Indosat Ooredoo Closes Cipika, E-Commerce Division Abolished
To signal a change in Indosat Ooredoo Digital's focus
Indosat Ooredoo has confirmed that it will close its Cipika e-commerce service on June 1 with the last transaction on May 22. Nevertheless, Cipika Play just updated a few months ago didn't close. Closing Cipika and transferring Dompetku's license to become a separate company, paypro, is a signal of a change in the focus of the Digital business unit which has been in charge of OTT-based products.
The Indosat Ooredoo Digital business unit was built as part of the trend of transforming telecommunication companies into technology companies that also have OTT assets. E-commerce services, payment services, services mobile advertising, incubator services, and a joint investment fund with Softbank are its supporting pillars. Now the focus has changed.
According to the information we received, they are now focusing on network development and digital service development through partnerships. Operational separation, as happened with PayPro, is said to be a strategic decision so that its movement is more agile and does not depend on the bureaucracy of big companies like Indosat Ooredoo.
Returning to Cipika, the e-commerce division is said to have been abolished. Employees in this division arelayoffs and some are transferred to another unit. Meanwhile, the employee who previously handled Dompetku was transferred to PayPro.
We also received confirmation that Carlos Karo Karo and Randy Pangalila, who previously led Cipika and Dompetku respectively, continue to work for Indosat Ooredoo.
This closure, while not surprising, could be the result of the pivot's failure to maintain the service.
In interview DailySocial with Indosat Ooredoo's Group Head Digital Strategy & Investments Usman Khan Lodhi late last year, he said:
“Now we have evolved with the platform and focused on wholesale transactions and try to take advantage of customer base. [Cipika will] do a little pivoting in terms of offering more favorable financial terms."
The e-commerce sector in Indonesia currently has stiff competition. In addition to Cipika, two other e-commerce services were established by telecommunications companies, namely Blanja (Telkom Group) and Elevenia (XL Axiata). We expect consolidation and downsizing will continue to occur so that only a limited number of players will remain.