By Christ Tumelap<\/p>\n
Few takers for online shopping<\/p>\n
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\nDespite the high expectations on the country, which has been
\npraised by Internet analysts as a enormous potential market, the
\ngrowth of e-commerce in Indonesia has been slow.
\n---------------------------------------------------------<\/p>\n
JAKARTA (JP): The number of people who use Internet might
\ndouble to four million this year, thanks to the mushrooming of
\ncheap Internet kiosks. But only a few actually make online
\ntransactions with virtual or \"brick and mortar\" shops on the
\nInternet.<\/p>\n
A recent survey of 1,500 people in 10 major cities across the
\ncountry who are familiar with the Internet showed that 88.4
\npercent of the respondents, who knew about Internet transactions,
\nonly 16.3 percent had ever bought or paid for things online.<\/p>\n
The survey, jointly conducted by the Association of Internet
\nService Providers (APJII) and the Indonesian Internet Business
\nCommunity, found the rest of the respondents were unwilling to do
\nonline transactions because they were afraid their credit cards
\nmight be misused or that the paid goods would never arrive on
\ntheir doorsteps.<\/p>\n
Arifudin, acting secretary-general of the Indonesian
\nTelecommunications Society (Mastel), conceded that the growth of
\ne-commerce in Indonesia was still unsatisfactory.<\/p>\n
\"Its not quite like we expected and its mainly due to the
\nabsence of adequate infrastructure,\" he told The Jakarta Post.<\/p>\n
\"A bloody expensive stuff that does not work,\" that is perhaps
\nthe most common expression you may hear from many computer owners
\nand Internet users here on the quality of Internet access in this
\ncountry.<\/p>\n
They cannot be blamed for being sarcastic because the quality
\nof Internet connection here is indeed expensive and
\nunsatisfactory. Indonesia's Internet access fee is among the
\nhighest in the world.<\/p>\n
In APJII's survey, nearly three-quarters of users complained
\nabout access difficulties, long browsing or downloading times,
\nand frequent line disconnection.<\/p>\n
The poor Internet connection is due to the bad quality of
\ntelephone lines in this country. Most telephone lines here are
\nstill the old-fashioned copper cables, whose transmission speed
\nis limited to 144 kilobytes per second.<\/p>\n
Only a few areas in Jakarta use fiber optic cables, which can
\nboost transmission speeds to 4.8 gigabytes per second.<\/p>\n
Worse, with the copper cables, telephone users are charged
\npainful usage costs on top of the monthly subscription fee. In
\nthe United States and many other countries, telephone users are
\nonly charged the monthly subscription fee.<\/p>\n
Although they are a basic infrastructure, there are not enough
\ntelephone lines here. Indonesia only has two to three telephones
\nper 100 people, while Malaysia has over 20 telephones, Thailand
\neight to nine telephones and the Philippines two to four
\ntelephones per 100 people.<\/p>\n
While not many people in Indonesia have access to or can
\nafford telephones, there are even fewer who can afford computers
\nor Internet access. PC penetration in the country today still
\nsits in a single digit. In big cities, there may be five PCs for
\neach 100 households, but in rural areas, it is doubtful whether
\neven one PC is available in each of the villages.<\/p>\n
Faithless market<\/p>\n
For most Internet users, the security of payments made over
\nthe Internet is the most sensitive issue. Many still don't trust
\nthe online security system nor the Secure Electronic Transaction
\nmethod which claims to guarantee the security online
\ntransactions.<\/p>\n
Although experts insist that credit card payments made via the
\nInternet is far safer than a direct credit caard transaction
\nwhere the sales person has direct access to the card, many people
\nare still not confident of conducting online payments.<\/p>\n
There is no need to look further for examples of online crimes
\nas Indonesians are also notorious for credit card fraud.<\/p>\n
American person-to-person auction payment service company
\nBidPay.com announced last year that it had uncovered a large
\nIndonesian group using stolen identities to defraud users of
\nonline auction sites such as eBay.com , Yahoo.com, Amazon.com
\nand MSN.com.<\/p>\n
\"It is believed that the Indonesian fraud ring consists of
\nabout 20 people who run the scam on a full-time basis. The group
\nis hiding behind phony domain registrations and is using stolen
\ncredit cards to target various websites,\" BidPay said.<\/p>\n
Local mobile telephone trader Global Teleshop last year
\nstarted selling their goods through the Internet but asked
\ncustomers to pay by cash on delivery. The company said it
\npreferred cash payment to avoid fake or overdue credit cards.<\/p>\n
The immediate enactment of a cyber law will be the most
\neffective way to lessen customers' hesitancy to engage in online
\ntransactions. Without any legal framework, e-commerce will move
\nslowly.<\/p>\n
Internet players and experts want the government to apply a
\nsomewhat \"hands-off\" policy in dealing with Internet use in order
\nto motivate the growth of online communities. But on the other
\nhand, they insist that a proper cyber law must be implemented to
\nprovide the online community legal protection.<\/p>\n
The House of Representatives (DPR) has been mulling over
\nseveral laws on e-commerce, such as the Computer Misuse Act,
\nElectronic Protection Act, and Electronic Payment and
\nCertification Authority.<\/p>\n
However, the government has been taking a laid back attitude,
\ninsisting that the current criminal laws are sufficient to handle
\ne-crimes.<\/p>\n
The lack of a security system and the absence of adequate
\nlegal protection have prompted many trade-related websites to
\nturn to the conventional method of payment to cater to demands.<\/p>\n
Cash on delivery payment is the most commonly used, while for
\nbig purchases, payments are made through bank transfers.<\/p>\n
According to Joseph Widyanta SA, head of sales and marketing
\ndepartment of GlodokShop, operating as a semivirtual shop may be
\nthe best solution for local online traders to cope with the
\npayment problem.<\/p>\n
\"It is not only the customers who fear being cheated, traders
\nhave the same problem,\" Joseph told the Post.<\/p>\n
Currently, where the e-commerce market is still relatively
\nsmall, investing a lot of money in the security infrastructure is
\nnot feasible.<\/p>\n
President and CEO of Lipposhop Teddy Setiawan said recently
\nthat most of the company's 200 individual customers and 5,000
\ncorporate customers made their orders via telephone.<\/p>\n
\"Only 20 percent of our customers both make orders and pay for
\nthem online,\" he said.<\/p>\n
B2B<\/p>\n
Corporate users have benefited more from e-commerce than
\nindividuals because they are mentally and technologically ready.
\nCompanies understand the importance of adopting Internet and
\nonline payment to make their businesses more efficient.<\/p>\n
According to e-commerce expert Onno W. Purbo, the small and
\nmedium enterprises (SMEs) have been enjoying the most of e-
\ncommerce's advantages.<\/p>\n
\"SMEs find e-commerce very helpful in cutting advertising and
\ncommunication costs, and at the same time, nailing more
\ncustomers,\" he said. \"The way I see it, the B2C online
\ntransactions undertaken by e-retailers will continue to see a
\nslow growth while the B2B e-trading done by SMEs will keep
\nincreasing rapidly.\"<\/p>\n
There is currently more business-to-customer (B2C) e-commerce
\nproviders than business-to-business (B2B) players. B2C players
\ninclude Sanur.co.id, Gramedia CyberStore and Lelang2000.<\/p>\n
The B2Bs include textile e-trading nexiaonline.com, pulp and
\npaper network epulpaper.com and Sinar Mas Group's
\ntradealliance.com.<\/p>\n
Most of B2C and B2B providers are actually brick and mortar
\ncompanies, meaning they first started as physical companies and
\nlater expanded their sales and distributions through the
\nInternet.<\/p>\n
Given the slow response from the market, the revenue volume
\nfrom online transactions gained by e-traders is low.<\/p>\n
Forrester Research said e-commerce transactions in Indonesia
\nlast year amounted to only US$100 million, compared to global
\ntransactions of $390 billion. The B2B transactions contributed to
\nmost of the figure.<\/p>\n
He believes that if the country can work harder to fix the
\ninfrastructure problems, Indonesian e-commerce can stand at an
\nequal level with other emerging Asian e-markets in the next five
\nyears.<\/p>\n
Today, the most popular e-commerce used here is probably e-
\nbanking. Several banks, including Bank Central Asia (BCA), Bank
\nInternasional Indonesia (BII), Bank Bali and Bank Mega, have
\nstarted e-banking as an alternative way of banking.<\/p>\n
Their e-banking services, however, are still very limited and
\ncan only be accessed by their own customers. BCA said nearly half
\nof its customers used e-banking facilities to check their account
\nbalance and only fewer used it for payments or transactions.<\/p>\n
Many experts predict e-banking will be boom within the next
\ntwo to three years as by then the public's confidence in e-
\ncommerce would have grown. However, that can only come true if
\nmore customers can overcome their fear of making transactions
\nonline.<\/p>",
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