The Lippo power
Yiping explains that MatahariMall is mostly a marketplace, meaning external retailers use the site’s tools to sell, while MatahariMall does not own or store inventory.
That is consistent with the sector’s trend in Asia at large.
About 90 percent of the company’s business comes from the marketplace, according to Yiping. Most marketplace sellers ship products themselves, though MatahariMall offers support to sellers who want extra help in warehousing and fulfilment, like Amazon does in some Asian markets.
MatahariMall also operates its own warehouse on the fringe of Jakarta, where the 10 percent of retail goods it owns are stored and distributed.
The managed marketplace approach means MatahariMall is similar to its closest competitor, Lazada Indonesia. And also to Alibaba’s Taobao and Tmall marketplaces in China. MatahariMall’s strength, Yiping believes, sits in an extensive online-to-offline (O2O) strategy.
First off, MatahariMall benefits from the physical presences of its Lippo Group sister, the popular Matahari department store chain. These can be found in major cities across the archipelago, and MatahariMall partners with them for customers to pick up or return goods purchased online.
MatahariMall is also exploring e-lockers as customer pick-up points. It says it has installed e-lockers in 40 locations such as train stations, malls, and universities, and claims hundreds of orders pass through these e-lockers on a daily basis. It has also struck up a collaboration with Pos Indonesia, the national postal service, and will use its offices as customer pick up points.
The Lippo Group also owns Hypermart, a supermarket chain similar to Carrefour. MatahariMall already offers an assortment of packaged groceries on its website. It’s entirely possible the firm will explore fresh grocery delivery in the future, though Yiping said she couldn’t confirm this.
MatahariMall believes its existing distribution network and physical locations, in addition to those of its partners, are key asset that will lead to fast growth and give it an edge over competitors.
A strong online-to-online approach could prove to be particularly relevant in Indonesia. Customers here are still getting used to the concept of online shopping. Transacting with the online world via trusted partners could be an easy way to get started. There’s also a risk attached to having goods delivered directly to your home because street addresses in the vast archipelago can be unclear.