Two more companies enter domestic Internet market
JAKARTA (JP): Indonesia's nascent Internet market became more crowded after two companies announced on Wednesday their entrance into the business, offering different sites for consumer product information and online auctions.
International business information company Castle Group, in cooperation with India's Internet company Edge NetVentures, launched on Wednesday what they claimed to be Indonesia's first integrated consumer portal, www.kemana.com.
Separately, local Internet service provider PT Metamedia Interaktif launched a new feature for its five-week-old online auction site called gadogado.net.
Sachin Gopalan, the chief executive officer of www.kemana.com's owner Edge NetVentures, said his company decided to enter Indonesia's Internet market because it saw an immense opportunity for the future, especially for consumer product portal sites.
"There are not so many good sites available currently here so we have a very good chance to provide Internet users with the best content and service, which, in this case, is on consumer products and shopping information," Gopalan said.
The president of Castle Group in Indonesia, James Castle, said the company was highly optimistic of being able to capture a significant number of the country's estimated one million Internet users at present.
Castle said studies done by ACNielsen showed that 39 percent of Internet users in Indonesia went online for reading news, reflecting the dominance of news portals and the opportunity for consumer-based content portals.
"Being the largest Southeast Asian consumer market, Indonesia actually presents a potential Internet market of up to 15 million in the next five years," he said.
He said www.kemana.com was designed to allow customers to cut costs and save time in window shopping by instead checking out the necessary information on a particular product, including the price, item specification and best place to purchase it, on the Internet before actually buying it.
Castle declined to reveal the investment his company and Edge NetVentures had put into the development of www.kemana.com, but asserted that it was about less than half the average funds spent by other portals operating in the country.
It is currently focusing its coverage on Jakarta's market, but there are plans to expand within the next 12 months to nine other cities, with immediate priority given to Surabaya and Medan.
Castle said www.kemana.com was projected to be listed on the stock market here or in Singapore after the site was in full operation in all the designated cities.
He added that the company expected to be able to operate in a positive cash flow within 12 months.
Separately, the general manager of online auction portal gadogado.net, Toni Gushendarto, also expressed optimism about the business, saying his company expected a break-even point soon after it starts the commercial advertisement service, which is the main revenue generator in the Internet business.
He said the company had seen a positive response from Internet users, as indicated by a significant growth of registered clients by an average of 30 percent per week since the site went online on Feb. 1.
"We have now over 4,300 registered clients," Toni claimed.
He said gadogado.net, which was introduced on Wednesday, is a new service to allow users to donate to humanitarian organizations Sayap Ibu and Aids Indonesia by auctioning goods in the charitable section, of which it had facilitated more than 200 transactions.
He acknowledged that the number of transactions done on the Internet in Indonesia was, however, still way below that in neighboring countries.
Toni quoted an international survey which reported that Indonesia had an estimated US$2.65 million in total online transactions in 1998, while at the same time Singapore recorded $8.94 million and Malaysia $6.31 million.
"We expect to facilitate more transactions in the near future. At the moment, the Indonesian market still needs to be educated about the beauty of online shopping," he said.
Castle said Internet shopping in Indonesia was still very slow at the moment, hampered mainly by people's concern about the security of virtual transactions, the hesitation of many retailers to reveal their price and conditions as well as a lack of legal assurance.
"With the dynamic campaigning done by existing Internet companies, we hope to see a significant, positive improvement in local market perceptions and attitudes toward e-commerce in the next three years," Toni said.
The American information technology and telecommunications research firm, International Data Corporation, estimated the number of Indonesians who buy goods on the Internet would swell from approximately 70,000 in 2000 to 600,000 by 2003.
There are about 3,544 web sites managed by various companies in Indonesia at present and between 40 and 50 of them are Internet Service Providers (ISPs).
The number of commercial web sites is expected to increase further this year with the recent swarm of local and foreign Internet companies, such as Singaporean search engine portal Catcha Group and local news content portals Detik.com and Astaga.com.
Some local non-Internet companies have also announced their plans to enter the online business, including insurance firm Lippo Life, electronics and office equipment suppliers Astra Graphia, Multipolar and Metrodata Electronics. (cst)