Indonesia as an e-commerce paradise in just two years’ time may seem an idle dream to those who still struggle with connectivity as a massive burden in their lives. It is, however, an emerging reality for some of the people behind Indonesia’s growing online market ecosystem.
Meet Jungsung Lee, chief executive of Indonesian online marketplace Elevenia. Hailing from South Korea, he prefers to be called James and is one of those who have thrown off any doubts about Indonesia’s potential.
His company is already starting to tap the country’s huge e-commerce potential, he said in an interview.
While he acknowledged that Internet infrastructure is still far from ideal, there are methods to tackle the problem.
Elevenia, registered as a business entity as XL Planet, opened for business in March last year as a joint venture between mobile provider XL Axiata and South Korea’s online marketplace, SK Planet.
It began modestly, with around 500,000 products and 6,000 sellers.
In just a year, the online marketplace had almost a million registered members, two million products and more than 20,000 sellers.
Elevenia.co.id had 20 million visitors in February — 5 million of which were unique visits.
The online marketplace posted Rp 250 billion ($19.45 million) in total transaction value last year and in the first two months of this year had booked Rp 60 billion.
“It has exceeded [my plan]. We achieved more than our business target so our shareholders are so happy with us,” he said, noting that the investors now plan an additional capital injection within the next two years.
Initial investments from XL and SK Planet last year amounted to $18.3 million and another $24.2 million was injected earlier this year.
Calm, focused and friendly, Lee is clearly investor-friendly. At first glance he looks like any other businessman in his 40s but his nature manages to radiate a sense of security and optimism amid the hustle and bustle of an online business community populated by employees in their mid-20s.
Jokingly, one of his employees said his calmness is the product of months of training. Korean businessmen are not accustomed to talking with the press and dealing with informal work atmospheres, yet Lee has been able to keep his cool.
The Korean set out to explain the principles he believes are needed for success in the online world.
“The first thing is trust. The second is good products, then good prices and convenience. For the Indonesian market, trust is very important; it is the customers’ basic demand,” he said.
Many Indonesians remain hesitant to use online shops due to a lack of information. Potential customers think that fraud and crime are easily concealed in an apparently anonymous digital world.
That is not the case with Elevenia, Lee said.
“We use a system called escrow,” a formal account which holds funds prior to completion of a transaction, allowing Elevenia to guarantee a safe transaction for both buyer and seller.
Elevenia also has some unique traits. For instance, customers can directly ask Elevenia to find a certain product, local or otherwise.
“If there is something the customer can’t find, they can inform us, then we will get the product. [Especially] products from Korea. We have the experience, we have good channels. From Korea, we can get anything,” said Lee.
To further the trust factor, the company has set limits on trading. It will not sell counterfeit goods, drugs or other illegal items.
The growing business of Elevenia is a glimpse of Indonesia’s blossoming e-commerce industry.
A survey conducted by the Indonesian Internet Providers Association (APJII) and University of Indonesia shows that online shopping is catching on fast with younger Indonesians.
Samuel A Pangerapan, chairman of APJII, said the survey showed that there were 88.1 million Internet users in Indonesia in 2014. A huge portion — 49 percent — are young, around 18 to 25 years old, with 51 percent of them women.
They use the Internet for various reasons, from networking through social networking applications to searching for information and exchanging messages, downloading and sharing videos.
Internet users’ behavior has shifted, Samuel stated, from only using the Internet to interact — like exchanging stories from blogs, chatting through messaging services or talking directly through video chat — to more complex behavior like trading.
In its latest report, APJII said many Indonesian Internet users have started to use the Internet for shopping. Around 11 percent of users purchased goods online in 2014, double the number a year earlier. The vast majority — 85 percent — browse the Internet with their phones, although many also use laptops, tablets and PCs.
To meet this multiple gadget lifestyle, Elevenia has made sure it can be accessed from website, mobile web and mobile application.
According to Lee, being in every digital space was critical, since competition is beginning to intensify as companies recognize Indonesia’s e-commerce potential.
The number of popular e-commerce sites in Indonesia is growing each year. Local sites with a similar business model to Elevenia include Tokopedia, BukaLapak, Quoo10, Lazada and Rakuten, and new ones keep coming.
“We welcome the competition,” said Lee. “At the moment, this market is really in its early stage. It’s not mature, that’s why at this moment I don’t think the other players are our competitors. At this moment, they are our cooperators.”
Elevenia is keen to work with other e-commerce players in Indonesia to build an ideal ecosystem.