Tuesday, May 31, 2011

DS Research
DS Research is a research company based in Jakarta, Indonesia. We do research on technology industry where we have strong connection to the industry’s most influential people and companies. Our research-based consulting model is designed to quickly deliver actionoriented recommendations by leveraging our existing research. Our analyst consultants enter into projects with a deep, immediate understanding of your business environment and challenges — which means faster, more cost-efficient results for you. We bring together research insights, benchmarking data, problem-solving methodologies and hands on experience to improve the return on your IT investment.

•Our core competencies: •Internet technology web-based products •Mobile technology •Technology investments in Indonesia •Gaming, social network, e-commerce, etc

Contact our representative Rahmat Harlyadie +62 857 1532 6032 rahmat@dailysocial.net http://dsresearch.net/contact/

Tuesday, May 31, 2011

Disclaimer
The opinions, advice, products and services offered herein are the sole responsibilityof the contributors. Whilst all reasonable care has been taken to ensure the accuracy ofthe publication, the publishers cannot accept responsibility for any errors or omissions. This publication MAY be copied and/or distributed without the prior written agreement of the publishers but without any alteration in any kind including the credits & copyright section. Product names used in this report are for identification purposes only, and may be trademarks of their respective owners. DS Research disclaims any and allrights in those marks. All Rights Reserved. 2011.

Tuesday, May 31, 2011

Research

How Indonesia’s Youngsters Use E-Commerce


DSResearch.net

Tuesday, May 31, 2011

BACKGROUND
• • • • • •

The growth of e-commerce in Indonesia. The growth of service providers for e-commerce in Indonesia. The improvement of the online infrastructure in Indonesia. The rapid growth of e-commerce website in Indonesia. Indonesia counts for a very big market for e-commerce. Young people as influential trend-setter in e-commerce.

Tuesday, May 31, 2011

Research Objectives
• To discover the landscape of e-commerce in Indonesia. • To identify behaviour of the young people when using e-commerce services. • To analyze which e-commerce websites are visited frequently. • To identify which products that young people buy online. • To describe the proportion and frequency of Internet and Mobile use. • To identify the reason why young people don’t use e-commerce.

Tuesday, May 31, 2011

Research subject
n = 500
• Male and Female. • Proportion of Female Respondents reach 70%. • Married and Single. • Between 20 - 30 year-old. • From middle to upper class who owns high-end/smartphone. • High Internet Literacy (all respondents have smartphone, are able to identify online activities, and are capable of utilising a variety of functionalities that can be achieved using mobile devices and internet tehnology).

Tuesday, May 31, 2011

Duration & Place for Survey
Duration: 30 days (1 month) Place: Jakarta and the surroundings area, specifically in Jakarta Business Districts and in University areas.

Tuesday, May 31, 2011

Despite of the high growth of the Internet, in terms of infrastructure and penetration, people’s level of knowledge about Internet itself is still developing. There still seems to be a wrong assumption in regards to what ecommerce really is, in comparison to the respondents’ behaviour when shopping online. Respondents still don’t fully understand the real meaning of ecommerce, i.e. a fully integrated payment system maximised by use of Internet network. They still assume that a bank transfer ‘is’ the ecommerce payment system.

Tuesday, May 31, 2011

On the other hand, online stores or e-commerce service providers still haven’t maximised the payment system that they are offering. The fact that most online stores or ecommerce providers use bank transfer method for their transaction shows that really they are still using the semionline method. More education on this issues are clearly still needed for all parties. Meanwhile, the rapid growth of shopping online will still give a great prospect for e-commerce in Indonesia.

Tuesday, May 31, 2011

Research Locations Proportion (Where do they live?)
10%
• • • • •

Jakarta: 72% Bogor: 0,4% Tangerang & Banten: 14% Depok: 4,2 % Bekasi: 10%
4% 14%

0%

72%

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The reason why Jakarta counts for a bigger proportion
Jakarta has a better Internet Infrastructure (compare to other places), and the consumer in Jakarta has already known about e-commerce sites and the process of buying goods online.

Tuesday, May 31, 2011

Occupation Proportion (What do they do?)
16% 3% 3% 1%

78%

77,6% Student 16% Private staff 3% Entrepreneur 2,8% Government staff

Tuesday, May 31, 2011

The Reason why Respondents are centered on students
Students are the widest market, not only in number but also the fact that they are more Internet literate than other demography. Students are one of the most frequent user of the Internet, don’t mind to try new product (including Internet Services) and has a big and growing buying power.

Tuesday, May 31, 2011

93%
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used Blackberry as their main smartphone

Subject’s Online Behavior

8% 19%

Measured by International standard of Internet literacy Most of respondents (74%) doing online activities less than 50 hours per week, for 50-100 hrs are 19%, respondents online all the time are 8% The data shows that average Internet literacy of youngster are still considered low to moderate level

74%

Tuesday, May 31, 2011

Some of the questions asked in this research reflect the economic status of the respondents which consist of SES A and B.

Tuesday, May 31, 2011

Most Visited Websites

1. Facebook 2. Twitter 3. Kaskus 4. Google 5. Yahoo

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Sites they visited
• • • • • • •

Facebook: 32% Kaskus: 14% Twitter: 20% Yahoo & products: 9% YouTube: 4% detik: 8% Google & products: 13%

9% 8% 14%

13% 4% 20%

32%

Tuesday, May 31, 2011

The two most visited websites, according to this research, are Facebook (32%) and Twitter (20%). Hot on their heals come Kaskus, a local site that has the biggest community in Indonesia, with 14%. Then come Google (13%), which includes Google Search, GMail, Google Translate, and other Google services. Three other websites, following the above big 4, are Yahoo! services (9%), Detik - a local online portal services (8%) and Youtube bringing out the rear with 4%. Again, just like Google, we include all services provided by Yahoo! and Detik into one umbrella, whilst for Youtube, even though it’s par t of Google, respondents recognise it as a product of its own with a high social aspect.

Tuesday, May 31, 2011

HOW THEY USE ECOMMERCE SITES
1% 10% 26%

38%
26% respondent just surfing for products, while 25% of respondent refer r ing for pr ice before offline buying, 38% surfing for products and purchase it online .
Tuesday, May 31, 2011

25%

Window shopping can be described as a process where respondents visit a wide variety of websites before they decide to buy a specific product, online or offline. In a way, they are just using the websites as reference to browse products before they decide for a particular one. Compare Prices constitutes the behaviour where respondents analyse product prices from different e-commerce websites and compare them with the those prices offline. This behaviour shows that respondents recognise the existence of e-commerce websites but still cannot leave their offline shopping pattern. As much as 26% of respondents only compare prices online without actually buy anything, whereas 25% of them use e-commerce website as reference to compare prices before they buy offline.

Tuesday, May 31, 2011

38%
Respondents compare prices AND buy online
Tuesday, May 31, 2011

The number of Respondents who use e-Commerce
224 Respondents 175 Females 49 Males

Tuesday, May 31, 2011

Based on the background explained previously, in relation to the respondent’s age, their activities and and tendencies they showed in answering the questions, at the end this research is focusing more on seeing how young people in big cities using ecommerce. Apart from focusing on young respondents, this research is also divided into two topics regarding consumer behaviour related to services. The first topic will see in details consumer’s view about e-commerce, what attracts them to it, where they find information about e-commerce websites and behaviour patterns related to buying process of products via e-commerce service. The second topic will dig deeper on the behaviour patterns of consumers who don’t buy from e-commerce websites, what their reasons are and what type of information that is needed by e-commerce sites to increase their service to attract consumers. This survey also found that 224 respondents have used e-commerce services, while the other 276 have never used any.

Tuesday, May 31, 2011

150

Good e-commerce

112.5

75

37.5

0

e re ble uct ites dat od edu aila ns o pr w av roc pt no m on su ep ore ll k st om cy te pl si e ec we en sim fflin le r par o p ns tra peo ion dat en

n = 224 respondents

Tuesday, May 31, 2011

From this research, it’s been found that respondents still hesitate in using e-commerce services, but are getting more confident with the help of their friend’s recommendations or other user’s positive comments. On the topic of experience in using e-commerce services, respondents want easier online buying process and nicer look and feel. They also say that a user-friendly sites are one of the important factors. Another thing that respondents wants from e-commerce sites are a security guarantee, they need e-commerce services that are trustworthy and easy to be accessed.

Tuesday, May 31, 2011

E-commerce sources of information
150

112.5

75

37.5

0

friends & relative search engine

kaskus

offline magazine

facebook

n = 224 respondents
Tuesday, May 31, 2011

Most respondents are getting their information about e-commerce from their friends and relatives (60%). This shows that recommendation is an important factor in the online buying process. The second biggest source in getting information about e-commerce is by using the Search Engines (325 respondents). Search Engine is a dominant reference as the source of information for to-be buyer. Kaskus, as Indonesian biggest community site, also give quiet an influence in making decision on choosing e-commerce services (9 respondents). Moreover, online stores owner often post in Kaskus informing products and services that they provide. These posts normally include links that send readers or to-be buyers to their sites. Other sources that are used by respondents to get information about ecommerce are Print Media and Facebook.

Tuesday, May 31, 2011

1. Kaskus 2. Tokobagus 3. Facebook 4. eBay 5. Amazon

MOST VISITED E-COMMERCE SITES
Tuesday, May 31, 2011

Kaskus, an online forum with the biggest member in Indonesia has facility for its members to buy goods online, they also provide service for sellers to sell their merchandises. This integration makes consumers who are looking for a a product they want more easily. Kaskus members are very loyal to the forum, they would happily tells their friends and family, or other medium about Kaskus and get them to search and buy goods as product.

Tuesday, May 31, 2011

Kaskus has more or less 2.4 million users and most of them frequent Forum Jual Beli (FJB) - Forum of Buying and Selling, which is one of the most popular market in Indonesia. In one hand, this makes users easily find their product, and on the other hand it is profitable for the sellers. Even if a user is not registered to Kaskus, he/she can easily visit the FJB, to look for and compare prices. This means that the barrier of entry to find information for a particular product is . But because Kaskus is just a Forum, things related to security is still get highlighted. Although Kaskus always improves their service by providing their own payment method and some additional service.

Tuesday, May 31, 2011

TokoBagus is another Online Store picked by respondents. Not so long ago TokoBagus aired its TVC ads which gave them expose to customers who want to buy online. Facebook is also picked as alternative to conduct transaction online using social media. The rapid growth of Facebook users, accompanied by a growing number of sellers, give a boost to users to buy and sell online in Facebook. Facebook has also a user-friendly interface, attractive layout and promotion based on relationship graph and networks. All of these help Facebook as a good alternative for people to buy goods online.

Tuesday, May 31, 2011

Favourite websites to buy goods online
80 60 40 20 0
us ask k n do s y ber book agu eba em e ob em fac tok r 8 m m et es se rfu e sit lanja8 ou velv gra pa r lin eh lsa be ud i pu ah a et um

't

r

n = 224 respondents
Tuesday, May 31, 2011

Search Engine still holds an important role for respondents to find Online Store. Often respondents don’t remember in which online store they did their last transaction because they had found the store through the search engine. The most preferred site for e-commerce is Kaskus. One of the deciding factor for respondents to choose a particular ecommerce service is recommendation they’ve got from friends and families. Viral Promotion from users also helps to promote Kaskus to be the most populur e-commerce service provider. On the third place for the favourite site to buy goods online is Facebook. Although selling product in Facebook is against their TOC; a big number of users, ease of use and the effectiveness of the platform are making Facebook as an alternative place for respondents to shop online.

Tuesday, May 31, 2011

92%
Tuesday, May 31, 2011

customers that they are

satisfied
with online shopping

Respondents say that they are satisfied with their online shopping experience. Respondents are also actively tell their experience in buying goods online with their friends and families. The loyal users of Kaskus and Facebook are also actively share their experience, especially which online store they like the most.

n = 224 respondents
Tuesday, May 31, 2011

Types of products bought online
150 112.5 75 37.5 0

s the clo

s oe sh

ac

rie sso ce

s o er s p n

re l ca a

s bag

l s rie video nima so a , ces s, cd c a ok nd a bo t dge ga n = 224 respondents

Tuesday, May 31, 2011

The number of respondents on this research is dominated by female respondents, they do shopping online compare to their male counterpart. The types of product that are often bought by the female respondents are clothes, shoes and make-ups; whereas the male respondents tend to buy shoes, gadgets and gadget accessorises.

Tuesday, May 31, 2011

The amount of transaction
150 112.5 75 37.5 0
1 ,0 00 0 5 00 0 0,0

0 r han t ,0 p5

0 0,0 0

0 1 han t

0

0 0,0

0

rp

s les

s les

ou am any

nt les s r han t p

0 0,0 0 1,0

0

n = 224 respondents

Tuesday, May 31, 2011

The amount that respondents spend for each transaction is less than Rp. 500,000. The reason of this rather small amount of transaction is because the products that they usually buy, e.g. shoes, clothes and accessories, tend to cost around Rp. 500,000. Respondents also choose to buy goods that cost more than Rp. 500,000 offline so that they can try it themselves directly. Respondents also prefer to get the more expensive goods offline so that they can haggle for them, as well as check the items physically. Respondents still don’t feel safe to spend more money than Rp. 500,000 because of credibility issue.

Tuesday, May 31, 2011

Payment Method
200 150 100 50 0

bank transfer cash

credit card paypal
n = 224 respondents

Tuesday, May 31, 2011

Payment method is one of the deciding factors of ecommerce services. On this issue, respondents choose to mix payment methods, e.g. ATM Transfer and also to maximise the use of Internet and Mobile Banking. As many as 36 respondents choose to pay cash when shopping online, whereas only 8 respondents would use Credit Card, and as few as 2 people use Paypal.

Tuesday, May 31, 2011

The Ideal Payment Method
200 150 100 50 0

bank transfer cash

credit card paypal
n = 224 respondents

Tuesday, May 31, 2011

One thing that we found from this research was the fact that a big number of respondents have this view that the only solution to do online transaction is via the bank transfer. This payment method via bank transfer is also the most popular because its processing speed, easily found and trust in term of security as well as the bank wide coverage. This lack of knowledge on respondents in regards to online payment method could be seen as an opportunity by itself. Respondents need to be educated and given more information on already existing payment methods they could use, and of course the challenge is to provide payment platform that suit consumers need.

Tuesday, May 31, 2011

276 respondents

RESPONDENTS NOT USING E-COMMERCE
Tuesday, May 31, 2011

Reasons why don’t buy online
120 90 60 30 0
i tr ust ss n eu es o co rce mme

sites

es st issu tr u

cts produ on

of thing uy r to b prefe

fline

n = 276 respondents
Tuesday, May 31, 2011

The reason why respondents don’t buy online is mainly about trust, either with the e-commerce sites themselves or the goods sold. There is also the reason that they prefer to buy goods offline. This trust issue is the main reason why respondents have no confidence to buy products online. Respondents say that the problem has to do with past experience or assumption that the goods they buy and pay for will not be sent by the seller. They also say that they worry that the goods they buy and receive is not what the site was originally offered. Respondents choose to browse the products online where they can physically touch and see the details of the product before they choose to buy it. The ability to haggle to find the ideal price after checking the product offline is also one feature that online shopping experience still cannot match, hence become one of the reason why respondents don’t go shopping online.

Tuesday, May 31, 2011

150 112.5 75 37.5 0

What can be improved from e-commerce services?

t tr us e pric

titive mpe co

ue uniq

ded tion bility men puta vaila a m re uct ller reco d se prod goo

n = 276 respondents
Tuesday, May 31, 2011

Looking at the fact that many respondents don’t conduct their shopping online, there are a few things that can be improved from e-commerce services to make it more attractive to more consumers. The trust factor has been highlighted quite heavily by the respondents. This issue has the biggest proportion, leaving the biggest gap compare to the other reasons why respondents don’t do their shopping online such as price, unique product, recommendation and stock availability. Respondents need to be reassured that e-commerce is safe. Respondents need to know if a site is registered and has license (to trade). E-commerce sites must be able to convince consumers that their service is safe and trustworthy. Moreover, a unique product and price offers can be a value-added proposition by e-commerce.

Tuesday, May 31, 2011

Conclusions
Respondents who use e-commerce sites

The growth and development of Internet in Indonesia has pushed businesses in the tech industries to create e-commerce based services. Indonesia with its massive number of population and still relatively low growth (unsaturated) of Internet penetration has a big potential in term of business opportunities for e-commerce. The behaviour of Indonesian young people also indicates they have potential as consumers of e-commerce service. The young people is the drive behind e-commerce because they the ones who are technology literate and an active user of the internet.

Tuesday, May 31, 2011

Conclusions
From 500 respondents from this survey, 224 respondents (45%) have used e-commerce services, whilst 276 of them (55%) haven’t not done any online transaction from e-commerce services. From the gender point of view, the proportion of females are 80% of the whole respondents. They seem to be the ones that are more familiar with the internet world and shop online more often compare to their male counterpart.

Tuesday, May 31, 2011

Conclusions
From age point of view, most respondents are around 20-25 years old and are studying in universities. The age of respondents show that this time we focused on university students and early job seekers as the subject of this research. More than 94% of respondents have Blackberry as their main mobile phone. This explains about their social-economic status which is at level A & B. How respondents use e-commerce for is evidently differently from one person to the other. These usage-patterns can be divided as follows: Window-Shopping. Here respondents only browse for products and compare prices but there is still no intention to buy yet.
Tuesday, May 31, 2011

Conclusions
Compare prices for several products from several online stores. Compare prices before deciding to buy product ‘offline’, not online. Window-shopping means that respondents visit online sites before they decide to buy the product either online or offline. An e-commerce site can be used like a catalog to browse products and prices. In term of price comparison, respondents analyze prices from products sold in e-commerce sites and compare them with ones offline.

Tuesday, May 31, 2011

Conclusions
Respondents who doesn’t use e-commerce sites

Respondents still hesitates to use e-commerce sites. Recommendations and positive comments from other users lend a big hand in buying decision. Respondents want nice look and feel and userfriendly site. Respondents want trustworthy and easy to find site.

Tuesday, May 31, 2011

Conclusions
Most respondents tend to buy based on advice from their friends or families, about 60% of respondents do their online shopping using this behaviour pattern. Respondents usually search online stores via the search engines and 9 respondents found them via Kaskus. Kaskus is also functioned to promote services for online store owner by putting links into the forum which sends visitor to their sites.

Tuesday, May 31, 2011

Conclusions
Customer satisfaction plays an important part in buying decision, loyal users who satisfied in a buying process from Kaskus will virally share their experience to their friends and families, and would influence them to use Kaskus as a place to do their online shopping. With more than 2.4 million users, mostly using FJB (Buy-Sell Forum) service, Kaskus has provided a tool for online store so that users can easily search a particular product, or the latest prices for products, not only for registered users but also for non-members. Facebook strength is on its attractive look and feel and ease of use. This has made Facebook as one of alternatives to buy goods online. TokoBagus as one of e-commerce service provided received some expose when their ads was aired at several national tv channels.

Tuesday, May 31, 2011

Conclusions
From the point of view of types of product bought online, women would by clothes, accessories and beauty cares, whereas men would by shoes and gadgets. The price of products bought online is around Rp. 100,000 - Rp. 500,000. Payment method type chosen by most respondents is bank transfer. Respondents also think that bank transfer is the only type of payment method available for e-commerce. Knowledge about other alternative ways of payment is still low. Bank is also regarded as the main choice for payment due to the fact that it’s easy to reach, quick and has wide reach. Respondents need to be more educated on the subject of better and simpler payment methods. The main challenge is to provide payment method that suits what consumers need.
Tuesday, May 31, 2011

Conclusions

Trust issue, from product point of view or from the ecommerce site itself. Respondent prefer offline transaction because: they can haggle, they can see, touch, feel and try the product physically.

Tuesday, May 31, 2011

Conclusions
What can be improved by e-commerce service provider to persuade to-be customer or ones who don’t use e-commerce: - Be trustworthy - Competitive price - Unique product - Legally trading

Tuesday, May 31, 2011

DS Research
DS Research is a research company based in Jakarta, Indonesia. We do research on technology industry where we have strong connection to the industry’s most influential people and companies. Our research-based consulting model is designed to quickly deliver actionoriented recommendations by leveraging our existing research. Our analyst consultants enter into projects with a deep, immediate understanding of your business environment and challenges — which means faster, more cost-efficient results for you. We bring together research insights, benchmarking data, problem-solving methodologies and hands on experience to improve the return on your IT investment.

•Our core competencies: •Internet technology web-based products •Mobile technology •Technology investments in Indonesia •Gaming, social network, e-commerce, etc

Contact our representative Rahmat Harlyadie +62 857 1532 6032 rahmat@dailysocial.net http://dsresearch.net/contact/

Tuesday, May 31, 2011

Tuesday, May 31, 2011