E-commerce here like a baby learning to walk<\/p>\n
Mahendra Gautama, Contributor, Jakarta<\/p>\n
E-commerce in Indonesia was pioneered by Sanur online
\nbookstore website, at www.sanur.co.id. Mimicking the business
\nideas and strategies of Amazon.com, Sanur is the vanguard for e-
\ncommerce here and is paving the way for other companies wishing
\nto enter the business.<\/p>\n
Its latest data indicates that with its collection of 30,000
\ntitles, Sanur has enjoyed about 2,500 transactions from its
\n11,000 customers.<\/p>\n
One significant factor that boosted the establishment of e-
\ncommerce here in its early stages several years ago was a
\nphenomenon often referred to as \"the gold rush of the Internet
\nworld\" or \"Internet crazy\".<\/p>\n
The phenomenon was based on the successful businesses of
\ndotcom companies, whose prices of shares went up skyhigh on the
\nNasdaq stock exchange. This also led to many businesspeople or
\nentrepreneurs here to start up their own e-commerce sites, albeit
\na few years later. Unfortunately, the golden days did not last
\nlong, as in April 2000 the price of shares crumbled and soon
\nwarning bells of impending death started ringing worldwide,
\nincluding here.<\/p>\n
One high profile e-commerce company here, Lipposhop.com,
\nalthough equipped with the latest technology and manned by
\nprofessionals, also had to close shop at a loss. Others followed
\nsuit, such as ojolali.com and indomall.com.<\/p>\n
Among the remaining e-commerce players here it seems that they
\nmostly deal in products and services that are largely related
\nwith computer hardware and the like. Bhinneka.com and
\npalingmurah.com are in this category, while indokado.com and
\nindoflorists.com supply gifts or giveaways and flowers
\nrespectively. Electronic equipment and products to a certain
\nextent are offered by glodokshop.com, agissuperstore.com and
\ntokolog.com<\/p>\n
E-commerce in Indonesia is basically divided into three
\ncategories.<\/p>\n
The first category is usually called a merchant or an online
\nseller or, in the Internet lingo, e-tailing. The websites
\nmentioned earlier as well as Radioclick.com are grouped into this
\ntype.<\/p>\n
The second one is called the payment gateway, which is usually
\na bank or a company affiliated with financing companies.
\nCommerce.net.id is one example that fits this description.
\nHowever, at the end of the Internet gold rush, this company also
\nwent belly up.<\/p>\n
The technology provider is the last in the category, which
\nincludes, as the name implies, companies that provide the
\ntechnology required for e-commerce such as hosting, shopping
\ncarts, designing and security. Here, Techscape.com,
\nIndoglobal.com and indosite.com are some of the leading names in
\nthis category.<\/p>\n
Technology- and design-wise, e-commerce here is relatively
\nadvanced. However, with the limited funds invested and the
\ncomparatively smaller market in Indonesia vis-a-vis even
\nneighboring countries let alone the Western ones, like the giant
\nAmazon.com, the country's e-commerce looks much paler.<\/p>\n
On the level of technology utilized by domestic companies, the
\nuse of SSL by Twathe or Verisign for consumers' data protection
\nduring online transactions shows that the companies here have
\nkept up with most of the recent developments. Some websites, like
\ntokolog.com or indokado.com, even have features like the shopping
\ncart, which is a navigational function for customer convenience
\nwhen shopping online.<\/p>\n
Still, most of the e-commerce companies here have yet to adopt
\nthe marketing strategies effectively used by their counterparts
\nin Western countries, such as maintaining customer loyalty, by,
\namong other means, offering consumers with reward points or other
\npromotions. In order to be successful, e-commerce, like any other
\nbusiness today, has to be based on marketing savvy that includes
\nsmart and creative advertising and promotional activities.<\/p>\n
Compared to the global turnover of e-commerce, Indonesia's is
\ncurrently only a small fraction. Forrester Research, one of the
\nworld's leading research companies, reported in 2000 that the
\ncountry's total figure, US$100 million, was a mere 0.026 percent
\nof the world's e-commerce transactions.<\/p>\n
The figure for 2003 saw a substantial increase, $1.2 billion,
\nwhich is still a far cry from the world's e-commerce mindboggling
\ntotal of $6.6 trillion.<\/p>\n
The low figure of e-commerce transactions here may be
\nattributed to several factors.<\/p>\n
First and foremost is consumers are extremely concerned about
\nthe security aspects of online shopping. Research conducted by
\nIpsos Public Affairs reveals that 70 percent totally distrust
\nthis mode of shopping. Some 72 percent fear that their private
\ninformation might be transferred or sold to a third party. About
\n66 percent think that their personal data might be stolen that
\nmay give away all the secure data of their credit cards. Lastly,
\nmore than 57 percent worry about junk mail that they will most
\nprobably receive.<\/p>\n
Telecommunications infrastructure, meaning telephone lines,
\ndial-up systems mostly used here and so forth, is another problem
\nthat affects the Internet users in Indonesia. To date, high-speed
\nconnections for the Internet, such as cable or ADSL, are
\navailable in business districts or luxury apartment buildings and
\nhousing complexes.<\/p>\n
Given that the cost of such connections (far higher than
\nWestern countries or other ASEAN countries for some reason) are
\nonly affordable for high-income people. Hence, the report issued
\nrecently by Gartner Research comes as no surprise. It said
\nIndonesia -- the world's fourth most populous country -- has the
\nlowest penetration of the Internet: only 6 percent of 220 million
\npeople.<\/p>\n
Next critical factor is associated with the lifestyle,
\nattitudes and mindsets of Indonesians, in fact, very much related
\nto their culture.<\/p>\n
While for decades consumers in developed countries have been
\nused to mail-order or purchasing through catalogs, shopping for
\nIndonesians is totally another type of activity.<\/p>\n
Shopping is regarded by many here to include a real form of
\nrecreation. They prefer the physical element, using all their
\nsenses before deciding on a purchase. Add to this their
\npreference of watching and listening rather than reading, one can
\neasily understand why e-commerce still faces various obstacles,
\nespecially this basic one.<\/p>\n
Based on the continuous growth enjoyed by e-commerce
\nworldwide, like other kinds of lifestyles, it is correctly
\nestimated by many observers that the success elsewhere will be
\ncontagious here as well. Some of the players say that the
\nsituation is like \"a baby taking its first few steps\". Further
\ngrowth is certain and it is not too far away, they add, as long
\nas they can match the requirement of the market here along with
\nsome of its peculiarities.<\/p>",
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