Four roads to e-commerce development in RI<\/p>\n
By Christiani Tumelap<\/p>\n
JAKARTA (JP): E-commerce was only beginning to be discussed by
\ncertain interest groups here in 1995, when the worldwide web had
\nalready become popular and useful for many companies in the
\nUnited States.<\/p>\n
There are various economic and social factors hampering the
\nintroduction of Internet use and Internet trade in Indonesia. The
\ncountry is lacking a solid and clear vision, or a plan of action
\nto boost the development of e-commerce, according to keen
\nobserver in telecommunications, Risa Bhinekawati.<\/p>\n
Risa, who is the executive director of the Indonesian
\nTelecommunications Society (MASTEL), believes that Indonesia will
\neventually enjoy the benefits of e-commerce, if the government
\nand concerned parties speed up the establishment of required
\ninfrastructures.<\/p>\n
MASTEL is an open and independent organization of
\ntelecommunications executives from the private and public
\nsectors.<\/p>\n
Risa, who joined MASTEL in early 1997, took a year off in 1998
\nwhen she was awarded the Australian Merdeka Fellowship to pursue
\nan MBA degree in Managing in Asia at the Australian National
\nUniversity. In 1999, Risa returned to continue her work at
\nMASTEL.<\/p>\n
In a recent interview conducted by e-mail, Risa, 34, shared
\nwith The Jakarta Post her analysis of and recommendations for
\nbetter and faster e-commerce service in Indonesia.<\/p>\n
Question: How do you describe the current state of e-commerce
\npractices in Indonesia?<\/p>\n
Answer: E-commerce is still at an early stage of development
\nhere although the trend is very promising as the growth of
\nInternet connections and domain names (website addresses) is
\npredicted to exceed 100 percent in the next few years.<\/p>\n
So far, there is no total e-commerce system in place as
\nbanking settlements are still done traditionally. The Indonesian
\nmarket is still underdeveloped and unexplored.<\/p>\n
The development of e-commerce is very much related to the
\nsocio-economic conditions of a country. There are only six
\nmillion telephone lines -- which is the most basic element to
\nenable e-commerce practice -- available in this country of over
\n210 million people.<\/p>\n
Another factor behind the low penetration of computer use in
\nthis country is the fact that not many people, or only about 2.5
\nmillion, have accesses to computers. And of the 2.5 million, only
\nabout 200,000 people subscribe to Internet service providers.<\/p>\n
Not many can afford computers, a condition which is not too
\nsurprising since our annual income per capita is still around
\nUS$500. Furthermore, the holders of debit and credit cards are
\nstill limited to medium to high-income earners living in big
\ncities.<\/p>\n
How many companies are now involved in either business-to-
\nbusiness or business-to-customer e-commerce in Indonesia?<\/p>\n
There are no real statistics about the number of companies.
\nBut as in many other countries, in Indonesia the b-to-b market is
\nmuch bigger than b-to-c. I can mention several major players such
\nas Indosat with its Indosatcom specializing in b-to-b services.
\nTheir clients include Martha Tilaar, which focuses on b-to-b
\ntrade within its chain of productions, and Indonesia Interactive
\n(I-2) mall, which specializes in b-to-c commerce.<\/p>\n
PT Pos Indonesia through its wasantaranet also facilitates e-
\ncommerce for small and medium enterprises (SMEs). Other companies
\ninvolved in b-to-c commerce are Sanur Book Store, Javacraft and
\nBII.<\/p>\n
The domain names have been growing very fast, doubling from
\n600 sites in 1997 to 1,200 sites in 1998. The Indonesian ISP
\nAssociation predicts that annual growth will exceed 100 percent
\nfor the next few years.<\/p>\n
I don't have specific data on e-commerce transactions in
\nIndonesia. But the International Data Corporation (IDC) estimated
\nthat Indonesians spent less than US$20 million on Internet
\ncommerce from 1996 to 1999. The IDC predicted that figure will
\ndouble to about $40 million this year. Another source, Forrester
\nResearch, estimates that the total e-commerce transaction value
\nin Indonesia in 2000 is around $100 million, only 0.026 percent
\nof total world transactions which is around $390 billion.<\/p>\n
You were involved in a recent conference on the Internet in
\nVancouver where you met delegations from other countries. What
\nwas the most striking difference you found about Internet and e-
\ncommerce development in Indonesia as compared to that of other
\ncountries?<\/p>\n
Malaysia, Singapore, Thailand and the Philippines have already
\npositioned e-commerce as a national strategy, although each
\ncountry has its own vision. Singapore's vision is to become the
\nhub of e-commerce activity in ASEAN, while Thailand aims to use
\ne-commerce as a driving force for economic recovery, especially
\nin boosting its export activities. Governments in the four
\ncountries function as effective facilitators in coordinating e-
\ncommerce development so that public and private sectors have
\nclear guidelines concerning e-commerce development in their
\ncountries.<\/p>\n
In Indonesia, unfortunately, efforts to develop e-commerce are
\nstill very fragmented, although e-commerce has been developed to
\nsome extent, anyway. We do have Nusantara 21 or "Telematika
\nNasional" as a national vision for the Indonesian information
\ninfrastructure where e-commerce is part of the concept. But, the
\nvision is not adequately shared among stakeholders yet.<\/p>\n
How does e-commerce benefit people?<\/p>\n
E-commerce basically is a tool of trade. One thing for sure,
\nit will help common people to buy things easily and effectively
\nwithout having to spend their time in traffic jams to reach the
\npacked malls and queue in front of the cashiers.<\/p>\n
As for the companies, it will bring new markets, new services,
\ncompetitive advantage increments, customer expansion, better
\ncompany and product relations, work processing reductions,
\nefficient business processes and less bureaucracy.<\/p>\n
Have you tried e-commerce?<\/p>\n
When I was in Australia, I reserved my accommodations and made
\ntravel arrangements through the Internet. It was really
\nconvenient.<\/p>\n
Have any complaints been heard from providers or users?<\/p>\n
One of the main concerns is security, i.e., insecurities about
\nusing a credit card on the Net.<\/p>\n
How do people feel about the need for e-commerce?<\/p>\n
Small niches of people and companies have started to feel the
\nneed for the e-commerce. But generally, people don't. It takes
\neducation and socialization, even for highly educated and high-
\nincome earners because practicing e-commerce also means changing
\nsome attitudes in doing business.<\/p>\n
Do you really think that the traditional way of shopping,
\nwhich involves all the fun of visiting malls, touching, sensing
\nand bargaining, can be replaced by virtual shopping?<\/p>\n
I think it will depend on what kind of products or services
\nthe consumer wants to buy. For some products such as books or
\nsoftware, e-commerce transaction will be easier to adopt. For
\nproducts such as fashion and jewelry where the customer wants a
\nparticular fit, I think it will take some time for Indonesian
\nconsumers to really believe that e-commerce is a good way to
\nshop. I know that in other countries such as the U.S., chain
\nstores like JC Penney offers customer an exact size of their
\nclothes by fitting the consumers' sizes with the clothes they
\norder virtually.<\/p>\n
Should we speed up the familiarizing of e-commerce despite the
\nfact that we are lacking infrastructure?<\/p>\n
Yes, as soon as we can afford PC and an Internet access, we
\nshould. At least we should make efforts to familiarize ourselves
\nwith digital practices, such as e-mails and finding information
\nthrough the Net. Indonesia should gradually increase its
\n"bandwidth consumption" from mere telephony bandwidth (using
\ntelephones for voice communication) to Internet bandwidth. There
\nis no doubt that e-commerce will become the future tool of the
\ntrade.<\/p>\n
Is there any law that regulates and guarantee the practice in
\nIndonesia?<\/p>\n
There is currently no specific law on that. The UN has a model
\nlaw on e-commerce and e-signatures that could be adopted by
\ncountries that practice e-commerce. In Indonesia, I am aware that
\nthis law is being studied by several institutions including the
\nMinistry of Law and Regulations and the University of Indonesia.<\/p>\n
What are the challenges and the prospects of practicing e-
\ncommerce in Indonesia?<\/p>\n
I think some of the biggest challenges facing Indonesia in
\npracticing e-commerce include the lack of national vision and
\nstrategy at the highest level, causing fragmented efforts in the
\nimplementation of e-commerce. We still don't have good synergy
\namong players, including the government and companies. It would
\nbe good if we had a road map about what has been done and what to
\ndo next.<\/p>\n
We are lacking adequate infrastructure, such as telephone
\nlines, while the existing equipment and services -- including
\ncomputers and Internet services -- are not affordable to many
\nbecause they are too expensive. Our human resources also lack the
\ncapability to adopt adequate technology diffusion.<\/p>\n
I believe that Indonesia can catch up if we are committed to
\novercoming all the obstacles. Significant improvements in overall
\neconomic conditions in Indonesia will certainly propel the
\npenetration of computers.<\/p>\n
What should be done here in order to boost the development of
\ne-commerce?<\/p>\n
Efforts to develop Indonesian capabilities in e-commerce are
\nnot easy, but it is not impossible.<\/p>\n
In general there are four key agendas to be followed by the
\ngovernment, public and players. First, building trust in the
\ndigital economy. That includes the establishment of firm
\nprotections of security, privacy and consumer's rights.<\/p>\n
Second, clarifying marketplace rules. It includes the removal
\nof barriers to the use of e-commerce, establishment of the legal
\nand commercial framework, financial issues and taxation, and
\nintellectual property protection. Legal frameworks are important
\nto provide security for both players and customers.<\/p>\n
Third, strengthening the information infrastructure. E-
\ncommerce will not grow without a strong platform that includes
\nnetwork access and availability and open standards.<\/p>\n
And fourth, realizing the opportunities. E-commerce is part of
\na broader process of economic, social and cultural change. It is
\ncharacterized by the globalization of markets and the shift
\ntowards an economy based on knowledge and information.<\/p>\n
We also need to repackage the way we introduce e-commerce so
\nthat common people don't see it as something too sophisticated
\nbut simply as a tool to do business. We need to develop programs
\nin Bahasa Indonesia so that Internet can be more easily
\nunderstood and used by Indonesians.<\/p>",
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