1. Startups

Indonesian E-commerce Business Momentum in 2023

Despite the closure of a number of platforms, there is still room for development.

In the last 15 years, about 15 services E-commerce the middle and large classes in Indonesia were forced to close because they could not survive in the rigors of business competition. Elevenia went out of business last December 2022, meanwhile JD.ID will stop all of its business operations in Indonesia as of next March.

Entering 2023, only Shopee and Tokopedia will dominate the big companies which are targeting the C2C segment, while Blibli and Lazada are in the B2C segment. Entering 2023, how is the business momentum for marketplace services?

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The automation technology platform that collects data on e-commerce services, Compas, provides a glimpse into the domination of Shopee and Tokopedia in Indonesia.

"The advantages of the two marketplaces from the start have been the focus on the target market they are targeting. Shopee with women and Tokopedia which focus on selling gadgets. This image is attached to each customer from the two marketplaces," said Compas CEO Hanindia Narendrata.

Based on Indonesia FMCG E-Commerce Report 2022 released by Compass, Shopee and Tokopedia are the top two favorite marketplaces for Indonesians. As of November 2022, market share Shopee for the FMCG category is superior to Tokopedia. In addition, the share distribution for the FMCG category on Shopee and Tokopedia is quite different.

Beauty & Care dominates Shopee, while the Health category is controlled by Tokopedia. This difference shows the focus chosen by the two marketplaces. Taking advantage of people's shopping trends, especially women, is Shopee's secret for this success.

Compass reports on e-commerce / Compass product categories

Regarding Blibli, according to Hanindia, this company owns The roadmap a solid foundation by integrating online and offline experiences through e-commerce services and physical stores for some of the leading brand partners. Blibli currently has unified omnichannel ecosystem which is referred to as Blibli Tiket consists of Blibli entities, tiket.com, and Ranch Market. The company has done IPO last year 2022.

"In my opinion, Blibli played well long term game. Companies with their level of thinking are already on profitability. Supported by the Djarum Group, currently their focus is not only on gadget products but have also started to penetrate Home & Living," said Hanindia.

Regarding Lazada's potential this year, Hanindia said he still had difficulty seeing opportunities for this service. One of the reasons is the different cultures and changes that are constantly happening internally.

As one of Alibaba's giant e-commerce service portfolios, Lazada has plans to collaborate with other Alibaba subsidiaries in Indonesia, including developing logistics services and developing warehouse managed independently.

Technological innovation

LazBeauty is one of the newest Lazada / Lazada channels

Lazada Indonesia Executive Director Ferry Kusnowo said, as one of the leading e-commerce companies in Southeast Asia, Lazada continues to innovate based on technology to develop its business.

Today companies use artificial intelligence technology or artificial intelligence (AI) to speed up the process of shipping goods and utilize chatbot technology to answer various consumer questions. Enterprise data intelligence is claimed to help sales partners target audiences more accurately and increase conversions.

The use of Augmented Reality (AR) also enhances the experience for buyers. Lazada's AR technology allows users to try beauty products online real-time with real results.

The company is also working to improve the omnichannel experience with various integrated features, including features live commerce LazLive and offline stores.

When mentioned about Lazada's strategy with increasingly massive services Direct-to-Consumer (D2C) today, companies are embracing the D2C trend and are continuing to push for collaboration with para seller.

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"We hope this growth trend will continue. We wish to continue to grow and run sustainable business operations through our main strengths: e-commerce, technology and logistics," said Ferry.

The report released by Lazada Sponsored Solutions (LSS) is titled Transforming Southeast Asia: From Discovery to Delivery found that 57% of consumers in Southeast Asia search for products directly through e-commerce platforms. This makes the e-commerce platform a new search engine. Even though there are predictions of a slowdown and consumers will tend to be more careful when shopping, the purchasing power of Indonesian consumers is expected to remain stable and has the potential to have a growth trend.

Meanwhile, according to Tokopedia VP Marketplace Yudhiaji Cahya Kusuma, Tokopedia continues to transform into a super ecosystem. They claim the number of sellers on Tokopedia has increased from 7,3 million (February 2020) to around 12 million today.

On the other hand, Tokopedia is intensifying initiatives hyperlocal applying technology geotagging to bring buyers closer to sellers wherever they are. This program aims to enable buyers to get the products they need more quickly and efficiently and that MSMEs have the same opportunity to grow and develop without having to move to big cities.

"We believe collaboration and innovation are the keys to adapting in the midst of the digitalization era while at the same time making MSMEs more empowered and victorious to respond to the challenges of changing times."
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