indonesian payment challenges 2015
TRANSCRIPT
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THE CHALLENGE IN INDONESIAN PAYMENT CHANNELS AND HOW
YOU CAN SOLVE IT - PART 2
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Part 2 will discuss:
• ecommerce sites that are already making money
• why Indonesian customers hesitate about paying online?
• what solutions that ecommerce businesses can employ to overcome this
• actionable insights going forward (Source: SP eCommerce/Bank Mandiri
Indonesia Economy Update 2015/KPMG Mobile Payments)
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In 2013, Amazon was the most popular B2C site in Indonesia. Despite having no local presence,
pricing or logistics support, their breadth of products drew the highest amount of visitors.
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Lazada Indonesia, Rocket Internet’s answer to Amazon, made the jump to the top spot in 2014. This comes after their
rebranding in 2014 that showed a shift of focus away from consumer electronics to a larger range of lifestyle products.
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Lazada is also better at serving the local market with native language marketing
campaigns, same day delivery and a variety of custom payment revenue.
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Zalora, Rocket Internet’s fashion venture, is another big player in the local market. Operating in ten countries
throughout Asia Pacific, their Indonesian store accounts for the largest share of revenue across the group.
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Tapping on the potential of Indonesia, Japan also entered the market with Rakuten Belanja Online, a standalone subsidiary of the Japanese
giant Rakuten operating locally. In a culture with such distinct characteristics and low levels of risk-taking, a localized strategy such as adding an Indonesian word Belanja (which means expenditure) to
a company name increases approachability and trust.
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Kaskus is the leader of online forums in Indonesia. As of May 2014, it reported to have over 6.8 million registered users that
create 4,000 new threads every day. The site also sees more than 750 million page views and 25 million unique visitors every
month. A visitor typically spends about 29 minutes on the site every day.
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Kaskus’s biggest competitor is OLX, formerly known as TokoBagus. It is the
largest eCommerce platform and Indonesia’s third largest local website.
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Of special mention is the consumer-to-consumer (C2C) marketplace Tokopedia. Claiming to be the biggest eCommerce site in Indonesia,
they are drawing ten million monthly visitors with shoppers buying a total average of two million products a month in 2014. From the
businesses already present, it is clear there is a local audience ready for eCommerce, even if it is still in the early stages of development.
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JOIN THE DISCUSSIONFormer Yahoo!
Indonesia CEO and MNC media network People
Leader, Roy Simangunsong chairs a session on “What’s the
Future of Retail Payments? 1440H, 13 August 2015 at PSRA
2015, Le Méridien Jakarta. 13-14 AUGUST 2015 | LE MÉRIDIEN JAKARTA
Follow @PaymentsAsia
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ONLINE PAYMENTSOnline payments in Indonesia are low,
with credit card penetration at only 4.5%.
Businesses must therefore present themselves as being reliable and
trusted online retailers by prioritizing data and payment
security.
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KEY CHALLENGES FOR INDONESIA
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CUSTOMER HESITANT ABOUT ONLINE PAYMENTS
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Challenge for BrandsOnline payments in Indonesia are low,
with credit card penetration at only 4.5%.
Businesses must therefore present themselves as being reliable and
trusted online retailers by prioritizing data and payment
security.
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Indonesians most risk averse in ASEAN
Compared across the Southeast Asian region, Indonesians are
the least likely to make an online purchase due to their
risk averse nature.
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Challenge for BrandsOnline payments in Indonesia are low,
with credit card penetration at only 4.5%.
Businesses must therefore present themselves as being reliable and
trusted online retailers by prioritizing data and payment
security.
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Just for RESEARCHIndonesians tend to use the
internet mainly for research - 80% go online for price
comparisons before buying in-store, compared to the
regional average of 60%.
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FEAR of FRAUDA 2013 Nielsen survey
revealed that the biggest obstacle to eCommerce was the customers’ fear of fraud,
with 34.6% of customers citing this as a reason for not making an online purchase.
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Credit Card Info is a prized possession
According to the survey, six out of ten consumers said they were unwilling to
provide credit cards details online.
Another study by Google in 2013 revealed that customers’ lack of trust in credit card
security on mobile devices was the top reason for not purchasing online via their
smartphones.
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A TIP FOR ECOMMERCE ENTRANTS: HAVE A SECURE
PAYMENTS CHANNELData and payment security
is therefore a key consideration for businesses
to present themselves as being reliable and trusted
online retailers.
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13-14 AUGUST 2015 | LE MÉRIDIEN JAKARTA
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MEET INDONESIA’S PAYMENTS ECOSYTEM
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the challenge of selling online in indonesia
21.5% of consumers were not comfortable making a
purchase before they could touch and feel the quality of the items they were buying.
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ORDER ONLINE THEN CALL TO VERIFY
While the average European fashion website receives customer queries on only 5% of orders, Zalora in Indonesia receives an average of one phone call or message per order from concerned customers to
confirm if their request has been received, a strong indicator of customers’ concerns
with online shopping.
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Need for More Widely Accepted Payment
Methods
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THE CHALLENGE ON PAYMENT COLLECTIONS
Given Indonesians’ preference for traditional payment methods, such
as Cash on Delivery, eCommerce businesses entering Indonesia may
find payment collections challenging, especially if they are used to online payment systems.
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PIN IS MIGHTIER THAN THE PEN.
Many newer forms of payment such as internet banking are not widely used and customers typically choose to make payments directly
through an ATM to a retailer’s account.
This also results in consumers often deciding to simply walk into a brick-and-mortar store and buy a product immediately, instead of making
the final purchase online through a credit card.
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BREAKDOWN OF PAYMENT METHODS IN INDONESIA
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PAYMENT INNOVATION HOLDS THE KEY.
With Indonesia’s eCommerce sector having a low uptake of credit cards, local eCommerce players have developed unique
payments solutions.
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not cool to only have one payment channel.
Travel website Tiket.com offers 14 different methods to make a payment, more than any other
online store in Indonesia.
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ecosystem specific payments
Kaskus took it a step further, by creating their own payment system for their C2C marketplace.
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behold free deliveryOther sites such as Bhinneka use free delivery within Jakarta to encourage
customers to make online transactions.
Theses increased payment options have also increased the growth of Indonesia’s
eCommerce ecosystem as a whole.
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e-WALLET IS TRENDING
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Need for Sophisticated Logistics Solutions for eCommerce Businesses
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CAN YOU CONNECT over 17000 islands?
Indonesia’s infrastructure is a challenge to both businesses and customers alike. Rapid
urbanization has resulted in increased traffic congestion,
driving people to shop online.
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WANTED: RELIABLE SUPPLY CHAIN PARTNER
This growing demand for more sophisticated logistics solutions for eCommerce businesses will lead to
further investments of global and regional logistics players in the country.
An example of such an investment is the agreement between Singapore Post and Pos Indonesia, who have
come together to improve the distribution and delivery of international postal items so as to cater to the growth in eCommerce traffic and strengthen the
regional eCommerce logistics network.
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WANTED: RELIABLE SUPPLY CHAIN PARTNER
With this increase in online shoppers, eCommerce businesses
need to work closely with an experienced and reliable logistics
and supply chain partner to ensure timely delivery of goods to
their end customers.
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MEET INDONESIA’S RETAIL BANKING
MOGULS
13-14 AUGUST 2015 | LE MÉRIDIEN JAKARTA
Register at [email protected]!
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