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Industry giants prepare for digital market war

Big companies with strong brick-and-mortar bases are getting more serious about investing in e-commerce platforms, getting prepared for a future digital war when everything will be available online

Khoirul Amin (The Jakarta Post)
Tue, April 28, 2015

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Industry giants prepare for digital market war

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ig companies with strong brick-and-mortar bases are getting more serious about investing in e-commerce platforms, getting prepared for a future digital war when everything will be available online.

'€œWe don'€™t want to be left behind. We are investing in information technology, both in the facilities and human resources,'€ Panorama Group president director Budi Tirtawisata said when asked about his company'€™s stance on digital sales.

The group had invested millions of dollars to develop its online platform over the last four to five years, he estimated.

The publicly listed tour and travel group, whose official name is PT Panorama Sentrawisata, currently owns various online retail sites, including tour website panorama-tours.com, hotel booking site rajakamar.com and daily deal site travelicious.com.

Budi said recently that with many more people having access to the Internet, revenue contributions from online sales would likely leapfrog to between 40 and 50 percent in the near future from around 10 percent at present.

Around one third of the country'€™s 250 million population are now connected to the Internet and the ratio is forecast to climb to over 50 percent of the population by 2017.

Panorama'€™s gross revenues climbed by 30 percent to Rp 3.45 trillion (US$265.7 million) last year from Rp 2.64 trillion in 2013.

Also joining the fray in the '€œborderless'€ market, garment manufacturer and fashion retailer PT Trisula International has committed to dedicating some investments toward developing its online shops.

'€œIn the long run, we want to spend around Rp 5 billion for e-commerce and advertisements,'€ said Trisula president director Lisa Tjahjadi.

The publicly listed company had already spent around Rp 1.2 billion to set up online stores and to advertise, she said.

Trisula has made a number of its products, including Bonds, Jobb, G2000 and Jack Nicklaus, available online.

Lisa said that Trisula'€™s online sales had surged more than 100 percent each month as it was quite new and that the country'€™s e-commerce market kept growing.

Indonesia'€™s e-commerce market is estimated to have a total value of Rp 295 trillion next year, a huge increase from Rp 94.5 trillion in 2013, according to the Indonesian E-Commerce Association (idEA).

The government, meanwhile, has previously stated that it aims to see e-commerce make up around 8 percent of the country'€™s total retail business.

On another occasion, a professor with the IMD Business School, Donald A. Marchand, said there was no reason for any company to not start going digital as the digital technology shift was happening in every single industry.

'€œIn every industry, there are leaders in digital space who are experimenting and innovating in their business models and there are laggards and followers. ['€¦] if you want to be leaders then you have to recognize who'€™s out there, doing innovation in your industry that could lead to more advantages,'€ he told The Jakarta Post.

At present, industry giants like Panorama and Trisula will not only compete with their offline peers, but also with digital natives like ticket-booking site Traveloka.com and online store and marketplace lazada.co.id.


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