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1. THE STATE OF
eCOMMERCE INDONESIA
ANDRY SUHAILI
CEO, PRICEAREA.COM
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
2. Current State
Government, Regulations – How Secure Are We?
The Rise of SMB & Marketplaces
Role of eCommerce Search Engine – PriceArea.com
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
3. 74.6
34.8
32.4
20.1
17.6
9.1
Indonesia Philippines Vietnam Malaysia Thailand Singapore
29.8% 36% 36%
67%
26.4%
104.2%
Internet users (in million) % of penetration
Source: TechinAsia, November 2013
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
74.6 MILLION
Internet users in Indonesia
4. 43
59.6
74.6
83.6
93.4
102.8
2011 2012 2013 2014 2015 2016
Internet users (in million)
Source: eMarketer,March 2013
17.5%
24.0%
29.8%
33.0%
36.5%
39.8%
% of population
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
20% Y-Y Growth
Internet users
5. 4.6 MILLION
people have shopped online in 2013
2
3.1
4.6
5.9
7.4
8.7
2011 2012 2013 2014 2015 2016
Source: eMarketer,March 2013
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
6. USD 1.8 BILLION
Spent on eCommerce in 2013
$0.56
$1.04
$1.80
$2.60
$3.56
$4.49
2011 2012 2013 2014 2015 2016
Source: eMarketer,March 2013
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
7. Growth driven by Middle Class Spending,
Cheap Smartphones & Affordable Internet
Source: The Boston Consulting Group, March 2013
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
8. Fashion and Females are
the TOP Products & Buyers Respectively
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
CLOTHING
HANDPHONE
PLANE TICKET
/SHOW
LAPTOP &
ACCESSORIES
BAGS
MALE FEMALE
BOOKS
ELECTRONICS
SHOES
Source: APJII, Indonesian Internet Profile, Dec 2012
77.1%
2.1%
8.7%
3.8%
11.1%
5.2%
2.2%
5.0%
39.1%
17.8%
16.9%
16.1%
1.4%
11.0%
9.0%
8.8%
9. Trust is No.1 issue in online shopping in Indonesia
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
34.6%
21.5%
21.5%
21.5%
9.3%
6.0%
5.2%
4.7%
4.1%
4.0%
Source: APJII, Indonesian Internet Profile, Dec 2012
AFRAID OF FRAUD
TOUCH & FEEL THE ITEMS
HIGH PRICES
NOT INTERESTED
PRODUCT QUALITY NOT GUARANTEED
DO NOT KNOW HOW
NOT PRACTICAL
ITEM DO NOT MATCH THE OFFER
ITEMS NOT IN ACCORDANCE TO ANYONE’S LIKING
ITEMS DO NOT MATCH THE PICTURE
10. Challenge in Payment and Delivery
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
Only 3 providers are ready to
support logistics from online
shopping.
BANK TRANSFER
CASH ON DELIVERY
CREDIT CARD
OTHERS
57%
28%
8%
7%
Source: Indonesia Credit Card Association, 2013, VelaAsia
5% 6%
3%
6%
9%
55%
20%
33%
28%
25% 25%
39%
Indonesia Philippines Vietnam Malaysia Thailand Singapore
Delivery Payment
14.7 Million Credit Cards
(4.5% Penetration)
11. Indonesian Government defines eCommerce as:
“Electronic transaction is legal action which is done using
computer, computer network, and/or other electronic medias.”
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
12. Indonesian Government defines eCommerce as:
“Electronic transaction is legal action which is done using
computer, computer network, and/or other electronic medias.”
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
13. Associations like idEA helps facilitate the growth
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
www.idea.or.id
14. STARTUP ASIA 2013 THE STATE OF eCOMMERCE
eCommerce Platforms
Payment & Logistics
15. STARTUP ASIA 2013 THE STATE OF eCOMMERCE
Marketplace
• C2C model
• B2C model
• B2B model
• B2B2C model
Direct Selling
• Consignment model
• Outright model
• Dropship model
2 Popular Business Model
16. Direct Selling is dominated by few numbers of
aggressive players
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
Integrated Infrastructure
Offline – Online Strategy
Pricing Strategy
Partnerships
17. Marketplaces are the key players in shaping
eCommerce
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
3,642,894
3,000,000
1,212,369
1,100,000
341,640
8,200
500,000
339,495
1,570,000
529,887
53,600 60,000 35,407
1,104,211
10,000
126,000
Source: PriceArea.com
# of Products % of Sellers
#7
Alexa Rank (Indonesia):
#12 #24 #42 #54 #96 #158 #217
19. Marketplace that differentiate by
market segmentation will win
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
Younger
shopkeepers
Matured,
Individuals,
Business
Females,
Housewives
Young,
Less savvy
shopkeepers
20. STARTUP ASIA 2013 THE STATE OF eCOMMERCE
SMB represents 99% of all
companies in Indonesia
40 MILLION
Small Medium Businesses
Retail Sales: USD 134 BILLION
Online: 0.7%
21. While others focus on Sellers,
Pricearea focus on Shoppers
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
2010 2012 2013
22. While others focus on Sellers,
Pricearea focus on Shoppers
STARTUP ASIA 2013 THE STATE OF eCOMMERCE
ONLINE CONSUMERS
RESEARCH ONLINE BEFORE PURCHASE
46.7%
Source: APJII, Indonesian Internet Profile
Internet Users are growing at 20% Y-Y
Internet users users grew to 74 Million, up from 60 Million in 2012
Up 73% from 1.04B in 2012
(graph) eCommerce sales growth in Indonesia: 2011 (104%), 2012 (85%), 2013 (71%), 2014 (45%), 2015 (37%), 2016 (26%), 2017 (22%)
Online retail sales will grow at x% from 2012 to 2017
By 2017, the eCommerce will account for xx% of Indonesia retail sales
Social commerce will grow by xx% per year, xx% shoppers willing to buy through social media
2013 has 74 million MACs, will double to 141 million in 2020
a potential, as more digital users are turning into mobile internet
Spread across 25 locations across Indonesia
Connected through digital technology
Users skip PC ownership stage directly to smartphones (mobile internet)
EC growth is driven by rapid growth in middle class spending and entry of high profile eCommerce players in the last 12-18 months
Affordable internet, mobile data even has weekly basis, Free Wi-Fi in most shops, cafés and restaurants
Xl will provide Free data plan starting Dec 2013
So how should multinational brands market to this rapidly growing Indonesian affluent consumer class? The most ubiquitous technology in the country has to be the mobile phone. There are already over 220 million active mobile phone subscriptions in the country, making the mobile penetration rate over 90%. Besides mobile phones, Indonesians are also quite active on social media sites. Over 47 million people in the country use Facebook, making it the website’s 4th largest user base. These users are also highly responsive to brand messaging. In a recent survey, 79% of Indonesian Facebook users said that they regularly check brands’ social networking pages for updates. Brands seeking to reach these consumers can do so effectively through engagement on their Facebook pages.
- 61Million smartphone users (16.6% penetration)
(graph) Leading online retail categories are Fashion, Bags and Shoes
Educating users, awareness of alternative ways to get products from online stores / sellers (COD, Escrow, Meet offline, etc)
Top 10 reasons. To summarize, online consumers don’t trust the site (afraid of fraud), its either poor service (high prices, product quality, inconvenience, don’t match offer, don’t match picture), the store don’t sell what they want (items not avail)
Shaping the industry
3000+ online stores recorded on PriceArea
Seller’s reputation
