Saturday, August 06, 2011
Multiply Web Site Eyes Boom In Online Shopping
Source: Jakarta Globe
Electronic commerce in Indonesia is growing significantly and the volume of transactions is likely to surpass neighboring Philippines within three years, an industry executive has said.
“Indonesia is the ‘big prize’ for Southeast Asia, and we are going to see the result in two to three years from now,” said Peter Pezaris, co-founder and chief executive of social commerce site Multiply. “In three years from now, I am sure Indonesia will surpass the Philippines.”
Pezaris, who lives near the company’s headquarters in Florida, visits Indonesia once a month to keep an eye on the market here. The current growth for e-commerce is more than doubling every year, he said.
Multiply has about 43,000 sellers and seven million unique visitors every month in Indonesia, making the country its second-largest e-commerce market. Worldwide, it has 20 million unique visitors monthly.
“Indonesia will hit a tipping point when it will be common to buy online,” Pezaris told the Jakarta Globe at Multiply’s office in Gandaria City, South Jakarta.
In Indonesia, less than 1 percent of retail purchases were transacted online, compared to 15 percent in United States, Pezaris said. In China, that rate was 2 percent, but all online transactions there went through just one Web site, he added.
Andi S. Boediman, a partner at venture capital firm Ideosource, cited data from global market research firm Synovate, suggesting the country’s e-commerce market conducted about $70 million in transactions a year, with each transaction averaging $20 to $30. But growth was expected to increase 50 percent next year, he added.
Pezaris said there were some obstacles to e-commerce in Indonesia, such as payment systems. “Credit card penetration is still very low and people are still concerned about safety on the Web,” he said. Because of that, some transactions in Multiply still happen offline, where buyers and sellers meet directly.
The US-based company established its biggest representative office in South Jakarta about two months ago and has about 50 local employees.
The company, which has smaller offices in the Philippines and the United States, is currently occupying about 30 percent of its total space at Gandaria City but is renovating the rest. The company has plans to hire 150 employees by the end of the year.
Some analysts view the rapid rise of Internet use in Indonesia as reason for companies to expand in e‑commerce.
In the country’s major cities, one in five people have access to the Internet, double the rate five years ago, said Yongky Susilo, a retail analyst at Nielsen Indonesia.
“E-commerce has a big potential in Indonesia because the number of Internet users here is growing rapidly,” he said.