JAKARTA, Indonesia, April 24, 2018 /CNW/ -- The online retail market—Business to Consumer (B2C)—of the country registered 25% growth in the fourth quarter (ending December) of 2017 and surpassed US $2.2 billion Gross Merchandising Value (GMV), according to recent report released under Frost and Sullivan's e-Commerce market program.
"Supported by stronger engagement on the mobile devices, the increase in the number of new and repeated online shoppers is driving the market of e-Commerce in the country," said Naveen Mishra, Program Director, Frost & Sullivan.
Led by three key market players—Shopee, Tokopedia and Lazada—their aggressive online and offline marketing strategy and promotional campaigns boosted the sales significantly. During the quarter, over 2/3rd of the market was driven by top 5 market players.
According to Mr. Avinash Sachdeva, Principal Analyst, ICT Research at Frost & Sullivan Asia-Pacific, "The aggressive marketing approach adopted by established market participants has intensified the competition in the market and as a result several weak players are expected to exit the market because they might lose investors' confidence."
In order to sustain in a highly competitive market, companies are quickly adopting new business strategies. For instance, Alfamart changed to first party from marketplace strategy, Blanja leveraged T-sel mobile subscribers for customer acquisition and Mataharimall uniquely positioned to offer O2O services.
In the context of this research Frost & Sullivan defines "E-Commerce" as the sale of goods via an online medium which have been traditionally purchased via physical retail medium. The research excludes electronic sales of:
- Travel and holiday packages
- Tickets sale related to travel (air, rail and road) and events (sports, music concerts, etc.)
- Revenue generated by online gambling sites
- App store purchases, online gaming services and in-app purchases on such platforms
- Ride hailing services and delivery of foods, magazines, household goods, and DVD rentals
The research study primarily focuses on Business to Consumer (B2C) market however the coverage includes individual sellers transacting on the e-commerce marketplaces such as Shopee, Lazada, Bukalapak and others. It excludes Person to Person (P2P) platforms (Mudah, OLX etc.) which primarily lists products and where the transaction does not conclude on the platform. Any revenue reported outside of the definition mentioned here is not part of the Frost & Sullivan's numbers reported here.
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SOURCE Frost & Sullivan