Indonesia, as well as the rest of Southeast Asia, remains a hot spot for technology startups and e-commerce. Both local and foreign forces are eager to take a shot at the e-commerce business in a region largely untouched by industry giants such as Amazon.com.
Indonesia has a few e-commerce websites, such as Rakuten, Gmarket, Tokobagus and Blibli. The latest player comes from a German company called Rocket Internet, which recently launched Zalora and Lazada Indonesia. Zalora is a fashion e-commerce site, while Lazada is a general retail site with a focus on electronics and gadgets.
Lazada has also been launched in Malaysia, Vietnam, Thailand and the Philippines, making its focus to the Southeast Asian market obvious. As a promotional strategy, Lazada is offering free delivery to customers’ doors.
Sydney-born Bede Moore is the co-founder and managing director of Lazada Indonesia. Moore was a consultant at the Boston Consulting Group when Rocket Internet made an approach in November last year to start the e-commerce company in Jakarta. Moore, a Harvard graduate with a major in Indonesian history, said he always wanted to work in Indonesia, so he accepted the challenge.
While still at university, Moore shared his room with a rather well-known tech personality: Facebook founder Mark Zuckerberg. At the time, Facebook had not been invented yet, but Moore did get a chance to see how Zuckerberg, a computer science student, built something that people had never seen before.
Having seen how his former roommate changed the way the world communicates was a valuable experience. Moore, however, says in developing Lazada, the challenge really lies in providing acceptable payment methods and accurate logistics, which has become his obsession. The Jakarta Globe spoke to Moore about starting Lazada from scratch, how to handle skeptics and — of course — about his famous former roommate.
The small number of credit card owners would seem a particular challenge to getting an e-commerce business going in Indonesia. What are your strategies?
Yes, we [Lazada] are in five countries and I think I am in the best one. Indonesia is the most interesting market to be operating in. I think probably the Philippines and Indonesia are the most difficult. The difference is the Philippines has a couple of islands whereas Indonesia has more. The part of this business that I run is operation and customer service. These are the most difficult ones in terms of this market because there are a lot of Indonesians who are online and active, but the difficulties is the payment and how you get packages on time.
How do we bring the level of customer service that we believe in. In terms of the time that we have been around, the changes are already seen in the market. We have cash on delivery in 104 cities across the country. That really didn’t exist before as a customer option. We introduced that and it’s really popular with our customers.
Are your products going to be different from those on other e-commerce sites?
The real advantage is the range. We are not just electronics. We have eight different categories ranging from home living to cosmetics. It should be an online single shopping experience. We are making all of these products [available] to people in Indonesia now who have the money but can’t get access to them. We are making that possible.
Orders are delivered by Ningrat and First Logistics. Are these part of your company?
No. They are partners. We are working with these companies to make flawless execution. We are building a new mode of commerce in this country, and if you look at successful commerce across the globe, it has something to do with delivering the goods correctly. JNE has also come aboard to support us. To be honest, most of them are smaller products, getting products to people in Balikpapan, and we are also able to get a treadmill to a man in Papua. The challenge is to make sure that every part of the delivery works flawlessly. And to do that in a country where no one has done it before, obviously you’ll have difficulties.
Seeing that payment methods can be tricky, why did Lazada decide not to use PayPal?
PayPal is nominated in US dollars here, so if I were an Indonesian consumer and saw that my purchase is being converted to US dollars, I might be more unsure about it, right?
How do you handle criticism that Lazada is a copy of Amazon.com?
It’s not something that particularly concerns me. I think what we are trying to do is to be a general retailer online. If being a general retailer [means that] people think we’re Amazon, that’s fine, it’s their interpretation. What I think we are doing is getting hold of a bunch of products and trying to bring those to various people in this country. You can call it Amazon, I think that is retail. We are just doing it online.
Tell us about your former roommate.
It’s a funny story. It’s a good time for our room. There’s Samyr Laine, who is an Olympic triple jumper who is going to compete in the Olympics in a couple of days. It’s unfortunate because I contacted Mark 10 days ago, I wrote to him and said, ‘We have to go to the Olympics and watch Sam jump.’ It was a very interesting experience, I was his roommate in my first year. We were very different. I started at Harvard as a student of general history, and then I moved into colonial history. Obviously Mark was doing computer science, and Sam was doing government.
In freshman year he was working on another big project, Synapse, a music player app that learns about your listening habits. Back in 2002, it was a very interesting thing. He was negotiating with various companies about whether or not he was going to pursue that. In sophomore year, he roomed with Chris Hughes, who is in the film [“The Social Network”] and that was when he came up with Facemash and Facebook.
Did you know that you were going to work at a tech startup?
No. I get it from my writing days in ABC in New York in 2006. I found it fascinating to see with five huge monitors to track Web traffic. Obviously I have known the behind-the-scenes story of Facebook, and I know it’s a business phenomenon. It’s new, compared to palm oil, it’s a new commerce. I thought it’s great because I can be in a country where I want to be, in a new industry with new, young people.