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Startup Asia Jakarta 2013: State of e-commerce in Indonesia
1. THE STATE OF
eCOMMERCE INDONESIA
ANDRY SUHAILI
CEO, PRICEAREA.COM
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
2. Current State
Government, Regulations â How Secure Are We?
The Rise of SMB & Marketplaces
Role of eCommerce Search Engine â PriceArea.com
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
3. 74.6 MILLION
Internet users in Indonesia
74.6
34.8
32.4
20.1
29.8%
36%
Indonesia Philippines
36%
Vietnam
Internet users (in million)
67%
Malaysia
104.2%
17.6
9.1
26.4%
Thailand
Singapore
% of penetration
Source: TechinAsia, November 2013
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
4. 20% Y-Y Growth
Internet users
102.8
93.4
83.6
74.6
59.6
43
33.0%
36.5%
39.8%
29.8%
24.0%
17.5%
2011
2012
2013
Internet users (in million)
2014
2015
2016
% of population
Source: eMarketer,March 2013
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
5. 4.6 MILLION
people have shopped online in 2013
8.7
7.4
5.9
4.6
3.1
2
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
$4.49
$3.56
$2.60
$1.80
$1.04
$0.56
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
FEMALE
MALE
CLOTHING
39.1%
HANDPHONE
17.8%
16.9%
PLANE TICKET
/SHOW
16.1%
LAPTOP &
ACCESSORIES
1.4%
11.0%
9.0%
8.8%
77.1%
2.1%
8.7%
3.8%
11.1%
BAGS
BOOKS
ELECTRONICS
SHOES
5.2%
2.2%
5.0%
Source: APJII, Indonesian Internet Profile, Dec 2012
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
9. Trust is No.1 issue in online shopping in Indonesia
34.6%
AFRAID OF FRAUD
21.5%
TOUCH & FEEL THE ITEMS
21.5%
HIGH PRICES
21.5%
NOT INTERESTED
9.3%
6.0%
5.2%
PRODUCT QUALITY NOT GUARANTEED
DO NOT KNOW HOW
NOT PRACTICAL
4.7%
ITEM DO NOT MATCH THE OFFER
4.1%
ITEMS NOT IN ACCORDANCE TO ANYONEâS LIKING
4.0%
ITEMS DO NOT MATCH THE PICTURE
Source: APJII, Indonesian Internet Profile, Dec 2012
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
10. Challenge in Payment and Delivery
57%
28%
8%
7%
BANK TRANSFER
CASH ON DELIVERY
OTHERS
CREDIT CARD
14.7 Million Credit Cards
(4.5% Penetration)
55%
39%
33%
28%
Only 3 providers are ready to
support logistics from online
shopping.
25%
25%
20%
5%
6%
3%
Indonesia Philippines Vietnam
Delivery
6%
9%
Malaysia Thailand Singapore
Payment
Source: Indonesia Credit Card Association, 2013, VelaAsia
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
11. Indonesian Government defines eCommerce as:
âElectronic transaction is legal action which is done using
computer, computer network, and/or other electronic medias.â
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
12. Indonesian Government defines eCommerce as:
âElectronic transaction is legal action which is done using
computer, computer network, and/or other electronic medias.â
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
13. Associations like idEA helps facilitate the growth
www.idea.or.id
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
15. 2 Popular Business Model
Marketplace
âą
C2C model
âą
B2C model
âą
B2B model
âą
B2B2C model
Direct Selling
âą
Consignment model
âą
Outright model
âą
Dropship model
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
16. Direct Selling is dominated by few numbers of
aggressive players
Integrated Infrastructure
Pricing Strategy
Offline â Online Strategy
Partnerships
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
17. Marketplaces are the key players in shaping
eCommerce
3,642,894
3,000,000
# of Products
% of Sellers
1,570,000
1,212,369
1,104,211
1,100,000
529,887
500,000
341,640
53,600
60,000
35,407
8,200
339,495
10,000
126,000
Alexa Rank (Indonesia):
#7
#12
#24
#42
#54
#96
#158
#217
Source: PriceArea.com
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
19. Marketplace that differentiate by
market segmentation will win
Younger
shopkeepers
Matured,
Individuals,
Business
Young,
Less savvy
shopkeepers
Females,
Housewives
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
20. 40 MILLION
Small Medium Businesses
SMB represents 99% of all
companies in Indonesia
Retail Sales: USD 134 BILLION
Online: 0.7%
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
21. While others focus on Sellers,
Pricearea focus on Shoppers
2010
STARTUP ASIA 2013
2012
2013
THE STATE OF eCOMMERCE
22. While others focus on Sellers,
Pricearea focus on Shoppers
46.7%
ONLINE CONSUMERS
RESEARCH ONLINE BEFORE PURCHASE
Source: APJII, Indonesian Internet Profile
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
23. 3000+ Online Stores
550,000+ Online Sellers
8.5 MILLION Products Listed
SELLERâS
INFORMATION
PAYMENT
INFORMATION
PRODUCT
INFORMATION
SHIPPING
INFORMATION
SELLING
PRICE
OFFERS/
DISCOUNTS
STARTUP ASIA 2013
THE STATE OF eCOMMERCE
Internet Users are growing at 20% Y-YInternet 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 2017By 2017, the eCommerce will account for xx% of Indonesia retail salesSocial commerce will grow by xx% per year, xx% shoppers willing to buy through social media
(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 donât trust the site (afraid of fraud), its either poor service (high prices, product quality, inconvenience, donât match offer, donât match picture), the store donât sell what they want (items not avail)
-ROPO effect > recent study from GoogleâŠTaoBao in China partner with independent logisticsâŠOnline payment (including credit card) use is extremely low across the regionLess than 5% shoppers pay online in IndonesiaOnly 19% of Indonesian customers received free delivery.
Government Regulation No.82Signed by President October 2012CertificationData centre > to protect from cyber crimeDomain .id > to protect from cyber crimePublic service? Foreign InvestmentStill a proposal by Secretary General of Ministry of TradeIf approved, online retail must be fully owned by Indonesian citizenship or Foreign must open a 2,000 square meters store/warehouse.BKPM has closed application from foreign investors
Currently accepting registration from SMEsSite: www.idea.or.idâŠ
Why B2C not the right term to define some existing eCommerce playersOnline platform as mediatorTake commissions for providing the service / transactionTokobagus, Tokopedia, Kaskus, Bukakapak, EleveniaConsignment:Store products in warehouseUnsold products can be returned to suppliersLazada, BlibliYes, we have vertical, classified, auction, deals, etcâŠ
They educate, facilitate technology transactions, introduce offline to online, âŠList of Top 9 online marketplacesCompetition is heating upYear 2011-2015 will still about getting people (offline retailers & SMEs) to start selling online
Tokopedia: Younger shopkeepersTokobagus & Berniaga: Matured individuals, Kaskus: Young, but less savvy shopkeepers, Qoo10: SMEs & HousewivesBukaLapak: CommunityIndonetwork: Business/manufacture/industry
Products that are not available in the malls. Unique alternative and cheap.e-commerce in Indonesia is an ecosystem of "Many people, making little moneyAlibaba, Taobao, Tmall has successfully activated small offline companies to online.
Weâre here because we understand that 46.7% of online consumers research online before purchaseSo if you don't have online presence or a website, that means you are losing that 46.7% potential customersTo bring the best information on products, sellers and prices.Accommodate multichannel shoppers (jump around different sites because unsure which is the best)
Weâre here because we understand that 46.7% of online consumers research online before purchaseSo if you don't have online presence or a website, that means you are losing that 46.7% potential customersTo bring the best information on products, sellers and prices.Accommodate multichannel shoppers (jump around different sites because unsure which is the best)
Shaping the industry3000+ online stores recorded on PriceAreaSellerâs reputation