Local portals gear up for online battle
Dotcom mania, established vehicle for business and entertainment in the developed world, is now on the move here, The Jakarta Post's contributor Rudy Madanir observes the trend.
JAKARTA (JP): In this wired world where millions are hooked to the Internet, have you heard the story of a little boy who asks his mother if she knows a cow that likes to play with computers?
Like the mother, most of us would shake our head. And the boy chuckles and says: "Mom, it's the cow dotcom."
Oh yes, dotcom mania has begun to sweep our country. We now have many local websites offering various kinds of goods and services. Some celebrities have also opened personal homepages (check out www.ruthsahanaya.com).
The number of Internet domains surged by nearly 80 percent throughout 1999, reaching 4,685 sites in December from only 2,624 sites in January. And the number has surely soared higher within the past few months.
The Internet, one of the greatest inventions of the millennium, connects some 200 million people worldwide. And serious computer viruses like the "ILOVEYOU" that took one tenth of the world's mail servers down a few days ago do not discourage them.
Despite the fact that the Internet bubble of investor enthusiasm has burst in the U.S. as indicated by last month's sharp drop in share prices, here in crisis-hit Indonesia people are still busy attending the noisy launching parties of Internet businesses.
Hosting an impressive party is just part of the off-line war among the general portals, like the massive advertising campaign conducted in all media types, from the large ad in various newspapers and magazines to flashy street billboards to TV shorts.
It was not a coincident when Detik.com and Astaga.com held their launching parties on the same day in early February; though fortunately not at the same place. Last month, their rival Satunet Group responded by launching five websites with big splashes in a national newspaper. One of the websites, satuwanita.com, is dedicated to career women, with the horoscope page as its main attraction. The group "threatened" to launch another five websites in a couple of months.
They all compete to provide a portal with the best content possible. However, the results of the online war are similar facilities and content in each portal -- from news content and chat rooms to entertainment, health, sports and attractions designed to appeal to women.
They make claims like artillery barrages. One claims to receive hundreds of thousands of page views or hits a day. Another claims hundreds of thousands of registered users; harmonizing with the bombastic daily growth rate of unique users claim. Detik.com claims that they have grabbed about Rp 120 million from advertisers and expect to receive Rp 200 million a month starting from June.
Overall, it seems to be a very prospective business. But so many questions need to be answered -- future growth, source of investment, the prospects for generating revenue when Indonesian e-society is still in the infancy stage and the prospect of e- commerce linked through portals. One frequently asked question in the industry is whether there is a serious concern among the start-up internet players in Indonesia about the expected fall of the stocks of internet related companies, cynically called "the burst of the babble".
"It's a good thing. Because good companies will survive and bad ones won't," said Robert A. Eskapa, CEO of the Satunet group.
Jonathan Morris, CEO of Indonesia On Line, the parent company of Astaga.com, shared the same view with Eskapa, adding that only the top tier of each market will be successful.
"We are now viewed as the consolidator in the market, so if there is a tough economic period, investors will see us as a company that will end up consolidating the others and be the survivor in Indonesia," he said confidently.
And it is obvious that the three internet portal companies are eying the opportunity to be listed on the Jakarta Stock Exchange with an Initial Public Offering (IPO).
So far, portal development has been helped by more than eager investors such as Batavia investment for Astaga.com and Tech Pacific of Hong Kong for Detik.com. Money has also been spent to launch an aggressive brand awareness campaign. All of these contribute to Indonesia's economic recovery, no matter how small.
A.B. Susanto, managing partner of a Jakarta consulting group, supports the involvement of foreign investors in domestic internet businesses to move the wheel of economics, but he underlined that they should not just rely on the IPO. "They should have a certain and clear revenue stream," he said.
The Indonesian Advertising Association has no figures on online advertising yet, but Yusca Ismail, director of Perwanal advertising agency believes it has a bright future.
"As the economy grows, it (online ads) will be a lucrative market," he told The Jakarta Post.
He said that he has many clients who are interested in placing their ads on the Internet, but they are still pondering the effectiveness.
"The problem is that the users cover only a selected group of people, and there is no tool (independent agency) to measure the users' growth and the consumers' spending," he said.
Shopping
While investors put high hopes on the future of e-commerce, they are facing the reality that it will take quite some time before they can reap any profits because it's not easy to build an e-culture.
Linda Mangunsong, who works at PT Sapora, an IT solutions company, is not interested in online shopping. "I prefer to go to the mall, where I can see and touch the items I want to buy. Besides, shopping at the mall is quite relaxing for me."
Even the bank is not ready. Linda, one of the 1.5 million Credit Card holders in the country, related that once she wanted to pay her credit card bill online, but was told that the form, which was available on the Internet, must be signed manually.
The Association of Indonesian Internet Service Providers said that Indonesia's internet subscribers will reach around 200,000 with an estimated 1.5 million users this year, and the number of users is projected to grow to almost two million next year.
International Data Corporation (IDC) estimated that the number of Internet users in Indonesia making purchases through e- commerce will grow from about 70,000 in 2000 to 600,000 in 2003. It predicts that the personal computer population will be more than two million units by then. PC sales have jumped from a mere 29,000 in the first quarter of 1999 to 85,000 units in the same period of 2000. Unfortunately, today there are only six million telephone lines for a population of over 200 million.
If you belong to the majority who do not have a PC or telephone line at home or who cannot afford the Internet connection, you can become part of the e-society by dropping in at any Internet cafe in the country's big cities. Some white collar workers are lucky as they can enjoy the facilities for free in their office.
War
The market may be small at present, but the potential growth of internet users will eventually boost e-commerce and revenues from web ads, so, many businesses want to be on the supply side. In the meantime, companies engaged in e-business, including the three portals, have to struggle to be the fittest.
To attract loyal users, portals have invited noted columnists to write for them, and their reporters are urged to provide the fastest story possible. As a result, online media reporters are among the aggressive ones in press conferences, reporting to the desk even before Q and A sessions have begun, disturbing fellow journalists in the conference. This rapid reporting can also put accuracy at risk.
The three portals, used to tough battles with one another, have to face competition from other tough players as well -- the financial portal, IndoExchange, has been touted as the best financial site in Asia. And do not expect other media giants like Tempo and Kompas to keep silent during the war. Kompas, with many readers of its online edition, recently launched its own webstore and other steps seem to be in planning.
The war has just begun and it will obviously take time before it ends. But victory will be decided by the users.