Flash Note│ 11 September, 2017

Indonesia Digital Landscape

e-Commerce performance

Tokopedia, OLX, and Lazada are top 3 e-Commerce in Indonesia

In August, Tokopedia remains as the winner in e-Commerce industry based on its
overall performance (see Figure 1) while Lazada, Elevenia, and Mataharimall
performance have dropped since June. People are most engage in OLX (avg. time
on site 9:45 mins with 15.4 pages/visit) because it is mostly consist of big ticket
items so that people do more research before making a purchase. People are also
quite engange with Shopee (avg. time on site 10:50 mins with 12.2 pages/visit)
which is currently undergoing major improvement in number of SKU (unique
products offered) and doing heavy advertising and promotion.

Indonesia online retail market share is growing

Indonesia online retail size was only 1.1% of total retail size in 2016. We expect
this figure to reach 4.1% (USD22bn) by 2020F. Revenue of big fashion retailers
and online fashion retailers will keep increasing in 2017F-2020F, however market
size of online fashion will grow faster (Figure 5.) Big retailers like RALS, MAPI,
and LPPF should focus on optimizing its omni-channel marketing to improve
customers seamless experience as well as marketing spending efficiency so that
they can stay relevant to their target market behavior. Jeffrey Jap
jeffrey@trimegah.com
Indonesia e-Commerce is entering an acceleration growth stage 021 - 2924 9018
It is believed that Indonesia is currently in where China was 5-6 years ago and
India 2-3 years ago. Since then, China and India have experienced an
exponential growth in its e-Commerce industry. Indonesia digital potential is
ready to be unlocked supported by affordable and reliable connectivity (Figure
11-13) which justify why Indonesia people spent time online more than most
countries, both via desktop and mobile.

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Indonesia e-Commerce performance

Figure 1. Indonesia and international e-Commerce performance (August)

Number of
Unique Time on
Total visits visit per Bounce
Global Rank visitors site Pages/visit
(m users) unique rate
(m users) (mins)
visitors (x)
amazon.com 19 2,532.0 514.0 4.9 36.4% 6:20 10.06

ebay.com 38 1,350.0 354.8 3.8 39.1% 6:17 8.98

taobao.com 39 1,558.0 416.4 3.7 37.8% 6:25 6.36

aliexpress.com 55 763.5 245.1 3.1 27.1% 8:36 10.24

tokopedia.com 408 101.8 34.4 3.0 38.2% 6:44 7.64

lazada.co.id 535 96.7 33.2 2.9 47.8% 5:00 4.94

olx.co.id 528 57.1 17.5 3.3 24.5% 9:45 15.35

bukalapak.com 826 60.0 23.5 2.5 37.7% 6:02 5.63

elevenia.co.id 8,959 8.8 5.1 1.7 52.2% 2:57 3.24

blibli.com 1,824 45.3 24.3 1.9 69.7% 1:58 2.32

shopee.co.id 1,990 19.7 7.0 2.8 27.8% 10:50 12.2

mataharimall.com 9,207 6.9 3.1 2.2 46.3% 3:50 5.06

blanja.com 5,718 17.1 7.3 2.4 59.2% 2:09 2.18

jd.id 9,204 7.9 3.7 2.1 42.3% 3:11 3.92

Source:Trimegah Research, Online Ranking Website

Notes:
• Global rank
• Total visits:
• Unique visitors
• Number of visit
per unique visitors
• Bounce rate
• Time on site
• Pages/visit
: based on site performance
: number of mobile and desktop site visit within a month (app excluded)
: number of people that visit mobile and desktop site within a month (app excluded)
: number of times that one people visits a mobile and desktop site within the month (app
excluded)
: percentage of people who only visit 1 page and leave the site immediately
: site visit duration
: number of page that people pass through within one visit.

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Figure 2. Indonesia e-Commerce rank

Rank Jun-17 Jul-17 Aug-17

1 lazada.co.id tokopedia.com tokopedia.com
2 tokopedia.com lazada.co.id olx.co.id
3 olx.co.id olx.co.id lazada.co.id
4 bukalapak.com bukalapak.com bukalapak.com
5 blibli.com blibli.com blibli.com
6 elevenia.co.id shopee.co.id shopee.co.id
7 shopee.co.id elevenia.co.id blanja.com
8 mataharimall.com blanja.com elevenia.co.id
9 blanja.com mataharimall.com jd.id
10 jd.id jd.id mataharimall.com
Source:Trimegah Research, Online Ranking Website

Indonesia fashion retail vs online fashion retail performance

“Retail size continue to grow as well as big retailers revenue like RALS, LPPF, and MAPI. However their
market share are seized by online fashion (see Figure 4 and Figure 5)”

Figure 3. Indonesia retail size, online retail penetration, and online fashion to clothing demand %, 2013-2020F

(USD bn)
600.0 25.0%

536.6
511.0
500.0
486.7 20.0%
463.5
450.0

400.0 376.9 15.0%

335.0 328.3

300.0 10.0%

200.0 4.1% 5.0%

3.3%
2.7%
2.2%
0.8% 0.9% 1.1%
0.5%
2.3% 2.7%
1.9% 1.9%
100.0 1.0% 1.1% 0.0%
0.6% 0.8%

0.0 -5.0%
2013 2014 2015 2016 2017F 2018F 2019F 2020F

Retail Sales Indonesia Online fashion % to clothing demand Online retail contribution %

Source: McKinsey, Kontan, Economist Inteligence Units, Trimegah Research

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Figure 4. Online fashion, RALS, LPPF, and MAPI* revenue, 2013-2020F

*MAPI exclude F&B

Source: Company, Bloomberg, Trimegah Research

Figure 5. Online fashion, RALS, LPPF, and MAPI* contribution to total Indonesia clothes demand, 2013-2020F

*MAPI exclude F&B

Source: Company, Bloomberg, Trimegah Research

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What can big retailers do?

Looking at online fashion potential in following years, we believe that it will be beneficial for big retailers to start focusing on
online to offline (O2O) development and integration by improving its omni-channel retailing experience (online, offline,
desktop, and mobile). Why is that important? Here are some research regarding Indonesia market: 1.) 98% of mobile users
in Indonesia have researched brands and products on their smartphones, 2.) 80% of Indonesians (second-highest in
APAC after Thailand) change their minds along their purchase journeys after consulting their smartphones, 3.)
59% of consumers make online purchases weekly and 39% do so at least monthly, while only 2% say they’ve
never made a purchase online, 4.) 77% of Indonesian smartphone users visited store or related website after
conducting a search on their device, and 5.) 92% of Indonesians say they’re more likely to purchase a product if the
brand message is relevant to them. Various online research also found that Indonesians spent 8h44m online via pc or
tablet and 3h55m via mobile phone. So as the portion of time that people spend online increase, they get more information
online as well. The goal is for both online and offline channels as well as presence to support each other and convert relevant
interest into sales by providing ease of transaction. We see that companies has already tried to get into digital business but
we believe that there still a lot of improvement that can be done.

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Appendix

Indonesia Digital Summary

Figure 6. Indonesia digital summary, 2015-2016

“Indonesia internet penetration

increase from 34% in 2015 to 51% in
2016, higher than global average.”

Source: Various Website, Trimegah Research

Figure 7. Indonesia e-Commerce size – 2013-2020F

“Indonesia online retail

sales growth in 2016
and its potential is
higher than other
countries in regional.”

“We expect online retail

sales will contribute to
4.1% of total retail sales
by 2020F”

Source: McKinsey, Kontan, Economist Inteligence Units, Trimegah Research

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 “Indonesia online retail sales to total retail size and market condition is believed to be similar to
where China was 5-6 years ago and where India was 2-3 years ago. A starting point where online
retail experienced an exponential growth.

Figure 8. Online retail sales to total retail size in various countries, 2008-2018F

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F

China 0.2% 0.3% 1.0% 2.5% 4.3% 6.5% 8.5% 10.2% 11.5% 12.6% 13.4%
India 0.3% 0.4% 0.5% 0.6% 0.7% 0.9% 1.5% 2.0% 2.5% 3.2% 4.0%
Indonesia 0.1% 0.2% 0.3% 0.3% 0.4% 0.5% 0.7% 0.9% 1.1% 2.2% 2.7%
Malaysia 0.4% 0.5% 0.5% 0.6% 0.7% 0.8% 0.9% 1.0% 1.2% 1.4% 1.6%
Philippines 0.3% 0.3% 0.3% 0.3% 0.4% 0.4% 0.5% 0.5% 0.5% 0.5% 0.5%
Singapore 2.8% 2.9% 2.8% 2.8% 2.9% 3.1% 3.4% 3.7% 4.0% 4.3% 4.7%
Thailand 0.6% 0.3% 0.7% 0.8% 0.9% 1.1% 1.2% 1.4% 1.5% 1.7% 1.8%

Source: Trimegah Research, Bhinneka

Figure 9. Active e-Commerce shoppers - % to national population, 2016

“Indonesia experienced
rapid growth in the
number of people who
Source: Various website, Trimegah Research
bought something online
(41%) and via mobile
(33%).”
Figure 10. Active m-Commerce shoppers - % to national population, 2016

Source: Various website, Trimegah Research

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Figure 11. Global average net connection speed – fixed connections (Mbps), 2015-2016

“In 2016, Indonesia internet

connection speed for fixed
connection gets a lot better
than 2015, higher than
global average…”

Source: Various website

Figure 12. Global average net connection speed – mobile, 2016

“…mobile broadband speed

is higher than fixed
connections…”

Source: Various website

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Figure 13. Global mobile broadband pricing, $/500Mb, 2016

“…mobile broadband pricing is

also cheap compared to other
countries…”

Source: McKinsey

Figure 14. Global time spent online (hours), 2016

“… which justify why

Indonesian people
spent time online
more than most
countries...”

Source: Various website

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Figure 15. e-Commerce payment usage in Indonesia, 2017 Figure 16. Indonesia consumer payment methods

100%
90%
“Bank transfer 80%
Other
and cash 70%
Debit card
payments are 60%
still favored 50%
Direct debit

over other Credit transfer

40%
payment Credit card
30%
methods.” Cheque
20%
10% Cash

0%
% of value of consumer
payments

Source: Midtrans Source: Company, Bank Indonesia

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Research Team
Sebastian Tobing, CFA
Gina N Nasution, CSA CTA
Angga Aditya Assaf
Christy Halim
Paula Ruth
Willinoy Sitorus
Wisnu Budhiargo
Yeni Simanjuntak
Rovandi, CTA
Billy Theodorus
Jeffrey
Maria Gabriela Jacoub
Monica Meidiana
Sandro Hanaehan Sirait
Novianty
Della Agatha
Darien Sanusi
Fakhrul Fulvian
Institutional Sales Team
Daniel Dwi Seputro
Dewi Yusnita
Glen Riyanto
Henry Sidarta
Meitawati
Raditya Andyono
Retail Sales Team
Nathanael Benny Prasetyo Head of Retail Equity Sales
Jakarta A rea
Musji Hartanto
Windra Djulnaily
Untung Wijaya
Ignatius Candra Perwira
Sumatera
Juliana Effendy
Tantie Rivi Watie
East Indonesia
Pandu Wibisono
Ivan Jaka Perdana
Carlo Ernest Frits Coutrier
Central Java, A rea
Agus Bambang Suseno
Mariana Kusuma Wati
West Java
Asep Saepudin
Ariffianto
PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com
Head of Research and Institutional Equity sebastian.tobing@trimegah.com +62-21 2924 9105
Head of Technical Research gina.nasution@trimegah.com +62-21 2924 9099
Economist, Head of FIG angga.aditya@trimegah.com +62-21 2924 9103
Head of Consumer Research christy.halim@trimegah.com +62-21 3043 6322
Head of Telecom and Media Research paula@trimegah.com +62-21 2924 9136
Head of Commodities, Auto, and Small Caps
willinoy.sitorus@trimegah.com +62-21 2924 9107
Research
Head of Property and Infrastructure Research wisnu.budhiargo@trimegah.com +62-21 2924 9098
Head of On-The-Ground Research yeni.simanjuntak@trimegah.com +62-21 2924 9104
Associate, Junior Technical Analyst rovandi@trimegah.com +62-21 2924 9096
Research Associate billy.theodorus@trimegah.com +62-21 2924 9106
Research Associate jeffrey@trimegah.com +62-21 2924 9018
Research Associate maria.jacoub@trimegah.com +62-21 2924 9143
Research Associate monica.meidiana@trimegah.com +62-21 2924 9060
Research Associate sandro.sirait@trimegah.com +62-21 2924 6323
Corporate Access novianty@trimegah.com +62-21 2924 9037
Research Associate della.agatha@trimegah.com +62-21 2924 6325
Research Associate darien.sanusi@trimegah.com +62-21 2924 6320
Head of Economics and Fixed Income Re-
Fakhrul.fulvian@trimegah.com +62-21 2924 9097
search
Head of Institutional Equity Sales daniel.dwi@trimegah.com +62-21 2924 9075
Equity Institutional Sales dewi.yusnita@trimegah.com +62-21 2924 9082
Equity Institutional Sales glen.riyanto@trimegah.com +62-21 2924 9076
Equity Institutional Sales henry.sidarta@trimegah.com +62-21 2924 9080
Equity Institutional Sales meitawati.edianingsih@trimegah.com +62-21 2924 9081
Equity Institutional Sales raditya.andyono@trimegah.com +62-21 2924 9146
benny.prasetyo@trimegah.com +62-21 2924 9072
Artha Graha, Jakarta musji.hartanto@trimegah.com +62-21 2924 9021
Pluit, Jakarta windra.djul naily@trimegah.com +62-21 6660 1456
Kelapa Gading, Jakarta untung.wijaya@trimegah.com +62-21 4503 345
BSD, Tangerang ignatius.perwira@trimegah.com +62-21 5386 700
Medan, Sumatera Utara juliana.effendi@trimegah.com +62-61 4520336
Pekanbaru, Riau tantierw@trimegah.com +62-761-859710
Surabaya, Jawa Timur pandu.wibisono@t rimegah.com +62-341-589888
Malang, Jawa Timur ivan.perdana@trimegah.com +62-31-5623720
Makasar, Sulawesi Selatan carlo.coutrier@trimegah.com +62-411-850222
Solo, Jawa Tengah agus.suseno@trimegah.com +62-271-733328
Semarang, Jawa Tengah Mariana.kusuma@trimegah.com +62-24-8452333
Bandung, Jawa Barat asep.saepudin@trimegah.com +62-22-4267929
Cirebon, Jawa Barat ariffianto@trimegah.com +62-231-8291155
11
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