- 11/05/2016
- Category: Commentaries
China’s E-commerce leader, Alibaba through its subsidiary (UCWeb), held a program to help business e-commerce in the country.[1] The aid is planned in the form of organizing joint campaigns, enriching way of web designing and product development as well as how to lure a user to a matter of getting traffic to their respective sites. The campaign, named Craddle Program explains that the current local e-commerce company has four challenges that must be addressed, namely customer acquisition, user engagement, user experience and brand awareness.
The assistance provided by Alibaba sound looks promising, considering that Alibaba Group IPO in New York in 2014 set a record as the world’s biggest public stock offering. However, does Indonesia’s e-commerce industry need it?
“It is needed for the actors of e-commerce to reconsider the help of Alibaba; whether this is in the interest of Indonesia or Alibaba Group.”
One thing to consider is that Indonesia is a unique market. Besides, the potential number of online shopper is high, up to 8.4 million people with a transaction value of up to $ 4.89 billion during the year of 2016. There are tons of problems exist for e-commerce to grow. Below are some of those.
Infrastructure
The delivery of goods to customer becomes a problem when the road infrastructure is not good, as well as inter-island shipping which makes the cost becomes expensive. So, e-commerce should create its own solution of this case. These include the establishment of in-house delivery service by e-commerce players, Online to Offline (o2o) concept, and the construction of distribution centers in various parts of Indonesia.[2]
Payment
The vast majority of Indonesians do not own credit cards, making it harder for them to purchase items that require electronic transactions. Part of them still prefer offline payment method (e.g Cash on Delivery). According to A.T Kearney’s report, Indonesia has the most unbanked population (70 to 80 percent) in the world.[3] This leads to poor application of e-payment. Consumers in Indonesia today still prefer online shopping to the old way like passing a group in BlackBerry Messenger (BBM), classified marketplace, forums, to social networking services such as Facebook and others.
Customer Experience
According to Alexander Rusli, President Director and CEO of Indosat, Indonesians are actually still not accustomed to doing online shopping activities.[4] As a result, e-commerce providers should continue to educate and encourage public to do online transactions more often and become loyal to online shops of their choice.
Support and Protection for The Actors of E-commerce
The e-commerce players in Indonesia are getting confused by the uncertainty of regulation applied upon them by the government. The unsocialized taxation scheme and uncertain new regulation, added with the certification system that will be implemented upon all online merchants, make everything so problematic for the e-commerce players. Until now, there are only the Draft Regulation on E-Commerce (E-Commerce RPP) as a candidate for the implementing regulations of the Act No. 7 2014 on Trade (Trade Act). During the draft rules had not been ratified, the main framework of laws and regulations related to e-commerce activities are still centered on Law No. 11 of 2008 on Information and Electronic (ITE Act). Many assume that this Act has not been able to give protection towards e-commerce actors, in terms of the definition of e-commerce, e-commerce implementation provisions, the provisions on certification body for electronic-based business, as well as the constant publication and encouragement on the ITE Act.
Based on the four points above, I personally think that the help offered by Alibaba are not able to cover the problems that we have. From the field of assistance offered, only user engagement and experience that can help. Though the points of infrastructure, payment, and the support of no less importance. Instead, infrastructure and support points are points that can be resolved by the government, which means the only recourse of these points is the government. If we would like to take it a bit further to the far concept of smart city and digital society in the future, the proliferation of digital industry is one of the strong arms to hold and make that happen. Conducive environment for everyone to innovate and transforming economic value is also central. However, steps taken by the government must realy be considered carefully. It is needed for the actors of e-commerce to reconsider the help of Alibaba; whether this is in the interest of Indonesia or Alibaba Group?
[1] Y. H . Widiartanto, ‘Alibaba Punya Program Bantu E-Commerce Indonesia’, Kompas, April 28 2016,
[2] S. Bachdar, ‘Tiga Tantangan E-Commerce Indonesia Menurut Rakuten’, Markeeters, January 15 2016,
[3] R. A. Nugraha, The Issue of E-Commerce In Indonesia In 2015’, Daily Social id, March 20 2015,
[4] D. Mahardy, ‘Apa Saja Masalah E-Commerce Di Indonesia?’, Techno.id, June 9 2015,
