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e-Commerce in Indonesia: is the princess waking up?


Founder Institute mentor Minh Bui has sought insights on the Indonesian e-commerce scene and shares his findings.

On his e-Commerce trip around Southeast Asia to explore the landscape of  five major countries Malaysia, Indonesia, Thailand, Singapore and Vietnam, e-Commerce entrepreneur Minh Bui had a fruitful stop at Jakarta and met some interesting people in the online business industry. He conducted a one-question, many-answers interview to get different viewpoints for each factor.

First, a quick introduction of our paricipants.

Jason Lamuda is CEO of, a leading fashion e-commerce site in Indonesia. BerryBenka has recently raised its Series A investment from GREE Ventures and East Ventures. Before running, he co-founded in 2010, which was acquired by Groupon in 2011. The team grew Groupon Disdus to become the #1 daily deal company in Indonesia.

Paolo Croci is VP Online Marketing of Lazada Indonesia, a Rocket Internet backed company. Indonesia is one of the main markets of Lazada Southeast Asia, which has 5 countries, together with Malaysia, Philippines, Thailand and Vietnam.

Amir Karimuddin is Editor at the most popular tech startup gateway in Indonesia, As an editor, Amir has met many e-Commerce entrepreneurs and has seen different insights. He is also a co-founder of Bebibobu, a start-up focusing on selling unique baby tees online.

Cindy Fur Fitri is a typical online buyer in Indonesia: female, young, trendy. Let’s find what she tell about her shopping experience. Cindy describes her online shopping experiences as a convenient and inexpensive way to buy goods.

I buy a lot from online shops, from clothing, cell phone, medication, cosmetic, document printing, even a laptop. 🙂

“I found it efficient to buy and order things online as they mostly offer cheaper price, also we don’t need to spend some extra costs for taxi, lunch, and ice cream, unlike when we shop at malls. The most important thing is that I can save my time and energy to do my work while waiting for delivery — effortlessly happier that way!”

So what are their opinions on the state of e-commerce in Indonesia?

Market overview

What are the key factors that affect the growth of Indonesia e-Commerce?

Jason: For Indonesia e-Commerce to grow exponentially, there continually need to:

  • Increase in Internet penetration; and,
  • Simpler and more reliable payment solutions, with support from banks.

Paolo: The most relevant factors are the growing infrastructures (availability of decent internet connection, mobile), the penetration of the smartphone and the increase of the average income.

Amir: Trust, infrastructure, online culture.

Cindy: I believe that the rise of Internet users will have a significant impact to the growth of e-Commerce in Indonesia. This includes local companies with websites and their marketing activities, vis-à-vis the popularity of Facebook and online shops/forums, which have contributed the most.

Name the top 3 e-Commerce sites. What are they doing now?


  • B2C: Groupon Disdus – Daily deal
  • Classified: Kaskus
  • Marketplace: Tokopedia/Multiply

Paolo: Bhinneka, Tokobagus, Blibli

Amir: Multiply, Blibli, Rakuten


  1. – This website has online selling and buying forum (Forum Jual Beli or ‘FJB’) which enables user to create a thread to offer their product. Potential buyers may contact them directly to the thread starter via private message or provided contacts and proceed to the transaction. We can almost find anything at Kaskus – from housewares to secondhand books, from herbal medication to sophisticated gadgets, tour and travel services!
  2. – This forum is almost the same as, but a difference is that this one focuses on selling and buying activities while Kaskus includes discussions on their forum. Tokobagus also has more sophisticated setting for seller to create their simple online shop site. Too bad this site couldn’t provide a comprehensive relation and record among buyer and seller and make it hard to make sure whether one is a recommended seller or not.
  3. Facebook – Facebook plays a major role in facilitating e-Commerce, in particular for online shopping activities. There are numerous online shops at Facebook offering clothes, apartments, and many other products in which the seller could easily get in touch and tag photos of their products for potential buyers.

How about the impact of offline business to e-Commerce here?

Jason: From my understanding, it seems that most of the giant offline retailers and businesses have not started to focus on e-Commerce.

Paolo: We didn’t explore that yet.

Amir: Still somewhat important as customers usually doing sightseeing in physical store first.

The role of foreign Internet companies here?


  • Until today, foreign internet companies have contributed positively towards the growth of startups and also e-Commerce. Most of the leading websites (apart from media portals) have backings/investments from foreign companies, e.g. Tokobagus, Groupon Disdus, Tokopedia, Multiply, Rocket Internet, Yahoo Koprol.
  • As more foreign internet companies/VCs get more involved in Indonesia, I believe it will create a positive impact on the whole internet ecosystem.

Paolo: Foreign companies are bringing a more dynamic competition as well as new capitals and competencies.

Amir: These act as catalysts to the adoption of new technology.

Cindy: I think foreign internet companies, more or less, have become an inspiration to local companies to develop their e-businesses. Yes, Ebay and Amazon started it all!

A portrait of the user

How about the buying trend of the middle class demographic?

Jason: While travel is probably still one of the biggest e-Commerce segment in Indonesia, middle class people tend to buy gadgets (for male) and fashion products (for female) from online shops.

Paolo: First of all electronics, and then they are discovering also new product categories not gadget related.

Amir: Into online commerce, more are spending on traveling, consumptive in every aspect.

Cindy: Middle class users love to buy stuff after receiving their salary to satisfy their desire to shop. Online shops help the middle class to find cheaper products no matter if it’s a secondhand or black market product – which are easily to find at online shops.

Top products people usually buy online?


  • Male: Gadgets & electronics, travel related
  • Female: Fashion related items, daily deal, travel related

Paolo: Mobiles, tablet, electronic accessories, fashion.

Amir: Clothing/fashion products, gadget, online coupon.

Cindy: Clothing, medicines, phone, watch, bag, cosmetics and perfumery, and some unique stuff we couldn’t find at conservative shops.

Key factors that affect customer’s buying decision?


  • Product selection
  • Product price
  • “Reliability of website” – This is probably the biggest hurdle for first time buyers.

Paolo: Product assortment and discounts.

Amir: Review/recommendation, needs, good images.

Cindy: Price. I think Indonesian customers are mostly blown by low price and discounts without checking further the details (quality and originality of products and reliability of sellers). However, users who possess more experience with e-transactions will tend to be more careful to decide on products they are going to buy as they reckon that online pictures can deceive most of the time.

Your opinion on the role of Social Media in e-Commerce e-Commerce?


  • Social media is probably one of the reasons for the widespread growth of e-Commerce in Indonesia, as many people actually used Facebook and Kaskus to actually sell and buy items.
  • I believe that the effect of social media will decrease as more established e-Commerce players come in, both in C2C and B2C. By this time, consumers would have already become “acquainted” with the few big e-Commerce players.

Paolo: Social Media has a growing role, and is going to be extremely important in the near future. Its potential hasn’t been fully understood and exploited yet.

Amir: Social Media holds the key in spreading reviews or recommendations about products (as part of viral marketing).

Cindy: I believe that Facebook, Twitter, blogs and online forums take a great role in the existence of e-commerce in my country. They are not only helping people to develop their business, but also developing their network without much cost. It is also great to witness successful businessman who start his/her business from zero to millions in income per month. It is like witnessing a good thing arise amidst the misuse of the use of social media nowadays.

How many percent of people use smartphones to access your services? What about users who access websites by mobile phone?

Jason: In, 20% of traffic comes from mobile (50% from tablet and 50% from smartphones).

Amir: Around 20%. Don’t really have the number, but may reach 60-70%.

Cindy: Almost 70% of college students are using smartphones or phones with Internet access, I think.

Supporting Factors

What are the Top 3 effective marketing methods to recruit customers?

Jason: SEM, SEO, Social Media Marketing.

Paolo: Search Engine, Display Advertisements, Social Media.

Amir: Advertising, Social media, Newsletter.

What are some of the most popular online payment methods? What about their share in the total scheme of things?

Jason: Bank Transfer, more than 60%. Online banking, 20%.

Paolo: Cash is still the most used method.

Amir: Bank transfer (maybe 70-80%), credit card (around 10%), COD (around 10%).

Cindy: ATM Transfer, e-banking transfer, and there is a unique payment method in Kaskus namely “Rekber” or “Rekening Bersama.” Rekber is a payment method which involves a third person as intermediary in order to ensure safety of e-transactions. Forbes Indonesia wrote about it in its May 2011 edition.

Is logistics a problem? And what are the best ways to fulfill orders?

Jason: I would say yes and no.


  • Very low technology from logistic/shipping company (thus we are not able to integrate our system with their tracking system).
  • Shipping bulky items is still very expensive.
  • Shipping to East Indonesia is very expensive


  • JNE/Tiki has a large enough coverage all over Indonesia. They are quite reliable and consumers also trust them.

Amir: Not really, but there should be a way to track shipping in a more convenient way.

The toughest  difficulty of e-Commerce companies here?

Jason: I would say the most challenging is user acquisition. While it may be easy to acquire a small number of customers, however being able to scale an e-Commerce service and dominate the market would be the biggest challenge.

Paolo: Attract new costumers who have never had an experience of online shopping.

Amir: Gaining trust from both customers and merchants.

Cindy: To build reputation and gain customer at the beginning of their business.

What are the trends in e-Commerce in the next 3 years?

Jason: Definitely there will be a decent growth in overall e-Commerce from consumers’ point of view, as more people get more comfortable buying online.

  • A lot more companies/startups will join the e-Commerce space.
  • The question is: who will be able to dominate the market in each of their own segments?

Paolo: Exponential Growth!!!!!

Amir: e-Commerce will be a way of life. More and more business owners will go online as complement to their brick-and-mortar business. Logistics companies will realize the importance of an online presence and support.

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