By Hendarsyah Tarmizi
\nThe Jakarta Post
\n
\nMore producers open on-line shops to reach buyers<\/p>\n
Many local furniture companies have turned to the Internet to
\nincrease sales. Although they mostly operate in remote locations,
\nin e-commerce, they are ahead of companies in other business
\nlines.<\/p>\n
By opening on-line outlets, the furniture companies not only
\nreduce sales promotion costs but also reach buyers all over the
\nworld.<\/p>\n
The number of local on-line furniture outlets could reach over
\n50. Internet portal Indonesia-furniture.com has more than 30
\nvendors. Dozens of other furniture companies have their stores
\ninstalled at other websites such as EastJava.com.<\/p>\n
Vendors featured on the website have production facilities
\nbased in various locations in West Java, Central Java and East
\nJava. Several others are based outside Java such as in Bali and
\nToraja in South Sulawesi.<\/p>\n
The type of furniture they sell also varies. PT Cahaya Sakti
\nMulti Intraco, which is based in Bogor, West Java, for example
\nsells knock-down furniture through its olympicfurniture.co.id.<\/p>\n
At the Indonesia-Furniture website, Graji Furniture, a
\nspecialist in rattan furniture based in Surakarta, Central Java,
\nsells a wide range of rattan furniture using materials such as
\nbanana leaf and the outer layer of rattan.<\/p>\n
Others such as Old Java, a teak furniture producer based in
\nBogor, West Java, sells its products through its own website at
\noldjava.com. The company displays indoor and outdoor teak
\nfurniture on the website.<\/p>\n
Old Java has reaped benefits from its website, which was
\nlaunched in August 2000 as a Business-to-Business (B2B) site to
\nallow customers in over 25 countries to order on-line.<\/p>\n
In addition to an on-line order system, the company also has
\nan on-line inventory. The company plans to upgrade the site by
\nadding on-line production, on-line shipping and on-line billing
\nto the website.<\/p>\n
\"This will enable us to fully automate all our business
\nprocesses and make us much more efficient and accurate, saving
\ntime and money,\" said Eko Sonata, who is in charge of the
\nwebsite.<\/p>\n
According to him, a large number of the furniture company's
\ncustomers have used the on-line order system since the launch of
\nthe website.<\/p>\n
\"Apart from its use by customers to process orders, we also
\nfrequently receive enquiries from around the world from
\nprospective customers, so in this way the site also acts as an
\nadvertising and marketing tool, although this is not its primary
\npurpose,\" Eko said.<\/p>\n
The company, which produces over 400 models of chairs, beds
\nand dining tables from reclaimed old teak, sets a minimum order
\nof one container for its customers.<\/p>\n
The Old Java website, which costs the company less than $1,000
\nper year to maintain, does not receive payment on-line. \"We do
\nnot plan to introduce on-line payment. We do not sell furniture
\non a retail basis and therefore credit card payments are not
\nappropriate for our business,\" he said.<\/p>\n
Like other local online shops, the furniture companies' on-
\nline outlets could still be categorized as semi-virtual
\nmarketplaces. They function merely as a medium to promote
\nproducts and to receive orders and to tell potential customers
\nabout the company. None offer on-line payment facilities.<\/p>\n
Despite these weakness, the furniture companies are, however,
\namong the first to take advantage of the Internet in selling
\ntheir products.<\/p>\n
In Indonesia, the security of on-line financial transactions
\nis one of a major problems in the nascent e-commerce industry.
\nThe slow growth of the industry has been blamed on the
\ngovernment's slow response in providing practical guidelines and
\nregulations.<\/p>\n
But analysts believe that the long-term prospects for e-
\ncommerce are quite promising.<\/p>\n
B2B e-commerce trade transaction in Indonesia is estimated to
\nincrease in volume 10 fold to US$500 million by 2003 from about
\n$50 million last year. The business-to-customer (B2C)
\ntransactions are projected to reach US$600 million by 2003,
\naccording to unofficial data.<\/p>\n
With the lack of legal protection, many trade-related websites
\nin the country have turned to conventional methods of payment.
\nCash on delivery payment is common, while for big purchases, the
\npayment is settled through bank transfer.<\/p>\n
Credit card payment is also used but the authorization is made
\nafter the goods reach the buyers. On-line shops which receive
\npayment in cash or through bank transfer are often referred as a
\nsemi-virtual companies.<\/p>\n
In the real world of e-commerce transactions, payment
\nalternatives commonly used are generally in the form of on-line
\ncredit cards and on-line checks.<\/p>\n
However to use such a payment system, the on-line shopping
\noperators have to invest a lot of money to procure reliable
\ntechnology to ensure secure transactions.<\/p>\n
In industrialized countries such as the United States, on-line
\nshopping has become part of people's lifestyle.<\/p>\n
According to an e-commerce report issued by CSIL an Italian-
\nbased international furniture research institute, the Internet is
\nexpected to play a mainly informative role in the furniture
\nindustry in the next five years.<\/p>\n
In fact, retail furniture sales through the Internet
\n(business-to-consumer) are not expected to grow significantly.
\nForecasts up to the year 2003 predict that on-line home furniture
\nsales will reach about 2 percent of the total furniture market in
\nthe U.S. and only 0.5 percent of the European one.<\/p>\n
In most industrial sectors the value of B2B turnover is much
\nhigher than that of B2C and the expectation is that the B2B area
\nwill claim at least 80 percent of the total value of future
\ntransactions in various sectors.<\/p>\n
In the furniture sector as well, the Internet will have an
\never more important role in the business-to-business area, both
\nfor the purchasing of raw materials, semi-finished products and
\ncomponents and for the furniture retailing system. As evidence of
\nthis trend some American websites, which were initially business-
\nto-consumer oriented, are now moving in the business-to-business
\ndirection.<\/p>",
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