MNC Shop CEO says he’ll stick with TV shopping, despite Indonesia’s ecommerce boom

Reino Barack, CEO of MNC Shop

Nine out of 10 people in Southeast Asia still watch free-to-air TV, despite a boom in web usage and online video consumption, according to a recent Nielsen study.

People who follow ecommerce in Indonesia are sometimes surprised to learn that MNC Group, one of Indonesia’s biggest media conglomerates, also has a site called MNC Shop. At first glance, techies may think that MNC is gearing up to go head-to-head with Lazada or the upcoming MatahariMall in the archipelago’s online retail battle. But those people would be wrong. MNC Shop CEO Reino Barack says that those who are most familiar with the brand are not tech junkies; rather, they’re wives and mothers who leave the TV on as they do chores.

MNC Shop is one of Indonesia’s largest 24-hour television home shopping networks. Viewers can see products featured on the channel, then phone in to speak with a representative about those items. They can also visit the site to buy stuff online. MNC Shop does its own logistics and deliveries with help from third-party companies. It also has a seven-day guarantee that lets users exchange goods should they be unsatisfied.

“Most of our products are female driven,” explains Barack, who is also the former CMO of Rakuten Belanja Online, the now defunct joint venture between MNC and Japanese ecommerce giant Rakuten. “We are in the top five most watched channels on Indovision. […] We’re different from the other ecommerce guys because we have a strong push strategy, whereas they have a pull strategy.”

TV lets you preach more

What Barack means when he says “push strategy” is that MNC Shop does more of the hard sell. It uses television to put detailed product information right inside consumers’ homes. Most often, viewers are not actively looking for the products before they see them on TV. Today, this is considered to be a very traditional approach – perhaps even old school. According to Barack, the other ecommerce players like Tokopedia or Lazada Indonesia must spend heavily on SEO and SEM to pull in an online audience that’s already looking for stuff they offer.

“We have a much more traditional and proven approach,” says Barack. “I think the main value of TV is that we can uniquely elaborate on the value of each unique product. We can show why it’s worth buying. We’ve also done live public demos of the products before, which has worked out okay I guess. But we actually really need people to understand what we’re selling for it to be most effective. TV is really the best way to do it. […] Why would you only want to target 200 people when you can reach millions?”

According to Barack, items must be very unique with an attractive price tag for vendors to get products featured on MNC Shop. Currently, MNC Shop’s ecommerce site has little more than 10,000 unique product listings (SKUs), which Barack admits really isn’t much. For SKUs on MNC Shops television presence, Barack says there are three to four hundred that are replaced each week with new ones. Hence, in a given year, MNC Shop’s TV presence cycles through 15,600 to 20,800 SKUs in a continuous flow. Barack says that MNC Shop is getting about 10,000 monthly active users, defined as people who make at least one purchase. The average transaction amount via MNC Shop is around Rp 1 million (US$76).

See: How Indonesia’s Tokopedia can learn from Alibaba