Fundamentals of Supply Chain Management

E-Commerce
Indonesia Key Facts

255.5
Million
4th Largest Population in the World

DEMOGRAPHIC DIGITAL NATIVE

52% Male 58.4%
48% Female 12 34 YEARS OLD
This younger generation
born and living in the
internet era. They tend to
Source : techasia 2014
make friends in cyber
Indonesia Key Facts

MORE MORE
URBAN DWELLERS TRANSACTION IN
ONLINE SHOPPING

42% 46% 50% 54% 57%

58% 54% 50% 46% 43%

2000 2005 2010 2015 2020

URBAN RURAL
Source : techasia 2014
Indonesia Key Facts

Main Uses

82 Million

INTERNET USER 76% Social Networks

38.3 Million 45% Social Networks

MOBILE PHONE USER

Information
42% Search

Source : eMarketer 2013

Indonesia Key Facts

rd 70 Million
3 Active Facebook Users

World rank

5th 29 Million 3rd 30 Million

Active LINE Users
Active Twitter Users World rank
World rank

Of all the countrys e-commerce transaction

27% Occurred via social media in 2014

INDONESIAN
PEOPLE ARE SOCIAL FREAKS

The use of social media to facilitate e-commerce is a

big chance for any consumer driven business to
think about before coming to Indonesia
Source : Kemenkominfo & Sing Post
Significant growth on number of
E-Commerce Transactions and Value
Prospects for future growth are still exceeding strongly

4.6 Million
2013 Online Shoppers

5.9 Million
2014 Online Shoppers

7.4 Million
2015 Online Shoppers
Indonesia is on track to become the 3rd largest
Consumer based in the world 8.7 Million
(after India & China) 2016 Online Shoppers

Average Spending $390 $440 $482 $516

On E-Commerce /year /year /year /year

2013 2014 2015 2016

Source : Investvino,2014
Indonesia Key Facts

Growth driven by Middle Class

Spending, Cheap Smartphones &
Affordable Internet
Online Shopping
Advantages
Faster Buying/Selling, as
well as easy to find products
Buying/Selling 24/7
More reach to Customers,
there is no theoretical
geographic limitation
Low operational costs and
better quality of services
Customers can easily select
products from different
providers without moving
around physically
Disadvantages
Anyone, good or bad can
easily start a business. And
there are many bad sites
which eat up customers
money
There is no guarantee of
product quality
Mechanical failures can
cause unpredictable effects
on the total processes
Trust is #1 issue in online shopping in Indonesia

Source : APJII, Indonesian internet profile 2012

E-Commerce Players
Indonesia Challenges

Bank Transfer & COD

still dominant as a payment method
Indonesia Challenges

Archipelago country needs Good LOGISTICS SERVICES

Logistics Services in
Indonesia
E-Commerce Logistics Challenges

Fulfillment Last Mile Delivery Reverse Logistics

Inbound QC Network Return

Inventory Delivery Management
Pick Leadtime Shipping Point
Pack Tracking and
Warehouse Tracing
Management COD Capability
System System
Crossdock Integration
E-Commerce Supply Chain
E-Commerce Logistics Goals

On Time
No Damage No Missing
Delivery

Access to Tracking
Delivery Milestone Inventory
& Tracing by
Update Accuracy
Customers

IT integrated
High
FIFO Order Management
Productivity
System
E-Commerce Life Cycle
Re-Work the Strategy
Key Success Factor
Innovations

Business Process, Business Model, & Innovative

Collaborations

Technology Innovation .
Dont just create mobile app, create mobile strategy

Finance & Investment Strategy

Pricing Strategy

High Delivery Cost outside Java

From China to Indonesia (aliexpress.com : Product Price less than $1, but
free shipping
Free Shipping is KING

50% shoppers will choose slower transit time for free shipping
7 business day is the average time shoppers willing to wait
50% shoppers abandoned carts that did not give an estimate
on delivery Source : UPS Com Survey 2014 UPS Pulse of the Online Shopper June 2014
 Thank You

9/8/2016
9/8/2016 25