Heaptalk, Jakarta — Indonesia’s B2B marketplace startup Ula announced that the team would perform a business pivot plan from the inventory-based fast-moving consumer goods (FMCG) distribution business model, impacting the third phase of the layoff decision towards its employees.
As stated on the official website, Ula’s business model transformation is expected to enable the team to reinforce its current focus to a business model more aligned with current conditions through technological contribution to provide high margins and more significant capital efficiency.
Previously, Ula startup had laid off about 134 workforces, approximately 23% of the total employees in December 2022. In the second phase, this startup was also reported to cut around 30% of employees, impacting 125 teams in May 2023.
The company claimed to make these considerations as Ula’s team encountered multiple business challenges, including market turbulence, commodity price volatility, supply shortages, regulatory changes, and rising crude oil prices.
“Ula’s FMCG distribution business has become a highly respected service among Indonesian merchants, suppliers, and investors, specifically amidst the pandemic. However, like any other business, we must adjust our business focus to long-term sustainable economic growth. The scale and complexity of an inventory-based FMCG distribution model requires investment that has proven complicated, particularly in a sluggish digital economy.” The management team of Ula affirmed.
According to the VentureCap Insights (VCI) 2022, this startup noted business revenue worth US$121 million, indicating an over sixfold enhancement compared to 2021. Meanwhile, the firm’s earnings before interest and taxes widened by over twofold to negative US$43 million.
Ula will provide diverse support devoted to the impacted employees, including:
- Severance pay, granting a fair severance compliant with local legal requirements.
- Career support, providing CV guidance, and leveraging Ula’s network to back the laid-off workforces into their next career step.
- Immigration support, affording immigration assistance for the visa holder.
Established in 2020, Ula served traditional shops and retail in the country by empowering digital platforms to optimize the FMCG goods’ supply chain. In its journey, this startup has obtained 200,000 registered stores (Sobat Ula) to access 10,000 SKU products.
This startup offers three solutions, including the marketplace B2B application Sobat Ula, which provides competitive product prices; the community-based selling program Teman Ula to enable people to help other parties in gaining commodities, and Titik Ula to offer its partners who have space as pick-up points for customer ordered goods.
“As we move forward, we are invigorated by the prospect of exploring new, scalable avenues in tune with the realities of today. We observed this matter not as the end but as an opportunity to apply the lessons learned to a brighter and more sustainable future.” Ula’s Management team concluded.
