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Don’t miss out on Indonesia’s e-commerce

In 2013, Indonesia has a whopping 74.8 million internet users and counting. 61.7% of these online shoppers bought some of their clothes online in that same year. The e-commerce landscape in Indonesia presents ripe opportunities. The environment is very consumer-driven, with many channels that cater to the local demand. The internet has found widespread use among the consumers since prices of mobile devices trickled down due to competitive offers between service providers.

McKinsey and Co. states that Indonesians are not entirely comfortable with risk-taking and are often the late adopters of products and technologies. This behavior is illustrated by their preference for social networking websites and online forums. It is here where they may interact with other users, acquiring second opinions and and getting feedback before making a decision to buy.

Social networking websites help facilitate e-commerce. According to SingPost, social media had 27% of the nation’s e-commerce transactions in 2014.

That’s what local startups like LakuBgt and Onigi hopped on when they realized the potential it holds. Indonesians use digital marketing especially social media to sell on a regular basis. With over 69 million active users, it is an environment with plenty of prospects to be engaged.

Conventional websites too have seen success in Indonesia. Zalora has reported a large volume of sales coming from the rural areas of Indonesia. What they lack in the conveniences of urban areas, they find it online through these e-commerce companies. Lazada Indonesia deviated from their typical range and introduced more lifestyle products into catalogue to cater to the local market. In addition, reception was better when marketing campaigns were done using local language. Approachability is very important considering risk-averse Indonesian e-commerce shoppers. Thus, Japanese e-commerce website, Rakuten decided to introduce a localized subsidiary into the country and called themselves Rakuten Belanja Online.

Indonesian shoppers have also visited websites with more direct and personal interactions. Online marketplaces like Tokopedia provides platforms for consumers to open online stores. Kaskus, an online forum has almost 7 million registered users with almost 25 million unique visits monthly. Shoppers also use online classifieds such as OLX, which is home to the largest e-commerce community.

Challenges of e-commerce in Indonesia include the need for sophisticated logistic solutions and gaining trust. Vela Indonesia indicated that the local e-commerce shoppers have a preference for more personal forms of payments such as bank transfer and cash on delivery. However, multiple safe e-payment options and different modes of delivery can be introduced to protect the shoppers’ interest.

Online shopping has become more routine in recent times. Multiple channels with heavy traffic can mean good business with the right approach in digital marketing. Considering Indonesia, demand will only increase as product variety grows and as more users join these communities. The consumers’ aversions to risk will be a trivial concern when there is a properly crafted digital solutions.

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