Rakuten’s Strategy in Indonesia: In Discounts We Trust

Photo: Salsabeela.com

This article has been updated with a clarification from Rakuten Belanja Online.

E-commerce is poised to grow strongly in Indonesia along side the ever-increasing number of Indonesia’s internet users. Frost & Sullivan research predicts that Indonesian web users will reach 175 million in number by 2016. Online shopping portal, Rakuten Belanja Online (RBO, meaning “Rakuten Online Shop”), the local version of the Japanese giant Rakuten, believes it can grab a bigger slice of the market in the country.

Rakuten’s user-base has grown five-fold recently, and new numbers revealed today show that it has 200,000 registered users and 300 merchants. As a result, the company’s revenue is up eight-fold in the space of one-and-a-half years.

Detik cites partnership development manager of Rakuten Indonesia, Budi Susilo, as saying that Indonesian e-commerce is still considered younger than countries like Thailand, South Korea, and Japan. But with the increasing number of internet users, online business prospects have a bright future. Budi also shared Rakuten’s strategy:

Indonesia is still a consumptive country, not just for gadgets. If there is a discount, everyone would buy. So for us, the discounts strategy is still a mainstay.

Update September 27, 13:54pm: Regarding the quotes above cited from Detik, we received some clarification on this from Rakuten Belanja Online. CEO Rio Inaba explains:

We are very excited by the explosive growth Rakuten Belanja Online has experienced since launching our service in Indonesia in June 2011. Our goal is to take the shopping mall experience online, providing consumers with the same fun and interactive experience they enjoy offline, but with the added convenience and security that online offers. We are not a discount retailer, but one of the great benefits of our model is that pricing tends to be very competitive. (Editor’s note: bold is ours)

[End update]

Today, Rakuten (JSD:4755) opens opportunities for small- and medium-sized enterprises (SMEs) and major brands to sell its products on Rakuten Belanja. It offers various packages and features to attract business owners as merchants. The Japanese company has a points-based feature for its consumers to collect point rewards which can be used to shop. It also offers things like cash on delivery (for those who lack credit cards), free shipping, and pick-up points in selected Alfa Midi supermarkets. Badi stated:

We want to create an online mall, and embrace a number of business owners to sell merchandise on Rakuten.com, thus increasing the variety of goods sold so we can meet the needs of consumers.