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Jakarta Post

China's Alibaba discusses challenges in penetrating Indonesia

China's Alibaba discusses challenges in penetrating Indonesia Alibaba Group President Michael Evans briefs the media on the sidelines of the 11.11 Alibaba Group Shopping Day Festival, dubbed the world's biggest shopping event, in Shenzhen on Friday. (JP/Esther Samboh/JP/Esther Samboh)
Esther Samboh
Shenzhen, China   ●   Fri, November 11, 2016

Indonesia is a huge market with over 250 million people, but its wide variety of consumer characteristics and its thousands of islands make it "difficult" to operate in, says Chinese e-commerce giant Alibaba Group.

“Think of markets like Indonesia. Difficult, not politically, but difficult because there are 17,000 islands in Indonesia. How do you get to an Indonesian consumer? Most brands understand 250 million people, but how do you actually get to them? Even if you can get to them on the internet through our platform, what does that consumer want?” Alibaba Group president Michael Evans said at a media briefing on the sidelines of the one-day online shopping sale 11.11 Global Shopping Day in Shenzhen, China, on Friday.

Alibaba Group has a presence in Indonesia through Southeast Asia e-commerce giant Lazada, which Alibaba acquired for US$1 billion earlier this year - its biggest overseas deal so far.

Lazada also operates in Singapore, Malaysia, Thailand, the Philippines and Vietnam.

"That is our play to make sure [we understand] Southeast Asian consumers, with a population of 600 million, 300 million of which are emerging into the middle class," Evans said.

Alibaba Group has a global expansion strategy to recruit 2 billion new consumers worldwide, of which 1.5 billion are expected to come from growth markets such as Southeast Asia, India, Russia and Brazil.

"[We want to be] not just the gateway to China, but also the gateway to Southeast Asia and the gateway to India. The gateway to consumer markets around the world, markets that want to buy great branded products, retail products and small business products," Evans said.