Outlook: The opportunity is definitely there

Outlook: The opportunity is definitely there

The lack of security and law enforcement is one of the many
things hampering the development of e-commerce in the country.
Eka N. Ginting, CEO of locally based travel portal indo.com,
answers The Jakarta Post's questions on the issue.

Question: How do you see the development of the country's e-
commerce?

Answer: Very positive. E-commerce must be understood as a very
strong consumer empowerment phenomenon -- with the Internet and
the e-commerce that it enables, consumers now have far more
access to information than they used to have, the convenience of
searching and transacting beyond their wildest dreams, the
ability to do price comparisons across the world, and the ability
to demand and extract services that would really be tailored to
each of them individually. Now, everywhere, customers, as soon as
they discover all these benefits, do not want to go back to non
e-commerce transactions.

What does that mean for businesses?

Well, if your customers were drawn by one particular set of
minds (e.g. mobile lifestyle, credit card payment, etc.), it
would be imperative for businesses to cater to the demands of
their customers. Businesses must strategically integrate the
Internet and e-commerce into their business process -- from using
the Internet as a sales channel where their customers can buy
their products/services to smartly deploying Internet technology
internally to ensure cost competitiveness. Indonesia is no
different.

So, the opportunity is definitely there. The entrepreneurs
with ideas are there, and the manpower to execute them is also in
place. What is lacking is serious financing support to make sure
lots and lots of good ideas get funded, and the very best ones
survive and become the anchor-Internet companies in Indonesia.
indo.com certainly hopes to be one of these companies.

What are the main barriers of online shopping in Indonesia?

Very basic: things to shop for and how to do the shopping.
What do I mean? In more advanced markets like the U.S., the first
five things that get people's attention when it comes to online
shopping are computer products, financial products, travel, books
and auctions. Now, do we have these products in Indonesia? Yes,
we have some computer products and probably more of travel.

But there is no financial products yet available on the net --
BCA was great with its existing services -- that was a
breakthrough in the Indonesian market. Books and auctions have
not developed strongly. For books, for example, it is quite
interesting to see. My wife bought books from Amazon.com and last
week went to the Fatmawati branch of the post office to pick up
the package. She found out that a good portion of the pick-up
area in Fatmawati is now occupied by Amazon.com's shipments -- so
people in Indonesia are buying books online, from Amazon.

Asking how one goes about shopping online is a simple way of
saying that a lot of the infrastructure is not properly in place;
from as basic as Internet access (reasonable, but substantially
more expensive than in markets like the U.S.), to payment gateway
(it is difficult to do rupiah credit card transactions online --
not more than a handful of operators do so because it is
prohibitively expensive) to brand establishment (making sure
people feel comfortable buying from a trusted name) to
fulfillment itself as well as customer service/complaints. If you
think that this is a huge problem, it is. But this is not unique
to the online world -- the Indonesian business environment is
still hugely fragmented and inefficient -- ask Citibank or
Telkomsel how hard it is for them to make sure that bills get to
their customers on time. It is just that when you have the
scalability power of the Internet, a lot of these problems
suddenly get magnified and accelerated.

Do you think the lack of security and law are the major
concerns of the industry?

Let me answer by giving an example. As far as I know,
electronic documents are still not an acceptable contract in the
Indonesian legal system. So if you withdraw money from an ATM, or
you pay Telkom through an ATM, the printout is not a valid
receipt. But does that stop people from using ATMs to withdraw
money or to make payments? Recent numbers from klikbca
transactions certainly confirm that people are comfortable doing
financial transactions online. However, having the legal
environment supporting all of these activities would certainly be
welcome. My suggestion is, don't fret over it. We could adopt an
existing one from, say, the United Nations, and modify it later
on as we find out what needs to be changed.

How many transactions (in volume and value) can you book in a
day?

For Indonesian hotels, through indo.com, we have the capacity
to rent out over 500 rooms per day, with an average rate of $50.
For overseas hotels -- Phuket, Singapore, Vietnam, etc. -- we
have another set of 500 rooms per day that we can rent. What we
have realized so far is a few dozen transactions per day, for
about 100 rooms/night, for a total value of a few thousand
dollars in one day.(hen)