0
THE STATE OF

eCOMMERCE INDONESIA
ANDRY SUHAILI
CEO, PRICEAREA.COM
STARTUP ASIA 2013

THE STATE OF eCOMMERCE
Current State
Government, Regulations – How Secure Are We?

The Rise of SMB & Marketplaces
Role of eCommerce Search Engine...
74.6 MILLION
Internet users in Indonesia
74.6

34.8

32.4
20.1

29.8%

36%

Indonesia Philippines

36%

Vietnam

Internet ...
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

In...
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: eMarke...
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

S...
Growth driven by Middle Class
Spending, Cheap Smartphones & Affordable
Internet

Source: The Boston Consulting Group, Marc...
Fashion and Females are
the TOP Products & Buyers Respectively
FEMALE

MALE
CLOTHING

39.1%

HANDPHONE

17.8%
16.9%

PLANE...
Trust is No.1 issue in online shopping in Indonesia
34.6%

AFRAID OF FRAUD

21.5%

TOUCH & FEEL THE ITEMS

21.5%

HIGH PRI...
Challenge in Payment and Delivery
57%
28%
8%
7%

BANK TRANSFER
CASH ON DELIVERY
OTHERS
CREDIT CARD

14.7 Million Credit Ca...
Indonesian Government defines eCommerce as:

“Electronic transaction is legal action which is done using
computer, compute...
Indonesian Government defines eCommerce as:

“Electronic transaction is legal action which is done using
computer, compute...
Associations like idEA helps facilitate the growth

www.idea.or.id

STARTUP ASIA 2013

THE STATE OF eCOMMERCE
Payment & Logistics

eCommerce Platforms

STARTUP ASIA 2013

THE STATE OF eCOMMERCE
2 Popular Business Model

Marketplace
•

C2C model

•

B2C model

•

B2B model

•

B2B2C model

Direct Selling
•

Consignm...
Direct Selling is dominated by few numbers of
aggressive players
Integrated Infrastructure

Pricing Strategy

Offline – On...
Marketplaces are the key players in shaping
eCommerce
3,642,894
3,000,000

# of Products

% of Sellers

1,570,000

1,212,3...
Competition is heating up

STARTUP ASIA 2013

THE STATE OF eCOMMERCE
Marketplace that differentiate by
market segmentation will win
Younger
shopkeepers

Matured,
Individuals,
Business

Young,...
40 MILLION
Small Medium Businesses
SMB represents 99% of all
companies in Indonesia

Retail Sales: USD 134 BILLION
Online:...
While others focus on Sellers,
Pricearea focus on Shoppers
2010

STARTUP ASIA 2013

2012

2013

THE STATE OF eCOMMERCE
While others focus on Sellers,
Pricearea focus on Shoppers

46.7%
ONLINE CONSUMERS
RESEARCH ONLINE BEFORE PURCHASE
Source:...
3000+ Online Stores

550,000+ Online Sellers
8.5 MILLION Products Listed

SELLER’S
INFORMATION

PAYMENT
INFORMATION

PRODU...
Thanks!

Andry Suhaili
CEO, PriceArea.com
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Startup Asia Jakarta 2013: State of e-commerce in Indonesia

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  • Based on Google's recent research on Indonesia online shoppers (2013):
    - Apparel is the most POPULAR products to buy online, followed by Mobile phones, Consumer electronics, Books, etc.
    - However, purchase PRICE for Consumer electronics is the highest, followed by Mobile phones and Apparel being the lowest.
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  • Is there any update data 2014 or 2013 ?

    8. Fashion and Females are the TOP Products & Buyers Respectively is based on 2012 data.
    Thank you
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  • Up 20% from 60M in 2012
  • 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
  • 2013 has 74 million MACs, will double to 141 million in 2020a potential, as more digital users are turning into mobile internetSpread across 25 locations across IndonesiaConnected through digital technologyUsers skip PC ownership stage directly to smartphones (mobile internet)EC growth is driven by rapid growth in middle class spending and entry of high profile eCommerce players in the last 12-18 monthsAffordable internet, mobile data even has weekly basis, Free Wi-Fi in most shops, cafés and restaurantsXl will provide Free data plan starting Dec 2013So how should multinational brands market to this rapidly growing Indonesian affluent consumer class? The most ubiquitous technology in the country has to be the mobile phone. There are already over 220 million active mobile phone subscriptions in the country, making the mobile penetration rate over 90%. Besides mobile phones, Indonesians are also quite active on social media sites. Over 47 million people in the country use Facebook, making it the website’s 4th largest user base. These users are also highly responsive to brand messaging. In a recent survey, 79% of Indonesian Facebook users said that they regularly check brands’ social networking pages for updates. Brands seeking to reach these consumers can do so effectively through engagement on their Facebook pages.- 61Million smartphone users (16.6% penetration)
  • (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 don’t trust the site (afraid of fraud), its either poor service (high prices, product quality, inconvenience, don’t match offer, don’t match picture), the store don’t sell what they want (items not avail)
  • -ROPO effect > recent study from Google…TaoBao in China partner with independent logistics…Online 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.id…
  • 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, etc…
  • They educate, facilitate technology transactions, introduce offline to online, …List 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.
  • We’re 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)
  • We’re 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 PriceAreaSeller’s reputation
  • Transcript of "Startup Asia Jakarta 2013: State of e-commerce in Indonesia"

    1. 1. THE STATE OF eCOMMERCE INDONESIA ANDRY SUHAILI CEO, PRICEAREA.COM STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    2. 2. Current State Government, Regulations – How Secure Are We? The Rise of SMB & Marketplaces Role of eCommerce Search Engine – PriceArea.com STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    3. 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. 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. 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. 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. 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. 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. 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 ANYONE’S LIKING 4.0% ITEMS DO NOT MATCH THE PICTURE Source: APJII, Indonesian Internet Profile, Dec 2012 STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    10. 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. 11. Indonesian Government defines eCommerce as: “Electronic transaction is legal action which is done using computer, computer network, and/or other electronic medias.” STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    12. 12. Indonesian Government defines eCommerce as: “Electronic transaction is legal action which is done using computer, computer network, and/or other electronic medias.” STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    13. 13. Associations like idEA helps facilitate the growth www.idea.or.id STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    14. 14. Payment & Logistics eCommerce Platforms STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    15. 15. 2 Popular Business Model Marketplace • C2C model • B2C model • B2B model • B2B2C model Direct Selling • Consignment model • Outright model • Dropship model STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    16. 16. Direct Selling is dominated by few numbers of aggressive players Integrated Infrastructure Pricing Strategy Offline – Online Strategy Partnerships STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    17. 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
    18. 18. Competition is heating up STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    19. 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. 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. 21. While others focus on Sellers, Pricearea focus on Shoppers 2010 STARTUP ASIA 2013 2012 2013 THE STATE OF eCOMMERCE
    22. 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. 23. 3000+ Online Stores 550,000+ Online Sellers 8.5 MILLION Products Listed SELLER’S INFORMATION PAYMENT INFORMATION PRODUCT INFORMATION SHIPPING INFORMATION SELLING PRICE OFFERS/ DISCOUNTS STARTUP ASIA 2013 THE STATE OF eCOMMERCE
    24. 24. Thanks! Andry Suhaili CEO, PriceArea.com
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