People Innovation Excellence

Capturing the Potentials of Indonesia’s E-Commerce Development

Based on eMarketer’s research results, the year 2015 will bring about more internet users worldwide, surpassing three billion. The number is expected to keep increasing. In its released report, eMarketer also predicted that Indonesia might race other Asian countries in terms of the number of internet users in 2017, and in 2018, nearly half of the total population of this country will use the internet. It is estimated that in the latter, the number of internet users in Indonesia will reach 123 million.

A portrait of internet usage as reported by the study is in fact a common sight and easily captured. Based on various researches, the number of internet users keeps increasing in a year-to-year basis, their number had even often surged.

This phenomenon is easily found too in the everyday life. The facts, as mentioned earlier, are inseparable from the development of information and communication technology (ICT) that has become increasingly sophisticated. People get in touch with each other using devices, such as mobile phone, tablet, and laptop.

It’s not hard to spot internet usage in the everyday activity of Indonesians, including buying and selling goods and services, which is more popular as e-commerce. E-commerce is a case that shows how the world’s technology development is strongly supported by today’s development of internet. As a consequence, the digital market is highly influenced by this progress.

Although not the only factor, the adoption internet in consumers’ everyday life is very frequently captured. The development is considered one of the major factors influencing recent changes in consumer behavior.

As Ina Agustini Murwani, MM, MBA., BINUS BUSINESS SCHOOL (BBS) lecturer for Creative Marketing, mentioned, this kind of condition is in fact unavoidable. Changes in consumer behaviour have become marketers’ homework in everchanging countries, such as Indonesia.

“Digital world development and its sophistications have influenced Indonesian consumer behaviour. In essence, things that had never crossed our mind before is now thinkable and even happen already. All of these were made possible by technology development,” said Ina

Based on current condition, Ina remarked that marketers will encounter changes, especially during market segmentation process. The process was initially based on traditional approach, but now uses online segmentation method.

Ina added further, current condition will bring about stiffer competition among marketers. It is a result of consumers who would not pay as much attention to the brand anymore. It is possible that they will pay more attention to products and services that suit best their wishes.

“In the worst-case scenarion, a brand might even fade away when it is not fully concerned by consumers. Competition between marketers will be more intense should this really happens,” Ina continued

Therefore, Ina suggested that marketers should not only focus on the brand they have created, but also begin thinking over factors, such as value proposition, back office, and, not the least, the concept.

Even so, Ina would not go so far as speculating that the online market condition in Indonesia is on a very mature stage. On the contrary, she observes that the market condition is, however, far from the mature stage of online shopping habit. Numerous gaps remains concerns to practitioners of online shopping business, one of them is that the online shopping culture has yet to reach the peak in terms of consumer number.

Building trust is the best way to describe present day condition of Indonesian consumers. They still do not fully believe in the process of online buying and selling. Furthermore, they are not familiar with the cashless payment facility. Cashless payment is not yet an established culture among Indonesians. They are more comfortable using cash for any payment. This too has influenced the development of Indonesian online market.

The same remark was made by the Head of Indonesia Market for AliExpress.com, Mulyono Xu. In his opinion, Indonesia’s market conditions has yet to reach a mature point in the process of online shopping. This view is supported by a fact that a large number of goods has flown in from China, home of AliExpress, to Indonesia through the traditional method, through the hands of import-export merchants.

“Although internet penetration and gadget adoption in Indonesia is rapidly growing, digital shopping culture is yet to be perfect here. The people stick to the more familiar way of traditional buying and selling,” said Mulyono.

Even so, Mulyono claims that Indonesian online market is, however, very potential. With a large number of population and high level of consumption, the chances of developing e-commerce industry in Indonesia is still wide open. To achieve this, Mulyono’s company is seriously working on Indonesian e-commerce market, one of his methods is to educate the people of Indonesia.

In other words, for the country’s e-commerce practitioners, Indonesia’s e-commerce potential is too good to waste. Mulyono advised marketers to work seriously on this potential. A major factor Mulyono highlighted is traffic. Traffic is crucial when someone wants to develop a digital market-based business. “Without good traffic, you can forget your success in the digital market,” Mulyono suggested.

Ina had the same level of confidence in the digital market. Unquestionably, in relation to the world of creative marketing with which she engages, Ina suggested that marketers who look forward to success in the digital market to stay true to the marketing discipline.

“Know your market, competitors, consumers, segmentation analysis by means of targeting and positioning process, including day-to-day operations. These factors should not be forgotten by any marketers trying to capture present day online market,” said Ina.

Most importantly, Ina emphasized the importance of consistency in running an online-based business. As she stated earlier, competition among marketers will grow more intense. Therefore, the development of digital world does not only open to great opportunities, but also impose to serious challenges to respond to.

To conclude, judging by a great potential this situation has brought about, it would be a pity if marketers do not seriously work on foreseen niche opportunities that may open into bigger cracks in the future. (RAW)


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