The E-Commerce Industry in Indonesia That You Don't Need to Worry about

The use of the Internet and the high ownership of smartphone devices among the public do not necessarily make shopping activities online as a prima donna idea that can be realized instantly, the national economic driver that is hailed. In fact, the small number of transactions, payment methods that have not been maximized, and geographical factors that make the role of logistics are not easy, have haunted since this trend emerged until now and in the days ahead. However, there is a greater and nobler spirit to continue to strive for a more ideal ecosystem, namely the potential market for all parties involved to overcome various common challenges.

Core entities such as manufacturers, online platform, payment gateway, and logistics, managed to color the headlines of the latest developments in the industry E-commerce Homeland. Ideosource VP of Business Development Andrias Ekoyuono revealed that there are other supporting components outside of these things, such as marketing technology, analytics, traffic generator, and of course regulations from the government to create integrated services to realize the industry E-commerce which is more ideal.

“A holistic approach to single mindset that E-commerce this is a necessity that ultimately provides great benefits for the progress of all stakeholders. Starting from the government, large and small producers, investors, entrepreneurs E-commerce, supporting industry entrepreneurs E-commerce, to consumers of various layers," he said.

In a global scope, industry E-commerce the ideal continues to be pursued. Fundamental factors must be refined in order to support consumer confidence to change shopping habits offline menjadi online.

Meanwhile in Indonesia, market characteristics and geographical conditions present complex challenges in the logistics vertical. The lack of use of credit cards and the tendency to use the interbank transfer method, as well as government regulations that have not been firmly established, are also other challenges that need to be faced.

Because the market potential is large and tempting

China has transaction records online stood at 12,9% at the end of 2015, but the transaction figure has reached $589.61 billion, an increase of 33% compared to the previous year which was three times the Indonesian state budget. Current transaction online in Indonesia is still below 1% when compared to retail transactions, so the room for growth is still very large. Indonesia is still being watched by many players E-commerce both local and foreign due to its potential population even though the transaction value is currently “only” $75 million.

Having been in this industry for many years, MatahariMall CEO Hadi Wenas shared his opinion, “Currently E-commerce can be regarded as a new industry in Indonesia. Having said that, there is still much that can be improved from almost all of the above eight elements with the exception of penetration smartphone. In this case, Indonesian consumers, especially outside the island of Java, have the opportunity to leapfrog / beyond evolution order E-commerce who usually transact via desktop/laptop before transacting via mobile devices, directly transact via smartphone. "

There are two things that hope is able to face real challenges. The first is the acceleration of technology adoption by logistics service providers to provide more transparent data and increase logistics chain productivity. The second is the standardization of data transfers between logistics service providers and payment service providers, in addition to security reasons regarding transaction transparency, this also makes inter-bank transfers closer to real-time.

The issue in the logistics sector is no longer a secret, even the CEO of Pos Logistik Indonesia, Yan Hendry Jauwena, admits that this sector is less than ideal. It takes adjustment and a touch of qualified technology to be able to play a role in the industry E-commerce maximally.

“The solution is to arm everything with technology. [...] For E-commerce in Indonesia it's actually frontendis fine (online marketplace, etc). What needs to be set backendwhere logistics has a big enough influence,” he said when met by DailySocial at the event Echelon Indonesia 2016 some time ago.

If you really want to follow the steps of the industry E-commerce, Pos Logistik Indonesia may need to learn a little from SingPost (Singapore) about business culture in the digital era which is no longer the same today. SingPost itself has acquired several companies in the transportation, warehousing and logistics segments. While big players like FedEx and DHL are targeting the premium market, SingPost is positioning itself as a provider of affordable logistics solutions.

Maybe if you end up shopping later online has become a daily necessity, supply chain logistics need to be streamed by prioritizing speed and convenience, so that products can be delivered directly from the warehouse to consumers. Seeing this trend, what should be anticipated again is the demand for space warehouse which also increases.

In concept online-to-offline As a solution, MatahariMall makes 4.500 Indonesian Post offices spread across the archipelago as a point for customers to pick up, pay for, and return their groceries.

E-commerce is not a temporary trend

Seeing the obstacles that are indeed not easy to overcome, Andrias and Hadi agreed to consider it a challenge. No need to worry, both of them stated the same thing to make all parties aware that the utilization and development E-commerce is a long term opportunity.

"Don't let there be parties who are not aware of the use of its development" E-commerce This is on a medium-long term basis, thus pursuing short-term interests and sacrificing other components or parties of this ecosystem,” added Andrias.

On another occasion, Hadi said: “No need to worry. As a player E-commerce in Indonesia, I am very optimistic. Currently, many startups are engaged in technology, as well as large companies starting to penetrate the digital world. This is not because the trend is temporary, but because E-commerce have a positive chance in the long term.”