Multiply closure part of online learning curve
The Jakarta Post
The shutting down of the once prominent e-commerce site, Multiply, has sent ripples through the fledgling online business industry. For fellow players, Multiply's closure signals tougher competition and for online sellers, the perennial need for brick-and-mortar stores.
Multiply, through multiply.co.id, posted an announcement that the site would shut down on May 6 and urged merchants to clear their accounts and transactions before the company stopped final operations on May 31.
The closure marks the end of the site that started out as a platform for bloggers; it had announced in August 2012 that it would end blogging services to focus solely on e-commerce.
Jullian Gafar, the general manager for marketing and merchandising at PT MetraPlasa, said the 'game is warming up' for e-commerce players, especially those whose operations were based on the marketplace business model.
'Consolidations are expected over time, but this does not mean that the industry is not promising,' Jullian said.
PT MetraPlasa is a joint venture e-commerce company jointly owned by state-owned telecommunications company PT Telekomunikasi Indonesia (TLKM) and the popular US e-commerce site, eBay.
Besides plasa.com, market players include homegrown company tokopedia.com and rakuten.co.id, a site initially introduced in Indonesia by Japanese online giant Rakuten Inc. and the local media conglomerate, the MNC Group.
William Tanuwijaya, the founder of Tokopedia, added that the marketplace segment was a 'winner-takes-all model'. Generally, only the largest sites, such as eBay in the US and Rakuten in Japan, survived.
However, the industry in Indonesia was relatively new, he said, and hence, needed time to mature by educating users on the marketplace model.
He added that the market education that e-commerce players were actively engaged in rendered the closure of Multiply a loss to all.
'We at Tokopedia feel this loss because we have always benchmarked ourselves against Multiply, and we have been collaborating on educating people on the marketplace model,' he said.
Yet, the closure of Multiply has been a wake-up call for merchants.
Nurindah Kurniawati, a Multiply merchant who received the news about the closure through an official email, said she now had to find a new place to display her wares, which consisted primarily of kitchen utensils.
However, Nurindah, who earned more than Rp 5 million (US$515) per month from her Multiply 'shop', said she would not suffer financial losses, although she had paid a Rp 375,000 annual fee for 'trusted seller' status at Multiply.
'I'll be ceasing all transactions but most of my buyers deal directly with me,' she said.
Buyers could pay for purchases via their credit cards on the website or they could contact merchants directly to settle payments.
She added that the closing of Multiply taught her the importance of having her own website and physical store.
Ria Sari Dewi, another Multiply merchant, added that she would have to find alternative sites to sell her merchandise ' mainly headscarves.
'The challenge is in starting from scratch at another website when buyers have found me through Multiply,' she said, adding that she would concentrate on displaying her wares on her Facebook page for the time being.
'What has happened will not discourage me from being a merchant,' she said.
Novantheo Permadi, a Yogyakarta-based seller, said his clothing boutiques were the backbone of his business.
'But so is selling through BlackBerry Messenger. Buyers find buying via Multiply a hassle because they have to make too many clicks,' he said.
He added that certain Multiply policies had baffled him when he was still an active merchant. The site, he said, did not collect sales commissions from merchants but instead, paid for all shipping costs on transactions that took place on the site.
'They once even shipped one of my orders to the customer in Papua. That made me wonder how they managed to cover their expenses,' he said.
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