Three retail executives share their views on the rapid growth of technology-driven e-commerce at the Retail Asia Forum.
E-commerce is expected to continue growing rapidly in Indonesia, with a GlobalData report predicting the market will grow by 15.5% in 2024 due to a shift to online shopping.
The market is forecast to grow 18.3 percent to reach $37.6 billion (IDR 573 trillion) in 2023 and $43.4 billion (IDR 661.9 trillion) this year, indicating the growing popularity of e-commerce among Indonesians.
This trend was acknowledged by Indonesian E-Commerce Association (idEA) vice president Budi Primawan, who noted that Indonesia's e-commerce landscape continues to evolve, with shoppers becoming increasingly accustomed to ordering goods online from anywhere.
“Similarly, small and medium-sized enterprises can now sell without having a physical store,” Budi said during a panel discussion titled “Revolutionizing Retail: Innovative Approaches to E-commerce Success” at the Retail Asia Forum held recently in Jakarta.
The panel also discussed e-commerce trends and strategies, including leveraging the latest technology to enhance shopper experience and the competition between offline and online channels.
Some of the prominent panellists included Alfin Lie, Vice President of Sales at Bhinneka and Teresa Wibowo, CEO of Ruparupa (Kawan Lama Group). Also on the panel was Budi, with Reynard Praharsa, Chief Operating Officer at MDI Training, moderating the discussion.
Personalized Shopping
Budi, who also serves as Lazada Indonesia's vice president for government relations, explained the important role of technology, particularly artificial intelligence (AI), in enhancing user experience.
AI has been used in e-commerce since 2016, but its bigger impact will become apparent with the launch of ChatGPT in late 2022. Budi explained that the marketplace's AI algorithms help surface products relevant to consumer searches, making it easier for consumers to find what they need.
On-demand services like GrabFood and GoFood food delivery use a combination of back-end technology and smartphones to help users find nearby restaurants.
“In addition, technology is used in logistics to assist courier companies in managing their routes, helping to speed up and simplify deliveries,” Budi said.
According to a GlobalData report, e-commerce growth is spreading beyond major cities, with second- and third-tier cities also seeing significant adoption of e-commerce, supported by improvements in digital infrastructure and logistics.
Teresa, CEO of Ruparupa, discussed the introduction of new technologies to enhance the shopping experience.
Ruparupa is an e-commerce platform that consolidates various businesses under the Kawan Lama group, including Ace, Informa and Toys Kingdom, providing an omnichannel experience with over 600 integrated stores.
Ruparupa leverages algorithms, machine learning and AI to provide shoppers with a personalized experience and help them find their desired products more easily.
“When it came to e-commerce technology, we initially debated whether to buy or build,” Teresa recalls. “At Lepalpa, we initially bought technology, but now we're building our own to achieve hyper-personalization. We can read data to determine which shoppers want to buy toys, tools, or furniture, and then, with the help of AI, guide them to find what they want.”
Alfin from Bhinneka shared a different perspective: Focused on the B2B (business-to-business) sector, Bhinneka started as Indonesia's first IT e-commerce platform and now serves both the B2B and B2C (business-to-consumer) markets with products in the IT, MRO, solutions and services sectors.
“Personalisation is different in B2B because the buying process is essential, and we adapt to how the customer wants to proceed. For example, customers often need a quote, so we offer an e-quote functionality that can automatically generate what they need to make a purchase,” explains Alfin.
Additionally, B2B customers are looking for more payment options beyond just cash, so the company is partnering with fintechs and other financial services to offer personalized payment terms for each customer.
“For example, some customers require longer payment terms, while others prefer to pay in cash,” Alfin said.
Offline and online competition
Panelists also discussed the differences and competition between offline and online stores, with Teresa noting that while there were initial concerns about this competition, offline stores are now benefiting from online orders, reaching new customers in previously untapped segments.
Regarding the price difference between offline and online, Budi explained that various factors affect prices, including store rent and delivery costs.
Alfin emphasized the importance of maintaining customer loyalty in B2B. To achieve this, “Bhineka combines technology with human interaction to provide a personal, reliable service,” he said. This reflects the company's focus on sustainable growth, with a focus on financial metrics, operational efficiency and a customer-first mentality.
At the end of the Jakarta Forum session, the panelists identified the main trends for the future of e-commerce, with Budi citing increased use of technology, advances in logistics and the growing need for shopping convenience as key trends.
Meanwhile, Teresa said personalisation, seamless omnichannel experiences and live shopping will be key trends.
Meanwhile, Alfin stressed the importance of e-commerce businesses adapting, the importance of data as the “new oil,” and the importance of balancing online and offline experiences.
Going forward, e-commerce is expected to continue to grow at a rapid pace, driven by technology and the need for better shopping experiences. To stay relevant and successful in this industry, a combination of technological innovation, a deep understanding of customer needs, and market adaptation will be key.
