Hundreds of e-commerce platforms are participating in the seventh annual National Online Shopping Day, better known as Harbolnas, on Tuesday and Wednesday this week by offering numerous discounts to increase brand awareness among customers. (JG Screenshot)

National Online Shopping Day Targets Rp 7t in Transactions

BY :SARAH YUNIARNI

DECEMBER 12, 2018

Jakarta. Hundreds of e-commerce platforms are participating in the seventh annual National Online Shopping Day, better known as Harbolnas, on Tuesday and Wednesday this week by offering numerous discounts to increase brand awareness among customers.

About 300 online stores are participating in the event, offering a wide range of products, including electronics, fashion and beauty, food and beverages, groceries, travel packages, furniture, services and baby products.

Only six e-commerce platforms – Lazada, Zalora, Blanja, PinkEmma, Berrybenka and Bukalapak – participated in the inaugural event in 2012, but this increased to 254 last year.

"As the largest online shopping festival in Indonesia, Harbolnas is committed this year to promoting local products and encouraging more small and medium enterprises to join in and enjoy the benefits of digital commerce," said Harbolnas organizer Indra Yonathan, who is also the country head and co-founder of ShopBack Indonesia, the local unit of the Singapore-based coupon company.

Indonesia's rapidly growing internet economy is expected to be worth about $27 billion this year and projected to grow to $100 billion by 2025, Indra said, citing a recent joint study by technology giant Google and Singapore's wealth fund, Temasek.

Meanwhile, online sales of physical goods in Indonesia may surge more than eightfold to $65 billion annually by 2020, according to a separate study by global business consultancy McKinsey & Company.

To drive sales of local products, Harbolnas is also supported by the Indonesian e-Commerce Association (IDEA) and the ministries of trade, industry, and communication and information technology.

Indra said online stores are expected to conduct five times more transactions than usual during this year's event, while the total transaction value may amount to about Rp 7 trillion ($479 million), with total sales of locally made products expected to amount to about Rp 1 trillion.

Last year's event, which took place over three days, generated about Rp 4.7 trillion in sales, which was a 42 percent year-on-year increase from 2016.

The organizers hope to attract at least a million first-time buyers during this year's event, which was preceded by a series of roadshows for small and medium businesses in seven cities across the archipelago on Nov. 1-30.

The organizers provided small businesses with training in digital marketing to enable them to participate more effectively in year's event.

Indonesian e-commerce platform Bukalapak has partnered with actress Dian Sastrowardoyo and film director Timo Tjahjanto to produce the short film, "After 11" to promote Harbolnas and attract more customers.

Bayu Syerli, vice president for marketing at Bukalapak, said the company supports community empowerment, such as training, to encourage its more than 4 million sellers and 400,000 stalls or partners to adopt digital technology.

This year's Harbolnas is also supported by several banks, including state-controlled lender Bank Mandiri, which provides a non-cash payment option for customer transactions during the two-day event.

The lender further offers interest-free installments, cash-back promotions and discounts of up to 95 percent to holders of Mandiri debit and credit cards.

Haris Budiman, vice president of credit cards at Bank Mandiri, said the promotional program is a form of appreciation by the lender of its 19 million customers.

"Shopping on e-commerce platforms has become a trend among Bank Mandiri's customers. Our data shows that transaction frequency on debit and credit cards has increased 60 percent this year compared with last year," Haris said.

E-commerce encourages financial inclusion, as it has already indirectly provided about 300,000 micro-business owners with access to financial services through online payment systems, McKinsey noted.

Go Local

Industry Minister Airlangga Hartarto said his ministry supports this year's event as it is in line with the government's mission to encourage local businesses to sell their products online.

"Encouraging SMEs to use digital channels is one of the government's priority programs, as it is stipulated in the Industry 4.0 roadmap. There are 3,000 SMEs participating in the government's UKM E-Smart program and the number is still growing," he said.

The minister said Indonesia has tremendous potential to maximize its digital industry as the archipelago has a vast number of internet users and one of the fastest growing economies in the region.

According to the Indonesian Internet Service Providers Association (APJII), the country had about 143 million internet users last year, 44 percent of whom used mobile devices to go online.

"Through Harbolnas, local businesses can better understand the advantage of selling their products through online platforms," Shopback's Indra said.

Philia Wibowo, a partner at McKinsey, said global consumers are interested in Indonesian-made products, which is reflected in the growing demand for such goods overseas.

"More industries must follow the jewelry sector's example, because overall Indonesian exports through online sales remain low, with many local merchants yet to tap international markets," Philia said.

McKinsey estimates that e-commerce may facilitate exports of more than $26 billion, or the equivalent of 40 percent of current manufacturing exports.

To realize this potential, Indonesia must encourage mid-sized and large businesses to boost their e-commerce sales.

This could add $150 billion to Indonesia's gross domestic product per year, or an average of 1.2 percentage points of additional annual growth over the next seven years.

It would contribute almost 60 percent of the boost needed to ensure 7 percent annual GDP growth by 2025.

"To encourage the growth of mid-sized companies, the public and private sectors must collaborate to create accelerator programs aimed at boosting their competitiveness," Philia said.

"Through these programs, midsized companies can access mentorships, information on accessing new markets, obtain financial support, receive supporting infrastructure, such as warehouses, and manage their businesses well by utilizing digital tools," she added.

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