datapoints concerning Indonesia’s massive strides in mobile penetration and e-commerce adoption. Inordinately prohibitive logistics costs are limiting much of the retail digitalisation story to incumbent heavyweights. In a country where logistics costs account for up to 30% of a USD 1trn GDP, boutique brands hoping for a national footprint don’t stand a chance.

“If you go online, yes, you can grow the business, but you can’t be a national brand just focusing on online,” said Arip Tirta, president and co-founder of Indonesian social commerce platform Evermos. “We’re trying to disrupt the retail market through connected commerce by providing a seamlessly integrated online and offline solution.”

More precisely, disrupting Indonesia’s estimated USD 300bn retail market – 80% of which is offline – is only half the idea behind Evermos.

There is also a significant component of social uplift in the business model, which posits that supporting small brands and mobilising an underemployed workforce as resellers represents significant impact value. Around 70% of the influencer-like resellers on the platform are women, and 65% of them have no college-level education.

This angle struck a chord with the International Finance Corporation (IFC), which has led the company’s USD 39m Series C round, bringing total capital raised since inception in 2018 to USD 77m. Endeavor Catalyst, SWC Global, and Uni-President Asset Holdings also joined the round, as did existing investors Jungle Ventures, Shunwei Capital, UOB Venture Management, and Telkomsel Mitra Inovasi.

Evermos connects 1,600 local brands – most of which are classified as artisan or emerging players with home-based manufacturing processes – to 160,000 monthly transacting resellers. It claims to reduce logistics costs for brands through a system where reseller’s combine multiple orders into a single checkout and sometimes fill last-mile distribution.

The platform eschews many products with specialised handling needs such as food and is curated to match the reseller network. Fashion, homewares, wellness goods, and prayer items are the core categories; there is a focus on shariah compliance.

Transportation is mostly handled by third-party logistics providers. Evermos rents one warehouse to store products on a consignment basis. On average, resellers earn around USD 40 in commissions per month, and the top 1,000 resellers earn up to USD 1,000 per month. They are encouraged to expand their ranks through referrals.

“The reseller model has been in Indonesia for many years, but the main issue for resellers is that to join the programme, they typically pay some upfront fee. Then there’s a minimum payment, and you are only able to sell one brand,” Tirta said. “We combine those reseller programmes, put them under one umbrella, put in technology, and put in a system to help more individuals to join and make money.”

The plan is to broaden an existing presence in Java and expand into Sumatra, while investing in upskilling services and digital advertising for resellers. Implementing artificial intelligence to help resellers better understand consumers is also on the agenda. The enlarged war chest appears ample.

“We still have around 40% of the Series B money and we are close to break-even and close to being EBITDA and cash flow positive,” Tirta added, noting that gross merchandise value (GMV) grew 17x between the 2020 and 2022 financial years. “If we scale the business 80% to 100%, we can turn into EBITDA positive and cash flow positive.”

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• Topics
• Southeast Asia
• Consumer
• Support services
• Technology
• Media
• Expansion
• Indonesia
• IFC
• Jungle Ventures
• Shunwei Capital Partners
• UOB Venture Management
• e-commerce
• Logistics
• Impact investment