Local online stores still fight to win trust, orders
Local online stores still fight to win trust, orders
By Christiani Tumelap
JAKARTA (JP): The Internet has brought some amazing changes to
the way many people live. There is the new concept of
communication brought about by email, digging for information in
virtual libraries, downloading music for free, medical advice
from e-doctors and shopping at virtual stores.
In some countries, Internet users shop online as frequently
and freely as they use email, online chat rooms and online news
services. In Indonesia, however, online shopping is apparently
less popular than the other virtual products and services.
"I'd love to buy stuff online, but certainly not from
Indonesian websites. I don't trust them," said Aditya Rahman, a
young businessman who used to buy books from Amazon.com when he
studied in the U.S.
"I'm not sure how reliable the local sites are. Besides
Internet connections here are unbearably slow, and I don't want
to waste my time and money," he said.
A housewife and secretary, Fika, said she was disappointed
with the services provided by one local online store. After
learning about the store from a massive ad campaign, she signed
up and ordered some items. She waited three days, but her order
was not delivered.
Fika said she called the store just to find herself put on
hold several times before finally being told her order was still
on the waiting list. "I think this is the last time I buy my
groceries online."
Since Internet fever hit Indonesia two years ago, dozens of
companies have emerged offering various products and services
online.
Virtual stores
For online shopping, there is SanurBook and Gramedia
Cyberstore specializing in books; Lelang2000, Iklan Doea Lima and
Cabe Rawit for auctions and classified adds; LippoShop,
GetEkstra.com and RadioClick.com for various consumer products;
Travoo.com and AstagaTours.com for travel bookings; Mobil88 for
cars; and Global Teleshop for cellular phones and accessories.
GetEkstra.com sells products like televisions, stereos,
personal computers and kitchen appliances.
LippoShop has two virtual stores -- a Hypermart which sells
items from dry groceries and health and beauty supplies, to
electronics and home appliances, and the Hyperoffice, which sells
office equipment, supplies and furniture.
LippoShop made its first delivery in September, after taking
over the business from another local company, DialMart, which
used the telephone as the medium of order.
RadioClick.com, which utilizes the Internet and the radio,
targets its services to radio listeners, radio advertisers and
radio stations.
Company executive John Tumiwa said RadioClick would soon
launch auction sites and a special online air-time booking for
advertising agencies and direct advertisers.
Most of the online stores, including LippoShop and GetEkstra,
require customers to register as members before making orders.
In order to attract customers, some online stores offer
discounts or gifts for purchases of certain amounts.
Payment can be made by credit card, an automatic debit from
the members' bank account, transfer through the ATM or cash on
delivery. Most of the stores promise to deliver goods within 24
hours, but in reality it may take two days, three days or
forever.
Most of the online stores operate in Jakarta and therefore
concentrate their deliveries within Greater Jakarta.
What exactly are the chances these online stores will be able
to attract customers? The answer is not very good, according to
Internet expert Onno Purbo. "To be honest, it's very difficult to
classify Indonesians as good online customers."
A lack of interest and demand for business-to-customer online
shopping, he said, was clearly shown in a recent poll by MarkPlus
and SWA, which found only 9.9 percent of about 1,000 Internet
users were willing to make purchases online.
Ferii Limputra, an executive of Travoo.com, said his company
received a positive response from potential customers, but the
actual number of orders it received was far from satisfying.
"There are lots of lookers but that does not necessarily
translate to bookers," he said. Travoo.com now has more than 50
corporate clients out of a huge number of visitors to its site.
Better numbers have been reported by LippoShop, which has at
least 145,000 registered members, and GetEkstra.com, which claims
it signed up 5,000 members in its first two weeks of operation.
Still, the figures are insignificant compared to the estimated
number of domestic Internet users, which is between 1.5 million
and two million.
No trust
The biggest factor behind the modest number of online shoppers
is perhaps the fact that most people still prefer to buy things
in "real" shops, where, unlike in the virtual stores, they can
see, touch, compare and try on the items they are purchasing.
It will take time and a series of extensive campaigns to
encourage the majority of Internet users to adopt online shopping
as an alternative to the cramped malls, department stores and
markets.
Another factor is that many, if not most, potential online
shoppers do not feel secure making online transactions. A
celebrity and icon in the radio business once admitted in public
she did not trust Indonesian online shopping sites.
Even some people who work for online shops have never tried to
make a purchase at a domestic online shopping site other than
their own, because they are worried about the security offered by
the sites' management.
Ferii said he had purchased books, CDs, magazines and computer
software from American sites like Amazon.com, which he described
as excellent. "But, I have never bought anything online in
Indonesia. I'll wait for the JSX to get better first, I think."
Onno also said he had never tried online shopping. "To be
honest, I've never gone online shopping myself .... "
The owners and operations of local online shops clearly must
work much harder to make people feel safe buying and paying for
things online using credit cards, said multimedia and Internet
analyst Roy Suryo.
Some local online shops, like Global Teleshop, have
anticipated this lack of trust in making online transactions and
the low penetration of credit cards in Indonesia by allowing
customers to pay for their goods with cash on delivery.
Another problem hampering the growth of online shopping is the
expensive telephone charges of connecting to the Internet. People
prefer to shop at real malls because they can wander around for
five hours and buy nothing, but do not have to worry about
receiving an outrageous phone bill at the end of the month.
Local virtual bookseller Gramedia Cyberstore, for example, saw
its sales drop dramatically when the government recently raised
telephone rates. Orders and sales went back up when people became
used to the new rates.
Onno said the relative lack of interest in online shopping was
also due to the fact that most of the current 1.5 million active
Internet users in Indonesia were people between the ages of 20
and 30, who had limited budgets to spend online.
Optimistic
Onno said the number of Internet users in Indonesia was
expected to jump from 1.5 million to about 20 million within two
or three years.
He warned, however, that the chance for local business-to-
customer sites to grab a significant share of this market was not
so bright. He said business-to-business sites which offered
better value and more regular orders made by groups of suppliers,
producers, distributors and vendors would likely benefit more
than the business-to-customers sites.
But LippoShop executive director Mia Lukmanto said she was
upbeat her company would be able to expand its market by using
the proper strategy to provide greater access to its services,
like taking orders by phone and fax.
"This strategy is employed since we believe the nature of
human communication is oral communication. Also considering the
number of Internet users or subscribers here is relatively low,
while on the other hand the number of telephone customers is very
large and offers potential," Mia said, adding that LippoShop was
targeting Rp 229 billion in sales in 2001.
Ferii of Travoo.com is also optimistic. "The interest is
there .... The demand will be there when people know that they
can make transaction online securely."
Local online shops believe if they can effectively improve
their online and off-line customer services, they will be able to
survive and attract more customers and orders.
LippoShop's Mia said her company was unable to deliver some
orders on time during the first few weeks of operation because it
had a limited staff, failing to foresee the huge response the
site would receive from the public.
She said the company had solved this problem by hiring more
people, adding more vehicles to its operation and improving the
bandwidth capacity of its website.
Travoo.com also has received plenty of complaints about its
services, including from westerners, who tend to be harsher in
their comments. "Some ask why the prices are so high. Some state
we are just no good and amateurish," Ferii said.
Tips
Here are some tips for online shopping:
- Plan your purchases before entering the virtual shop to avoid
spending too much time online, which will help keep your
telephone bill down.
- Visit a few different sites first to compare prices.
- Check if the shop is a secure site with Verisign or Thawte if
you plan to use your credit card.
- Choose a trusted name in online shopping services.
- Check on the company that runs the site. There are lots of fake
firms on the net.
- For Indonesian sites, email your request first and see how they
respond.
- Read carefully all the terms and conditions for the refund
policy, delivery, etc.
- Check your purchases carefully when you receive them. You
should claim any damages or mistakes in your order during
delivery.