Indonesia is one of those countries whose people adapt very quickly to new technology, especially the internet. I still remember that before 2010, many people were already used to hunting for new or second-hand goods on forums like Kaskus. But shopping was not very safe back then.
Because fraud was common, people tried to deal with sellers who lived within reach, so they could do COD (cash on delivery). I did a few COD deals myself, both as a buyer and as a seller. For a long time, too, many people tried to build their own independent online store websites. As someone in the website industry, I have had several projects building online stores. Lately, though, shopping online has become an everyday activity for city dwellers, thanks to the convenience offered by the many marketplaces.
As someone in the industry, I wanted to research it first-hand: what it is like, and how selling through your own online store, or ecommerce, differs from using one of the many marketplaces around today. So for the past year I have been buying and selling products online, both on marketplaces and through ecommerce. What is the difference?
eCommerce
I know the term eCommerce means any buying and selling done online. But in this article, let's take eCommerce to mean specifically those who use an online store website built for selling products. I have to admit that, in reality, selling products through your own eCommerce website is far harder than selling through an existing marketplace. The advantage, of course, is that your own eCommerce website brings its own prestige. You can also run whatever promotions you choose. But managing and growing your own ecommerce website is very hard, especially if you don't already have a market. And calculating shipping costs in Indonesia is far harder than in most other countries, mainly because Indonesia is an archipelago, so shipping costs vary a lot with distance. Although the many courier options such as TIKI and JNE help a great deal, they don't openly share their shipping rate databases. So to solve the shipping formula, you either have to ask the courier directly or use an API sold by a third party. Payments are just as much of a hassle. Usually you can use manual bank transfer with a payment confirmation form, but of course you want something fully automatic. There are local payment gateways you can use, such as Doku or Midtrans, but their fees vary with the payment type: debit, credit card or over-the-counter at places like supermarkets. These transaction fees are another drawback of an eCommerce website.
Marketplace
Now let's talk about marketplaces. In Indonesia over the past few years, all kinds of marketplaces have sprung up. The popular ones include Tokopedia, Bukalapak, Shopee, Lazada, Elevenia, Zalora and others. They are called marketplaces because the website brings together many different sellers. You can open your own shop and use the features the marketplace has already built, such as payment systems integrated with many banks and payment methods, and, remarkably, with no commission at all. Most also already offer interest-free monthly instalments. As for shipping, they usually have special arrangements with many couriers, so there are plenty of options. They often subsidise free or discounted shipping, and those promotions cost the seller nothing. To use all these benefits, the seller doesn't have to pay a single rupiah. How is that possible? Because they make money another way, not through sales commission: they sell ad spots so your product can appear prominently in search, along with various other services.
My conclusion is that it makes less and less sense for eCommerce to compete with marketplaces. If you have a product, there's nothing wrong with having your own website to introduce it. But if you want to make it easy for people to shop online and buy your product, putting it on a popular Indonesian marketplace is not a bad idea at all. These marketplaces have built so many systems that make transactions easy and safe for both sellers and buyers. You have to move with the times, and today the Indonesian market is getting used to shopping online through the convenience marketplaces offer.
User Behaviour
Let's talk about user habits. Things are different now from the days before marketplaces were popular. Back then, when people needed a product, they might search for it on a search engine like Google, typing in the product name. A whole range of websites would appear, and it was still a hassle for users to filter the information and work out which website was best to buy from. User behaviour has changed. When users look for a product now, they no longer open a search engine. They go straight to a marketplace they know well, or open its app on their smartphone, and search there. That reduces the chance of users finding your ecommerce website. So selling products on your own ecommerce website, especially retail products, is no longer as relevant.
The Website Is Not Dead
Even though eCommerce loses so badly to marketplaces, does that make having a website a bad idea? Not at all. If you have a product, you are free to present it and give full information about it in a far more interactive way than you can on a marketplace. And although retail products are now much better suited to marketplaces than to websites, service businesses are still not found on marketplaces. Marketplaces also still suit products that don't need much consultation, the fast-moving products such as clothing and electronics. But there are products such as industrial machines, factory spare parts and other items that are usually not cheap and need careful consultation before purchase. For these, having your own website is still relevant, not just a marketplace. You can still consider a marketplace as a tool to make transactions between buyer and seller easier.
What do you think? Do eCommerce sites or websites still have other advantages that marketplaces don't?
