Local traders to promote e-commerce network

By Christiani S.A. Tumelap

JAKARTA (JP): A number of local manufacturers, distributors and retailers have established a grouping to promote e-commerce in the country.

The Efficient Consumer Response Indonesia (ECR Indonesia) followed the establishment of ECR Asia, a joint trade and industry body created to foster the use of e-commerce in the region.

ECR Indonesia's arrival is receiving a positive response. About 60 local and foreign manufacturers have pledged their full support of ECR Indonesia's operations through an independent cooperation forum, the Indonesian Forum of Consumer Goods (FINDOC), which they established last month.

Chairman of ECR Indonesia Kusudiarso Hadinoto said the country was years behind other countries in America, Europe and Asia in developing business-to-business e-commerce. The system was popular within companies in the United States by 1995.

The Reference Guide to E-commerce in South Asia classifies Indonesia as a country with quite slow adaptation to e-commerce, with usage growth of 16 percent to 18 percent in recent years. Singapore is voted as the most adaptive country with usage growth reaching over 28 percent.

One of the factors behind the delay in the use of e-commerce lies in the fact that there are only a few e-commerce gateway operators in the country, Kusudiarso told The Jakarta Post at a recent seminar on e-commerce held by gateway operator Indosatcom Adimarga.

Another is the high investment entailed.

The chairman of the Indonesian Retail and Merchants Association, Steve Sondakh, said retailers had no choice but to start investing in the electronic business data system because it would sooner or later be a necessity for their business activities.

"Investing for e-commerce may not be cheap. But looking at the great benefits it can bring to your business, it is definitely worth the money," he told the Post.

The assistant director of the country's largest department store chain PT Matahari Putra Prima, Iwan Goenadi, said his company entered into e-commerce transactions with some suppliers.

He said it eliminated the painstaking paperwork -- including purchase orders, advance shipping notices, invoice and return to vendor notices -- required in the supply chain process.

"A proper use of business-to-business e-commerce will enable business entities to cut up to 80 percent in their order lead time, 60 percent in working capital and 60 percent in storage capacity," he said.

Iwan said Matahari planned to further develop the mastering of e-commerce technology and expand links with more suppliers, including small and medium firms.

The general manager of international marketing and the Internet for local cosmetics manufacturer Martha Tilaar Group, Chandra Sugiono, said his company also experienced the cost and time reduction benefits of using e-commerce with its retailers, including Matahari stores.

"For instance, we save time and transportation expenses as our salespeople do not have to travel back and forth to retailers just to get the purchase order requital."

He added that his company also improved its level of service because the e-commerce enabled it to receive, process and reply to any required documents around the clock throughout the week.

Kusudiarso warned that the benefits of e-commerce would not be optimal if a company lacked cooperative and efficient transportation services.

"ECR will persuade logistic movers operating here, including foreign firms DHL, UPS and TNT and local companies, to also participate in e-commerce with our trade and industry sector," he said.