Telco and E-commerce, New Definition of Telecommerce in Indonesia

As a country mobile-first with the number of connection users mobile devices more than the population, 326 million users vs. 255 million people, Indonesia's telecommunications providers are in the best position to shape the future E-commerce and mobile commerce in Indonesia.

However, although the telecommunications sector contributes 3,14% of total GDP in Indonesia in 2014, placing the market mobile devices in Indonesia as the fourth largest and in the top 10 of the 3G market, what is the position of the telecommunications giant in the midst of rampant spending? online in this area?

From telecommunications to 'telecommerce'

Traditionally, companies telco was one of the few who had direct access to customers. But along with boominghis e-commerce, things are slowly changing. The telecommunications sector in Indonesia is dominated by three major players; Telkom, Indosat Ooredoo and XL Axiata, which earned 80% of the total market share in Indonesia.

These three companies did not miss the opportunity to help build the sector E-commerce in the archipelago, either through investment or strategic partnerships. Below is snapshot landscape company telco in Indonesia and their participation in building companies telecommerce.

Telkom x eBay: Blanja.com

State-owned 52.6%, Telkom owns the network and is the largest telecommunications service provider in Indonesia. Telkomsel, subsidiaries for service providers mobile have control of 46% of the total market share in Indonesia with more than 152 million users.

Since 2009, the company has ventured into the space E-commerce local by investing $5 million in a company E-commerce named Plasa.com. Plasa.com later turned into a project under MetraPlasa and merged with Blanja.com, a joint venture of Telkom and eBay launched in 2012.

After the partnership was established, eBay injected $9.2 million into marketplace this, giving eBay 49% ownership and 51% for Telkom. In addition to, partnerships it also allows merchant at Blanja can easily market their products on a global scale and at a lower price through an eBay connection.

As a sign of their commitment to participate in this industry, last April Telkom through subsidiary-its company, TelkomMetra, and eBay invested fresh funds of $25 million to Blanja. This funding will be led by Telkom, which will contribute 60% or around $15 million. Blanja has recorded a transaction value of $35 million in 2015 and is currently ranked #198 for Web traffic in Indonesia based on data from SimilarWeb. Blanja is currently led by CEO Aulio Marinto.

However, even with all those resources at their disposal, the site's growth marketplace This is still lagging behind its competitors such as Tokopedia and Lazada. This is also thought to be caused by the restrictions set for its vendors, such as the requirement to have official government permit to register at website and prohibition of selling goods second hand.

Indosat Ooredoo: Cipika Store

The second largest telecommunications company in Indonesia has 69.8 million users Dalam his. Established as a state-owned company, Indosat acquired by the telecommunication company from Qatar, Ooredoo Group, in 2009 and later changed its name to Indosat Ooredoo in 2015. Currently the government only holds 14.29% stake in Indosat. Earlier this year, the company also announced partnership with IBM to develop and provide solutions to platform IBM, Bluemix.

Through its subsidiary, IM2, Indosat has launched a marketplace which is called ShopOn in 2012. In 2014, marketplace this then moves to a e-commerce platforms with a new name, Cipika Store, which sells local Indonesian culinary and handicrafts. Since then, several new categories have also been added in marketplace this; lifestyle, gadgets, home and entertainment, books and games. Platform it also allows people to buy wholesale products at lower prices.

This site is ranked #4166 in Indonesia based on SimilarWeb data, trailing far behind the two companies "telecommerce" other. While not selling the exact same products, the site faces competition from Qlapa and KedaiKuka in the Indonesian local product category and players like Lazada and Tokopedia in other categories.

XL Axiata x SK Planet: Elevenia

XL is the first private company in Indonesia to provide cellular telephone services which was originally a trading and general services company. In 2009 this company was bought by Axiata Group and since then changed its name and logo to XL Axiata. As of March 2016 XL Axiata has 42.5 million users, down 19% from 52.1 million users in March 2015.

In 2013, Elevenia launched as a joint venture between XL Axiata and SK Planet, a Korean telecommunications operator. The initial investment made was $18.3 million, with the two companies sharing ownership fifty-fifty. Led by James Lee as CEO, the total investment that has been pocketed by marketplace this to date is $110 million, placing it as one of the top five startups most funded in Indonesia.

Since the beginning of her existence nearly three years ago, Elevenia has been trying to differentiate herself from marketplace another with point system and rewards for sellers and buyers. Sellers can use the points collected to increase their sales with things like ad placement and providing discounts for buyers. Elevenia also provides educational facilities for sellers in their 'Seller Zone' section.

Compared to company "telecommerce" As mentioned above, Elevenia is the best performing so far with revenue of $95 million (1.3 trillion IDR) in 2015. The site is ranked #21 in Indonesia and they project a potential five times sales growth in 2016.

Build an ecosystem

Enter the realm E-commerce is just one way for these telecommunications companies to make the most of the resources at their fingertips. It is evident that having direct access to users is not enough to ensure their success in the retail world online.

telco need to leverage their network even more to increase business success E-commerce they. The latest news about the participation of MDI, Telkom's venture capital, in latest funding for e-commerce-enabler aCommerce is one way to build an ecosystem E-commerce sustainable.

There are still many changes that need to be implemented in order for the transition to  'telecommerce' can succeed. Given that Cipika Store's target market is niche, it will be difficult to enlarge the business (scale up) without spending a lot of money to get more users. The restrictions imposed due to its association with the government are one of the reasons why Blanja's growth is not optimal, even though Telkom has more than three times more users than XL Axiata. XL Axiata meanwhile has a portfolio E-commerce the most successful of the three E-commerce above, possibly due to the unique value offered marketplace this to both the seller and the customer.

E-commerce Indonesia is still in the early stages of a long “marathon race”, and while now trailing big players such as Lazada and Tokopedia, there are still many rounds to go for these companies to improve their position before hitting the line. finish.

- Disclosure: This article was written by Rara Kinasih after being edited. The original article can be accessed HERE.

This article is a collaboration between DailySocial and eCommerceIQ.