Two more companies enter domestic Internet market

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)