Subir Lohani is the current CEO of Carmudi Indonesia, the leading vehicle marketplace in Indonesia. Previously he was Managing Director of Carmudi Philippines, before that, an investment banker working out of Singapore in the capital markets space, with a specialty of covering corporate and sovereign clients in South and South East Asia. On a recent trip to Jakarta, we sat down with him to for a quick interview on his insights around Indonesian e-commerce.
What is your opinion on the E-Commerce industry in Industry and where can it go further?
Data from Asosiasi Penyelenggara Jasa Internet Indonesia (APJII) show that until January 2016, Internet users in Indonesia will reach 88,1 million user (48% are daily internet users). There is still significant potential to grow just via the growth the user base. However, I think we will see more localised business models that are targeted to Indonesia being developed rather than adjusted models from more developed markets.
Is logistics a problem in Indonesia? And what are the best ways to fulfil orders?
Yes. Logistics is the main problems in being able to scale due to fulfilment times and costs. However, in 3rd tier cities and remote areas where availability of products may not exist (however where e-commerce is perhaps the most valuable) maybe the logistics companies need to do something counterintuitive and deliver slower but cheaper and reliable quality. If a person in a remote area does not have access to the product anyway then do they really need the product to be delivered in 48 hours? Probably not
How will the predicted surge in direct foreign investment affect the Indonesian e-commerce scene?
Its a chicken and egg problem. More capital flowing in is of course a good thing for the e-commerce scene but it may also significantly drive up valuations as more money is chasing after the same number of deals. Rather we have to see where the funding gap in the market currently is i.e. Series A, Series B and provide the liquidity into this underserved market to create a balanced approach.
Can the government provide more laws that will accommodate rapid business growth?
The government has been relatively active and has identified 3 main problems in the Indonesian E-Commerce industry which are payment, delivery, and internet access while the Ministry of Communications and Information (Kemenkominfo) still on process to arrange “Roadmap and Ministerial Regulation about E-Commerce. In E-Commerce roadmap that prepared by government, there are 7 issues: logistics, funding, customer protection, infrastructure, tax, education, human resources, and cyber security. However there are more basic issues that need to solved such as company incorporation processes whether it be a local entity or a foreign owned entity (PT PMA). Further foreign controlled entities are required to commit minimum capital requirements which may not be feasible for an early stage startup. Certain tax incentives or adjustment to regulations about carrying forward losses could also help the scene.
What actions can entrepreneurs take given the mobile and app trends we see in Indonesia?
While mobile is the large majority of how users access the site there are still a lot of cross screen interaction (i.e. mobile, tablet, desktop) before the final purchase which entrepreneurs should also consider (as an example you may acquire the user on mobile but order gets completed on desktop). Therefore more time should be spent on UX in the beginning and also regarding choice of responsive vs adaptive designs. Further while a lot of people focus on developing app based strategies, if its not a daily use product it maybe better for focus on mobile design
Catch Subir in action at the SEAMLESS where he will offering his insights on on the future of classified ads amidst the greater disruption of things. Find out more about how you can join him and other e-commerce CXOs at this exclusive 2 day event from the 19th to 20th April 2017 by clicking HERE