Five e-commerce trends that are sure to boom in Indonesia.
on the booming e-commerce scene in Southeast Asia sets the tone just right for potential investors and entrepreneurs looking to strike gold. For those who are seriously interested in entering the region, they surely must set their eyes on the biggest and most important market: Indonesia.
Thanks to its 250 million population, anyone who is able to win the e-commerce game in Indonesia has already conquered 40 percent of Southeast Asia. This makes it the ideal spot to start an e-commerce empire. And thankfully, there’s still a lot of room for new players to come in.
As a keen observer and fellow budding player in Indonesia’s e-commerce scene, here’s my two cents on upcoming e-commerce trends that will dictate where the market will be in the next few years:
1. Merchants selling in multiple online channels seamlessly
This is the most obvious one we’ll see in emerging markets such as Indonesia. The nation still has highly fragmented online marketplace channels for merchants to set up shop.
Currently, however, it’s pretty tough to use all the available options to sell online in Indonesia. Merchants who use multiple channels in Indonesia have to keep a very close eye on their inventories and SKUs. They also need to deal with incoming messages on different platforms. In the end, merchants need to prioritize the channels which work best for them, and shut down all the others. This means running a lot of A/B tests.
Some players have tried tackling this in Indonesia by building a one-stop dashboard for merchants to sell across multiple platforms. However, given a high level of complexity in such solutions, many have proven unsuccessful.
Branch8 looks promising, as it lets merchants sell across different marketplaces in Asia, but it’s not yet localized for the Indonesian market. To really solve merchants’ problems in Indonesia, the startup must work with numerous local players such as Tokopedia, Bukalapak, Elevenia, Blanja, Blibli, and many more. The thing is, some of these local leaders may not even have a ready-made API to sync a new dashboard’s business process seamlessly. You need to get down and dirty to make this happen.
2. More ways for shoppers to get the lowest prices
Thanks to the internet, there are many ways shoppers in Indonesia can find the best online deals out there. First, they can use price comparison platforms such as PriceArea, Telunjuk, PricePanda, PriceBook, Priceza to name a few. Second, they can take up the lowest price guarantees offered by major e-shops such as Agoda or Lazada from time to time.
But after taking a look at what’s happening in the more saturated markets like the US and UK, it’s now just a matter of time before Indonesian shoppers find more ways to save their online spendings. For example, customers will be able to save on bigger basket sizes when shopping on Jet.com. There’s also Flubit in the UK. Customers can paste a link of the product they want into the field on these sites, and they’ll generate a better deal for the same exact same product.
Indonesian players would be wise to pay attention to such innovative solutions offered abroad, and find ways to adopt them for the local market. As a shopper, I will always be open to trying new products that can save me money.
3. Logistics services 2.0
The logistics infrastructure in Indonesia has its own sets of problems. For one, it’s still mostly run traditionally. The only feature sellers and shoppers can use digitally is the ability to track delivery status online. That’s it.
Not only that, Indonesia still has a huge problem when it comes to logistics reliability. A lot of packages get lost in between, and logistics firms have difficulty in handling a barrage of delivery orders during peak seasons. In response, various alternative logistics services have cropped up in Indonesia in the form of aCommerce (end-to-end ecommerce solution), HappyFresh (for groceries), Go-Jek (for couriers), and PopBox (parcel lockers). The partnership between SingPost and Trikomsel will also disrupt the market very soon.
Indonesians one day will be pampered with a slew of logistics options and technology. Sellers will no longer need to queue in long lines just to send that product, but to wait for pickups at designated places instead such. Logistics services will have an adequate back-end system which integrates with various e-shops. Buyers will be able to have more options for same day-delivery services as “Uber for logistics” commence.
4. Rapid mobile money adoption
Various players in Indonesia are trying to push more e-money solutions. Yes, this includes the government, as it too wants to save an annual cost of Rp 3 trillion to print, save, distribute, and destroy cash. At the moment, Indonesians can already pay for several public services such as bus transport, water, and electric billing using e-money.
Ideosource Managing Partner Andi S. Boediman believes Indonesia will become the second biggest mobile money user in the world. Much of this claim stems from how the government plans to distribute direct cash subsidies to underprivileged people via electronic money. If all goes according to plan, about 15 million underprivileged people in Indonesia will have adopted e-money by the end of this year.
Bank of Indonesia has also relaxed regulations in the e-money sector, allowing third parties to receive licenses to operate e-money businesses in the archipelago. It’s only a matter of time until Indonesia becomes one of the world’s sexiest markets for e-money, and we will still see more e-payment startups trying to ride this wave.
5. Merchants selling anonymously
This may sound weird at first, but hear me out.
From my costly experience competing with Lazada Indonesia in the past year, I came to realize that there is a need for merchants to sell product anonymously. Usually, retailers have to sign an agreement with manufacturers to sell products under the suggested retail price (MSRP). This is done to standardize the retail price, and avoid price wars between merchants.
But business is business. If you as a merchant can sell something for a profit, even if it’s under the MSRP, would you do it? Depending on the circumstances, some will say yes. For instance, a merchant would want to clear out their smartphone stock before the gadgets become obsolete (or if the manufacturer was about to launch a new phone).
Merchants, however, must be ready to be blacklisted if they are caught selling products under the MSRP. Although there are ways to sell via proxies or using aliases on C2C marketplaces, it’s not convenient at all.
There will come a time when someone tries to provide such a platform, where merchants can sell products at whatever price they wish, anonymously in a private ecosystem. In return, buyers will also get the best possible deals as merchants no longer hesitate to offer lower price tags. Naturally, the platform will need to handpick all the merchants who get to be anonymous in order to guarantee all listings are legitimate.