Lazada Indonesia launches 11.11 campaign | Digital Asia
Digital Asia News Update
This is also part of the company’s commitment towards creating new economic points in Indonesia through SMEs.
According to The Economist Intelligence Unit, there is still room for growth for Indonesian customers to transit towards online shopping as a daily thing. A survey shows that 26% of the population shopped once a week or more through e-commerce, 68% shopped every few months, and 6% never shopped online.
EIU Asia global chief economist and managing director Simon Baptist says that private consumption in Indonesia is expected to rise to US$19 trillion, with 51 million more households entering the middle class (earning >US$10,000) between 2017 to 2020.
“Twenty percent of the middle class growth came from Jakarta, Surabaya, Bandung, and Medan. This means growth is not strong enough for a capital city.”
Baptist says that the number of internet users is expected to more than double by 2020, and the government has new policies in place to improve digital infrastructure such as te Palapa Ring project, e-commerce roadmap 2017-2019, Inclusive Digital Economy (IDE) Hub, and programmes that encourage growth of SMEs. All these will be drivers of the e-commerce landscape in Indonesia.
“However, complex regulations and access issues hinder MSMEs from benefiting from e-commerce, although the ‘8 millions MSMEs and SMEs go online’ (has hit six million SMEs) programme is a positive sign.”
He adds that payment systems also play an important role in e-commerce growth as in Indonesia, cash on delivery (COD) and bank transfers dominate.
“There is an opportunity for alternative e-payment channels to change the game as 27% of Indonesian people made digital payments, even though only 2% to 3% of Indonesians have credit cards or digital money accounts.
“As for SMEs, they now should be developing their e-payment capabilities in e-commerce. Sixty percent of SMEs in Indonesia are already online, but only 10% have adopted digital technology and 15% have online ordering and payment systems.”
E-commerce also relies on logistics, so distributive and retail networks as well as roads still need significant investment. E-commerce players need to move quickly to build consumer trust, before problems in security and privacy increase.
Adding value to SMEs
As an e-commerce player, Lazada is committed to enhancing the local economy by providing various programmes for its sellers, such as ‘LazStar’ to prepare sellers for mega campaigns and education related to business strategies.
“Creating opportunities for SMEs to grow by helping them build trust from customers shopping online, and simplified logistics as well as goods delivery, to providing comprehensive technology tools for them to list products, monitor businesses, and engage with customers is crucial,” Lazada Indonesia chief executive officer Alessandro Piscini tells Digital News Asia.
He explains that Lazada is developing fulfilment services for brands (LazMall) and sellers, by adding to the 10 warehouses in eight cities it already has, to help sellers with logistics and enable faster delivery.
“Our objective is to bring the goods as close as possible to customers and allow sellers and customers outside Java to reach sellers and customers located in Java.”
When quizzed on business growth, Piscini was unable to sharespecific numbers but says that key drivers of the growth are user engagement on the platform, developing new apps and features, and improvement in front- and back-end technology.
In terms of the 11.11 campaign, Lazada Group raked in US$123 million in gross merchandise value in 2017. Piscini declined to disclose the target for in Indonesia this year.
He said that 11.11 really helped to increase the number of users accessing its platform, and brought more customers to sellers.
“So it gives sellers a chance to acquire more new customers and leverage on them. For us, Indonesia is special in terms of the nature of its market, level of engagement, and willingness to improve.”
During its 11.11 campaign, users can view the prices of products, and enjoy up to 90% discount, free shipping, and other deals from 130,000 sellers with 3,000 local and global brands, and 11,000 products.