The Evolving Customer in Indonesia’s Growing Economy and E-Commerce Landscape
Our aCommerce Indonesia CEO Hadi Wenas was among Adrian Joezer, UBS Analyst, and Nicholas Vilmart, Chief Commercial Officer of FLASHiZ as a speaker at the UBS Investment Bank Conference. These are his juicy insights during the e-commerce UBS panel and UBS private wealth session:
The topic of e-commerce has generated much interest with UBS Wealth Management clients in the Retail/Consumer in Indonesia, yet most people still think that e-commerce works in only larger cities.
“This was the case two years ago, if you do the marketing right, 80% of your customers will be from outside big cities – which is good”
– Hadi Wenas
The appeal of online shopping is more access to brands. Consumers from outside the greater Jakarta area must wait three months for the latest Nikes unless they buy it online. Serving these customers also proves less troublesome; less complaints, lower number of returns, a lower cancellation rate, higher basket size and higher rate of satisfaction.
So what it takes to build a successful ecommerce?
- Sourcing: it is the most important thing and it can be outsourced.
- Marketing: online marketing is completely different from offline marketing. It is not about branding alone, but also number crunching. This requires specific skills to measure its actual impact.
- Operation: e-commerce warehousing is more like a store in which the display is virtual (website). It needs to serve a single order unlike the traditional warehouse whose daily KPI is delivering pallets of products.
- Technology: if clients want the product quick, it is better to outsource to experts.
What is the most popular products sold in ecommerce these days?
HW: In Indonesia, its gadgets, smartphones and fashion items. But in China, sex toys also made it to the top product categories. From this data, we can assume that people shop online for 3 things: convenience, access to popular brands and maintaining privacy. No embarrassment when shopping online.
Does ecommerce work for all kinds of product?
HW: It’s too early to tell as the Indonesian market is not fully e-commerce mature yet. If you want to try e-commerce, invest in technology before marketing and then tackle operations. In e-commerce, marketing is the most expensive – that’s why Google and Facebook keep getting richer.
Round Table Discussion: What Bottlenecks Throttle High Growth?
Attendees: Hadi Wenas, Magnus Ekbom (CEO Lazada Indonesia), Wilson Cuaca (Managing Partner of East Ventures), and Nicholas Vilmart
1. The Mindset of Business Owners
Most think that e-commerce is a short term investment but it’s not. They think by investing in e-commerce they can break even in three months but they’re undervaluing the execution skills required. The online world is a different game than offline and some of them join just because everybody is doing so.
2. New Players who Wants to Go Online
New players sometimes misunderstood e-commerce players as tech companies. Yes, it requires technology as a platform but most important is the good and unique products.