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Jakarta Post

Shopee hungrily eyes huge domestic e-commerce market

Dylan Amirio and Damar Harsanto
Jakarta   ●   Thu, March 24, 2016

Indonesia'€™s burgeoning e-commerce market pie is large enough for all players to get a decent slice to chew on, and there is therefore no need to worry about competition, according to Singapore-based mobile-first online marketplace Shopee.

Shopee says it does not need to steal customers away from other competitors because Indonesia'€™s market has room for everyone.

'€œOur business model is like Alibaba, which takes advantage of the huge market,'€ Shopee regional managing director Rainal Lu said, referring to the Chinese e-commerce giant.

With a population of more than 250 million, Lu said, Indonesia is the firm'€™s key market, citing that Indonesia shared with Taiwan the top two spots in terms of Shopee users. Currently, over 2 million downloads of its app have been recorded. Shopee also operates in Singapore, Thailand, Malaysia, the Philippines and Vietnam.

With smartphone ownership expected to reach 69 million at the end of 2016 and with 164 percent growth in mobile online purchases between 2014 and 2015, Shopee has opted to enter the market in the form of a mobile app.

'€œWe are proud to have begun initially as a mobile service, instead of a web service,'€ Lu said, adding that a web service might appear in the future.

Indonesia'€™s rapidly growing numbers of smartphone users saw smartphone shipments into the country surge by 17.1 percent year-on-year to 29.3 million units last year, with 8.3 million shipped in the fourth quarter alone, according to IDC data.

Shopee, which has been operating in Indonesia since an official launch in December 2015, operating under PT Shopee International Indonesia, also provides several social media integration options.

The app has an Instagram importer feature to make it easier for sellers to transfer the products they showcase on their Instagram accounts to their Shopee accounts. It also provides a Facebook-like news feed allowing users to receive updates on their favorite sellers, as well as the ability to use social media features like hashtags to facilitate product search and sharing, recommendations, trending sellers and products and sharing options to other social media.

Another notable feature is a live chat that enables the seller and the buyer to get in direct contact with merchants in addition to a '€œseller assistant'€ function providing advice and tips to sellers on running their shops and an in-app payment system.

Lu said that social features like these would enhance people'€™s online shopping experience.

According to a fourth-quarter report from South-East Asia Digital Landscape, Indonesia now has 79 million active social media users, and almost 65 percent of Indonesians purchase goods from social media sites such as Instagram and Twitter.

'€œWe also feel that as long as our services are able to satisfy users within this vast market, profit will come about eventually,'€ Lu said, adding that through this strategy, Shopee would be able to focus on growing its user base.

Recently, Shopee introduced a promo that eliminates shipping costs for all orders across Indonesia thanks to a partnership with logistics firm JNE, resulting in user traffic growth of 200 percent and order growth of 314 percent.

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