Lippo Group’s new e-commerce unit MatahariMall is embarking on an ambitious expansion plan, aiming for a 20 percent market share of Indonesia’s web-based retail sector by 2020, its chairman said on Wednesday.
MatahariMall.com chairman Emirsyah Satar said the potential of the e-retailer, which is slated for an official launching in September, is similar to Chinese e-commerce giant Alibaba’s in light of Indonesia’s huge untapped e-commerce market.
Indonesia’s e-commerce market is currently worth around $1.3 billion, constituting only 1 percent of the national retail market.
“The e-commerce markets of other countries can reach between 5 and 8 percent of total retail sales, so we are confident the market volume can expand to between $20 billion and $30 billion by 2020,” Emirsyah said at the MatahariMall office in Jakarta.
Unlike other online retailers, MatahariMall will offer the O2O, or Online to Offline, system that would allow customers to order products online and see the products first-hand at a nearby Matahari or Hypermart store, both of which are affiliated with the Jakarta Globe through Lippo Group.
“We have a very solid footprint network in Indonesia and we have the experience in offline retailing through Matahari and Hypermart,” said the former president director of Garuda Indonesia.
MatahariMall, Emirsyah added, is also partnering with various top brands in the lifestyle, fashion, automotive and electronics sector to enrich the array of products available to customers.
“We believe MatahariMall.com will be the [region’s] best and biggest online retail store,” he added.
Emirsyah is also urging the government to support the online retail industry through Internet infrastructure and regulations that support a growing local industry.
MatahariMall has appointed Credit Suisse and Bank of America Merrill Lynch to lead its first round of financing for an amount expected to be between $200 and $250 million. This financing would make MatahariMall the most valuable e-commerce company in the country.
The online retailer has also built a main warehouse of 10,000 square meters in Halim, East Jakarta, that can accommodate thousands of products.
Lippo Group, one of Indonesia’s largest business conglomerates, has committed to invest $500 million for the next three years in its e-commerce arm.