Jakarta Globe, Muhamadl Azhari,Feb 25, 2015
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| Lippo Group representative John Riady, center, with MatahariMall.com managers, from left, product and technology head Goh Yiping, online marketing head Timothius Martin, marketing and partnership head Regan Dwinandadan and sales head Denis Raf. (B1 Photo/Ruht Semiono) |
Jakarta.
Lippo Group announced on Wednesday the launch of an Indonesian e-commerce
venture, MatahariMall.com, solidifying its position as the largest multi-format
Indonesian retail group.
Lippo has
allocated $500 million in investment over the next two to three years to create
an e-commerce company with an expected $1 billion in sales within
one-and-a-half to two years that will become the “Alibaba of Indonesia.”
MatahariMall.com
will bring Lippo’s consumer retail division to more than $25 billion in five
years, 20 percent of which will come from online retail.
MatahariMall.com
will offer the best deals, biggest giveaways and largest selection of goods
covering fashion, beauty, electronics, home, groceries, books, entertainment
and more, Lippo Group said in a statement.
In addition
to offering the largest selection of goods, MatahariMall has been appointed as
the exclusive online retailer for some of the most popular brands in Indonesia.
It is also
the first and only online-to-offline, or O2O, e-commerce company in Southeast
Asia, allowing customers to pay, collect and return their goods in all 131
Matahari Department Stores across Indonesia, when it begins operations in
March.
“Online
commerce is a $100 billion opportunity,” said John Riady, a representative of
Lippo Group.
“MatahariMall
will be the number one in e-commerce. There is nothing like it in Southeast
Asia. Our vision is to build the most powerful ecosystem that brings together
buyers and sellers to do business anytime and anywhere.”
The $500
million war chest will be used to assemble “a strong e-commerce management
team, build a market place with the most number of items and build the best
supporting infrastructure to support the online service.”
“Most
importantly, this retail online service is created by a business group from
Indonesia. … We understand what Indonesian consumers want,” John said.
Additional
Lippo affiliates — including Hypermart, the country’s largest chain of
hypermarkets operated by Matahari Putra Prima, and Books & Beyond — will
also support the e-commerce site.
Long-time
suppliers of Matahari Department Stores will be given their own digital space
at MatahariMall.com to offer their range of products online, John said.
“Indonesian
online retail will grow 10 times over the next five years,” said Matahari
Department Stores chief executive Michael Remsen.
“Together
with MatahariMall, we are committed to the future of e-commerce. All of our
suppliers and partners are 100 percent behind this.”
Matahari
Department Store, a Lippo company, is Indonesia’s largest operator of
department stores.
“E-commerce
is the future of retail,” said Communications and Information Technology
Minister Rudiantara.
“We are
thrilled and fully supportive to see Lippo take this bold step into e-commerce.
May this venture be a great success and benefit the country.”
Lippo said
in a statement that it had an unparalleled track record in executing and
building winning and innovative companies: Matahari in department stores,
Hypermart in food retailing, First Media in cable and multimedia, Siloam
Hospitals in health care, Bolt in 4G telecommunications, BigTV in pay
television, and 60 Lippo Malls throughout Indonesia.
Lippo has
the scale, the reach, the know-how, and innovation DNA to dominate e-commerce,
it said, and MatahariMall is led by a proven team of experienced e-commerce
industry experts.
“The
digital revolution will transform the world,” said Ihlam Habibie, chairman of
the National Information Technology and Communications Council.
“Look at
Amazon in the US and Alibaba in China. I am excited to see Lippo enter in such
a big way. They are very committed to technology and innovation, which is the
most exciting opportunity in Indonesia today.”
Jan
Metzger, the managing director and head of technology, media and
telecommunications at Credit Suisse, was equally optimistic about the future of
Indonesia’s e-commerce industry and Lippo’s ability to position itself as the
leading player.
Credit
Suisse calls Matahari Department Store “the number one department store” and
“our top pick in the retail space.”
As the
largest retailer in Indonesia, the Lippo Group is well positioned to be number
one in e-commerce. Its consumer businesses have a combined annualized revenue
of more than Rp 60 trillion ($4.7 billion) and growing consistently at more
than 20 percent.
Hypermart,
meanwhile, is one of the fastest-growing hypermarket chains in Asia, with
market share increasing to 40 percent in 2014 from 24 percent in 2007.
Lippo’s
entry into e-commerce next month seems to be well timed. While online retail
accounts for just 0.7 percent of total retail sales in Indonesia, it is
projected to grow 10 times over the next five years. Online retail is growing
fastest outside of Jakarta, where Lippo has substantial businesses.
“Indonesia
is the last remaining, large, underpenetrated e-commerce market in Asia.
MatahariMall is the single-largest e-commerce opportunity today,” John said.
Indonesia’s
Internet penetration last year stood at 80 million, or about 32 percent of the
total population, and a significant leap from 2011’s figure of 47 million.
In a report
released in September last year, global research company Nielsen confirmed the
massive prospects of e-commerce in Indonesia.
A record
number of consumers went online for their purchases last year, the report said.
The most sought-after products include airfare and hotel bookings, e-books,
clothing, accessories and shoes.
In a
statement attached to the report, Nielsen Indonesia’s executive director of
consumer insights, Anil Antony, said that “e-commerce retailers’ product and
service offerings have evolved significantly [in Indonesia] in recent years as
the popularity of online shopping has increased.”
“Consumers
are [...] increasingly searching out online channels to research and purchase
the products and services they need and want,” he said.
GlobeAsia
is affiliated with Lippo.
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