China's e-Commerce Spreads to Indonesia

AliExpress is a multi-language retail marketplace owned by the Alibaba Group, which also owns 48% of China Smart Logistics and is a 10.35% stakeholder in listed SingPost in which it invested S$312.5 million (US$250 million) as part of a “strategic cooperation” aimed at improving the efficiency of cross-border e-commerce in May 2014.
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According to AliExpress, from this month Indonesian buyers can now expect their packages arrive within two weeks, much faster compared to over 35 days previously.

AliExpress is able to compete effectively against existing domestic shopping websites in part because the site is part of Alibaba Group’s e-commerce ecosystem, which means it can provide end-to-end online shopping solutions including delivery and e-payment.

Mulyono, who heads up AliExpress in the country and who like many Indonesians uses a single name, said: "This is important in a country where shopping on the Internet is still an unknown proposition to most consumers. “It’s much safer and more convenient to buy things on our platform if you compare with local competitors."

Indonesia’s e-commerce market is still small compared to China and India, but according to the Indonesian Chamber of Commerce and Industry (KADIN) it is expected to grow to US18 billion by 2015, making it Southeast Asia’s largest.

Consumers, however, are faced with several obstacles to purchasing online, with roadblocks including low Internet penetration, unclear e-commerce regulations, complicated banking services, low investment in cellular networks, underdeveloped and inefficient transport infrastructure, lack of easy payment methods and quick delivery methods.

AliExpress in December launched a localised version of its website where Indonesians can now shop in their home language and in English, choosing from a range of products that have been selected to appeal to local preferences.

According to Mulyono, the site’s main advantage is the depth of mostly Chinese-made products, such as the latest fashion apparel and consumer electronics, that are available from the AliExpress marketplace at prices that are affordable in an emerging economy.

“A lot of these products you cannot find in Indonesia, or if you try to find it through traditional retailers, you will have to wait for two or three months,” he said.

Mulyono stressed that AliExpress is not just a platform that allows Chinese retailers and manufacturers to sell direct to consumers worldwide. As the site becomes established in Indonesia, the company plans to add Indonesian merchants and manufacturers to the seller mix.

Apart from a wide range of foodstuffs, the country has a growing manufacturing base, with companies including Chinese OEM manufacturer Foxconn and appliance maker Haier setting up factories in the country.

According to Mohamad Said Haryadi, vice president for international services at Pos Indonesia, Pos Indonesia will support the cooperation with AliExpress and Singapore Post with all its capacity, including 6,000 delivery postmen in the country.

"All customers will be able to monitor and trace the goods through website ems.posindonesia.co.id. Pos Indonesia also has support from Indonesia Customs Authority to guarantee the smooth inspection process of these online goods,” Haryadi pointed out.

Nol van Fenema