Hendarsyah Tarmizi
\nThe Jakarta Post
\nJakarta<\/p>\n
JP\/<\/p>\n
Many online stores survive despite difficulties<\/p>\n
Almost not a day passed without the launching of a new dotcom
\ncompany in early 1999 as local investors tried their luck in e-
\ncommerce following the success of the online business in the
\nUnited States.<\/p>\n
The boom, however, did not last long. Reports of the collapse
\nof many American dotcom companies in the following year dealt a
\nblow to nascent online companies.<\/p>\n
Internal factors, such as poor Internet connectivity, costly
\ntelephone charges and the low rate of personal computer (PC) use,
\nare other reasons why many online retailers had to shut up shop.<\/p>\n
LippoShop, one of major local online stores and the first
\ncompany to introduce the online shopping concept to the country,
\nhas been forced to quit its Business-to-Customers (B2C) service
\ndue to the lack of response from customers.<\/p>\n
Since August of this year, the online shopping company has
\nfocused only on Business-to-Business (B2B) operations.<\/p>\n
Executive director Mia Lukmanto said that low Internet
\npenetration remained a major handicap for the B2C online services
\nin the country.<\/p>\n
Although the development of the online business is not so
\nencouraging, many online stores are still able to survive the
\ndifficult conditions.<\/p>\n
For those who are often too busy and have not enough time to
\ngo to conventional stores, the surviving online stores still
\noffer a wide range of goods and products.<\/p>\n
GlodokShop.com, which started operation in January of last
\nyear has, for example, become more popular with electronics
\nlovers. It sells a wide range of electronics products ranging
\nfrom home appliances to a complete home theater set.<\/p>\n
On the website, at least you can see the latest models of
\nelectronics goods, or check out the prices before you go and buy
\nin a conventional electronics shops.<\/p>\n
Joseph Widyanta SA, the head of the sales and marketing
\ndepartment of GlodokShop.com, said that the customer response to
\nthe electronics online shop was quite positive.<\/p>\n
He said that the website, which last year booked 2,000
\ntransactions, had received orders not only from Jakarta but also
\nfrom other cities.<\/p>\n
\"We hope that this year the number of transactions will
\nincrease by 300 percent,\" he told The Jakarta Post in a recent
\ninterview. More and more people have been entering the
\nelectronics good portal, which at present has more than 200,000
\npage views per day.<\/p>\n
\"Although the profit margin is small, the income is sufficient
\nto cover operating costs,\" he said.<\/p>\n
Other surviving companies include the Surabaya-based
\nKakilima.com, which specializes in selling cakes, puddings,
\ncookies, flowers, fruit baskets, gifts and toys.<\/p>\n
Weeny Ika Candra, a senior executive of Kakilima.com. said
\nthat the website, which was established in 1997 with an initial
\nmission of helping Indonesians living overseas to find and send
\ngifts to their parents, relatives or friends back home, has
\nreceived a good response from the public, particularly after two
\nyears of operation.<\/p>\n
At present Kakilima.com has delivery areas covering most major
\ncities in the country, mostly in Java, with orders reaching 200
\nper day.<\/p>\n
\"Kakilima.com is the only online shop in Indonesia which has
\ndelivery areas covering most of the country's cities,\" she told
\nthe Post.<\/p>\n
Like GlodokShop.com and Kakilima.com, Indomall.com has also
\nmanaged to survive thanks to its ability to provide a good
\nservice to its customers.<\/p>\n
The number of orders received by Indomall.com, which
\nspecializes in selling flowers, cellular phones, children's toys,
\nsports equipment and apparel, keeps increasing, albeit not
\nexponentially, said Veronica, a sales executive of PT Indonesia
\nInti Internet, the company which operates the website.<\/p>\n
According to Veronica, competitive prices and on-time delivery
\nare important factors which have enabled the website to remain
\nafloat.<\/p>\n
Although the market for online shops in Indonesia is still
\nconfined to the well-off, the prospects for e-commerce in the
\ncountry remain bright.<\/p>\n
\"The online stores, which are relatively stagnant at present,
\nwill see their businesses growing rapidly in the next three to
\nfive years,\" Veronica said.<\/p>\n
A lack of transaction security is another problem facing the
\nnascent e-commerce industry. The government's slow response in
\nproviding practical guidelines and regulations has also been
\nblamed for the sector's slow growth.<\/p>\n
Given the lack of legal protection, many trade-related
\nwebsites have turned to conventional methods of payment. Cash on
\ndelivery payments are most commonly used, while for big
\npurchases, payments are settled through bank transfers.<\/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. B2B transactions contributed most
\nof this amount.<\/p>",
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