Online shopping in Indonesia is booming. Are you ready to take advantage?

Online shopping in Indonesia is booming. Are you ready to take advantage?

$3.5 billion: the amount in sales e­commerce sites in Indonesia are set to generate this year. A princely sum, and one that is expected to grow further. 16% of Indonesia’s population purchased something off the Internet via a PC, and 9% did so over their phones, in just December 2014 alone (We Are Social). These numbers are only going to go up as Indonesians become more Internet savvy.

This boom in online shopping heralds an exciting time, but how then, to keep the good times going? The marketplace is teeming with businesses being labelled ‘the next big thing’ like Jualo, Fabelio and HappyFresh (Tech in Asia). To stay ahead of the competitive curve, you need to understand your customers’ needs and desires, and data analytics is an invaluable tool to help you do this.

The world of data can appear overwhelming, but with the right kind of help, you too can boost your business intelligence. And it’s not always about huge changes. As a first step, here are the top four areas you should start measuring to ensure you stay one step ahead, by giving customers what they want, when they want it.

CUSTOMER ACQUISITION COSTS

Indonesia had 83 million internet users in 2014, and SingPost eCommerce predicts that number to swell to almost 103 million by 2016. Just 4.6 million Indonesians made a purchase online in 2013, but twice as many will be shoppers in the online marketplace by 2016. Huge potential for attracting new customers. But could you be spending your marketing budget more wisely?

Data analysis can help you pinpoint audience segments more likely to convert into loyal paying customers, and the platforms where you can reach them. Undertaking an analysis of the characteristics of this customer pool and playing to this can also help your business stand out. Your data might show you that a customer has been looking for a particular product, so you can personalise advertising and site content that pushes this, or similar products they might be interested in.

Similarly, more Indonesians are taking their shopping online while stuck in traffic jams to save time, spending on average two and a half hours on mobile internet per day, so are you targeting these people the right way? Rather than wasting your money on people who aren’t interested, getting to understand where your most valuable potential customers are spending their time and how best to reach them there will help your marketing budget work harder for you.

CHURN

So now you’ve got your audience, how do you convert them to paying customers and retain them? Churn, or your customer attrition rate, is the percentage of visitors who never return to your site. Data analysis can pinpoint what makes people leave, providing the insights you need to address specific concerns. It could be something as simple as a button in the wrong place that is turning your customers off. It could also mean you need to put more effort into re­targeting your audience.

Pitching them again can also make them aware of current and future products you have available, and drive demand. A ‘test and iterate’ approach using data analysis is crucial here ­ baby steps! ­ to identify what’s going wrong, and where. Making targeted improvements can help keep customer satisfaction high across the board, so you retain more customers, and, crucially, keep them coming back for more.

PURCHASE FUNNEL/SHOPPING CART ABANDONMENT

Placing an item in the shopping cart signals an intent to buy, so it can be frustrating when customers don’t take that final step to make an actual purchase. Where are people dropping off in the sales process and why? People give up their decision to purchase for all kinds of reasons, like when confronted with complex payment processes or unexpected shipping fees.

Data analysis can help you find out exactly where and why customers abandon ship, so you can fix these issues and provide adequate support that will drive more purchases. By making the purchasing experience a smooth and user­ friendly one, you’ll be able to convert more people into paying customers, and entice them to stay rather than go elsewhere.

AVERAGE ORDER VALUE

As a retailer, your Average Order Value (AOV) is an absolutely key metric you need to measure. Paying attention to how much each customer spends on average will give you a good idea of how much revenue you can generate. The higher this number is, the better. Watch your AOV closely, and diagnose any changes you see. It might have to do with your checkout process, the items you’re selling or the marketing acquisition process.

One simple trick can also make this measurement work even harder for you, and help you identify where your best customers are coming from. Segment your visitors and marketing campaigns in your AOV measurements, and compare that to a baseline AOV from your current volume of traffic. That way, you can see where your marketing money is best spent, and focus your future attention on campaigns that will help you capture more big spenders.


It’s clear that there’s a world of opportunity out there for ecommerce businesses. But if you don’t make the change to a data­ driven strategy, you won’t see the best results. In a mobile driven market, brands can become more accessible by investing in digital ­ will you join the ranks of the top Indonesian brands who have already done so? You don’t need to feel left behind. By adopting the tactics outlined above you can gain a competitive advantage.

You don’t have to go it alone. There are experts out there who can help you navigate and understand your data, by helping you to pick out the best in breed solutions and technologies that best fit your particular business. Then you too can be part of the ecommerce boom.


Vinoaj Vijeyakumaar

Managing Partner & Co-Founder

Sparkline

Vinoaj Vijeyakumaar is Managing Partner and Co‐Founder of Sparkline, one of Asia’s fastest growing integrated data analysis consultancies, working with some of the world’s biggest brands to help them effectively manage, and interpret their customer data, enabling them to better understand, engage and communicate with their customers. Clients include e‐commerce success story Luxola, dtac, Bangkok Airways, IKEA and Fairmont Hotels & Resorts.