This is MatahariMall’s gameplan to beat Rocket Internet
Lippo Group representative John Riady.
Lippo Group representative John Riady was notably missing from the invite-only
Macquarie Indonesia Telecoms and Ecommerce Conference
in Jakarta yesterday, attended by the who’s who of Indonesia’s tech
players including the nation’s largest telcos and the government’s tech
minister Rudiantara. Riady, who is heading up Indonesia’s latest
ecommerce venture
MatahariMall, would rather focus on getting the online store off the ground.
Last month, Indonesia’s Lippo Group put
US$500 million
into MatahariMall in hopes of building the business-to-consumer site
that would eventually become the “Alibaba of Indonesia” – in the words
of the firm’s public relations.
As the grandson of Lippo Group’s founder Mochtar Riady, John Riady is
a high-profile figure in Indonesia’s business and media scene. He was a
teenager during the fall of Suharto, the former dictator who presided
over three decades of a
corrupt and brutal regime.
With an early interest in politics, Riady attended Georgetown
University in the US, where he studied political philosophy and
economics before returning to Indonesia to build the local English
language media outlets
GlobeAsia magazine and
The Jakarta Globe newspaper. He later purchased
Investor Daily Indonesia.
But according to Riady, there is “no money to be made in media” these
days, which is why he’s now shifting his focus toward ecommerce.
The investment was one of the largest on public record to go into an
Indonesian ecommerce site. However, it’s important to note that
MatahariMall is not really a startup – in the pure sense of the word –
but rather a corporate venture. So it’s not accurate to say that the
investment was the largest for a local tech startup. Homegrown
consumer-to-consumer marketplace
Tokopedia can still claim that title with US$100 million from Sequoia Capital and SoftBank.
Lazada isn’t a pushover
Riady says boldly that his firm is not intimidated by Rocket
Internet, arguably the most aggressive tech startup player in Southeast
Asia.
Rocket Internet’s Lazada Indonesia – which is likely the largest
business-to-consumer ecommerce site serving the archipelago today – will
now have an even larger capacity than ever to rake in the sales. Lazada
Group’s CEO Maximillian Bittner just
announced this week that Lazada would absorb the resources and personnel of Rocket’s consumer-to-consumer site
Lamido. Earlier this week,
we reported
that Lazada Group has received US$686 million in funding, and is
currently valued at US$1.25 billion. But with deep pockets of his own
and hands in many local pies, Riady doesn’t seem to care one way or
another.
“I don’t know what Lazada is doing. That doesn’t drive our strategy,”
says Riady. “We’ve got a larger budget than them and we’ve got a better
team […] They’re focused on nine different countries. We’re focused
only on Indonesia. We’ve been selling to the Indonesian consumer for the
last 40 years. We know exactly what they want, what they’ll buy, and at
what price points.”
Riady claims that even prior to his site going live, which he says
won’t happen until later this month, MatahariMall has been able to
gather more types of items listed for sale (SKUs) than any other
ecommerce company in Indonesia. “On the sourcing side, we’ve been
overwhelmed with the amount of merchants who want to sign up to our
platform,” says Riady. “We signed as many merchants within one week as
it took other players to do in nine to 12 months.”
However, it’s important to note that when speaking about ecommerce,
more than one SKU listing can exist for the same product on a platform
if that product is offered by more than one vendor. For example, if both
Hartono and
another electronics store had iPad Air listings on MatahariMall, then
that could count as two SKUs. Having said that, a high number of SKUs
for a business-to-consumer site prior to launch can help give one an
idea of scale, as well as how many partners Lippo Group really has.
Riady is not bashful to credit this the high number of SKUs to Lippo
Group’s ownership of Matahari department store and Hypermart, as well as
the conglomerate’s long-standing partnerships with other big businesses
in the archipelago.
Riady says he’s not in a position to disclose the lineup of MatahariMall’s team. However, he assures
Tech in Asia that there a number of “superstars,” whose names will be made public soon. We do know that Singapore’s Yiping Goh, CEO of
All Deals Asia, is on the team as a founding member and head of product and technology.
The idea of MatahariMall having an elite, albeit secret team is
compelling for several reasons. The main one is that some sources have
alleged that Lippo recently approached local ecommerce players and
offered to double their salaries if they jump ship and join
MatahariMall. To this, Riady simply shrugs them off as speculation. He
says:
This is a very small world, right. It’s never been about
‘here, let me double your salary, come join us!’ It’s always been about a
vision of truly building the largest Indonesian ecommerce company. […]
Of course all of our employees do well […] but it’s never been about
doubling salaries.
Online-to-offline could be the right alchemy
Perhaps the most compelling argument for why MatahariMall could
potentially take Indonesia by storm over Lazada Indonesia is that it’s
one of the only ecommerce players offering online-to-offline (O2O)
service. Similar to what Walmart did in the US a few years ago,
consumers can buy from MatahariMall’s website, then simply walk into a
Matahari department store and pick up or return their goods.
Riady didn’t mention the other brick-and-mortar stores that will be
accessible via MatahariMall’s O2O feature, but even if the site limits
the service to 138 Matahari department stores and the nation’s Hypermart
locations, the implications would still be significant. According to
him, when the site goes live in a couple weeks, every city in Indonesia
with a population of more than 500,000 – apparently where Matahari
stores are located – will be able to use the O2O feature.
Despite MatahariMall having some of the deepest coffers in Southeast
Asia and the ability to conjure up entire departments at will, last week
Lippo also announced that it had selected
aCommerce
to handle the company’s fulfillment and online marketing, while also
acting as a consultant for the venture’s in-house operations.
Having bypassed the consumer-to-consumer stage that other local players like
Tokopedia and
Bukalapak
still operate in, Riady says the future of MatahariMall will be to open
up business-to-business options, and also get into grocery ecommerce.
For groceries, however, it will also have to compete with sites like
HappyFresh, a grocery delivery startup which employs personal shoppers and
launched earlier this week in both Jakarta and Kuala Lumpur.
However, Riady remains optimistic that he can corner the local online
retail market. “Ecommerce and retail is a very local game,” says Riady.
“If you take a look at every other country, the winner is a local
player. I don’t think there is any other team out there in Indonesia who
can execute a better ecommerce strategy than we can.”
