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Tokopedia Versus Indonesian Retail Giant

After getting used to the application platform for transportation services, food delivery services, and delivery of goods on one Gojek platform, Indonesians are then addicted to the Tokopedia marketplace application. The ease of opening a shop, then selling goods and courier services carried out by third parties has made this platform disrupt the business of the retail giant Matahari model. (see www.matahari.com)


Tokopedia is supported by the OVO digital money service (fintech), making it easy for merchants and buyers to pay for transactions. In addition, all banks in Indonesia are now easily connected to OVO services, which are very easy to produce.

There are currently 10 million merchants on Tokopedia, increasing 2 million new merchants during the pandemic.


PT Pos Indonesia, a state-owned logistics company, does not look at the courier business to support Tokopedia's distribution. However, this was exploited by logistical services that disrupted the incumbent's postal service, PT Pos Indonesia. Tokopedia's logistics and courier services quickly provide tariffs per kilogram of goods, tracking facilities, and goods picked up at home or merchants' physical stores. With the support of dozens of logistics companies, except for PT Pos Indonesia, Tokopedia's delivery service has also served 90% of Indonesia.


With 130 million active Tokopedia users before the pandemic and being disrupted, the Indonesian retail giant's outlets were closed. Debenham has completed all its retail in Indonesia. In addition, retail giant Matahari, which has 147 outlets in Indonesia, has permanently closed its stores. The closure was due, firstly, to digital disruption due to e-commerce platforms, and secondly, to being disrupted by the pandemic. During the first quarter of 2021, Matahari has closed 13 stores in various cities in Indonesia.


Source of picture: freepix


Currently, almost 6 Indonesian retail giants say goodbye to physical sales in Indonesia. They are, Giant, Kinokuniya, Centro, Parkson, Lotus and Debenham. According to the Minister of the Economy, Darmin Nasution, the ease of online shopping or e-commerce platforms is widely used in Indonesia.


To compete with Tokopedia, retail giants are also turning to online shopping. Finally, Uniqlo Indonesia has now closed several of its outlets in Indonesia and switched to e-commerce services.


What has changed from Tokopedia? Tokopedia and the top 10 marketplace companies in Indonesia have changed the e-commerce ecosystem. Currently, digital financial services (fintech), courier and logistics, and 60 million SMEs are connected to e-commerce platforms in Indonesia. As a result, SMEs are not too constrained by opening a business with too many regulations. It is also changing the business model of some large retailers: reducing outlets and shifting product sales to digital services.


In the first quarter of 2021, the value of transactions through all e-commerce platforms in Indonesia reached Rp 266.3 trillion, or around USD 18.3 billion. This figure is up 30 percent from the previous year.


With 130 million active Tokopedia users before the pandemic and being disrupted, the Indonesian retail giant's outlets were closed. Debenham has completed all of its retail in Indonesia. Retail giant Matahari, which has 147 outlets in Indonesia, has permanently closed its stores. The closure was due, firstly, to digital disruption due to e-commerce platforms, and secondly, to disruption by the pandemic. During the first quarter of 2021, Matahari has closed 13 stores in various cities in Indonesia.


Currently, almost 6 Indonesian retail giants say goodbye to physical sales in Indonesia. They are, Giant, Kinokuniya, Centro, Parkson, Lotus and Debenham. According to the Minister of the Economy, Darmin Nasution, the ease of online shopping or e-commerce platforms is widely used in Indonesia.


To compete with Tokopedia, retail giants are also turning to online shopping. Finally, Uniqlo Indonesia has now closed several of its outlets in Indonesia and switched to e-commerce services.


What has changed from Tokopedia? Tokopedia and the top 10 marketplace companies in Indonesia have changed the e-commerce ecosystem. Currently, digital financial services (fintech), courier and logistics, and 60 million SMEs are connected to e-commerce platforms in Indonesia. As a result, SMEs are not too constrained by opening a business with too many regulations. It is also changing the business model of some large retailers: reducing outlets and shifting product sales to digital services.


Data Source: Databox 2020


In the first quarter of 2021, the value of transactions through all e-commerce platforms in Indonesia reached Rp 266.3 trillion, or around USD 18.3 billion. This figure is up 30 percent from the previous year.


The corporate action of Tokopedia and Gojek by conducting a merger made GoTo, the name of the union, provide a valuation of around USD 17.5 billion and made GoTo the number one giant (decacorn) in Indonesia today.


Tokopedia, which was started in 2009 by William Tanuwijaya, was laughed at. William just thought, in simple terms, how Indonesians in these 17,000 islands are connected in one platform to buy and sell, making it easier for them to transact and make deliveries that are not complicated. Twelve years later, the start-up has become a giant with syndicates of funders from Alibaba and Softbank and other leading investors.


What lessons can we get from Tokopedia? The first is Tokopedia's future vision of the importance of an e-commerce platform that is easily accessible to the Indonesian people. Second, Tokopedia has made the ecosystem in the chain of shipping goods previously suspended and is now excited again. Third, Tokopedia has changed government regulations to make opening new businesses easier and less bureaucratic. Anyone who has interests can open a shop and sell them.


Who loses in this case? Many Indonesian retail companies have closed their stores and shifted their sales to hybrid methods, physical outlets, and online sales at the same time.


Source and References:


1. https://databoks.katadata.co.id/datapublish/2021/06/11/jumlah-pengunjung-tokopedia-kalahkan-shopee-pada-kuartal-i-2021#

2. https://www.cnbcindonesia.com/market/20210425095540-17-240623/ritel-berdarah-darah-matahari-rugi-tutup-13-gerai-di-q1

3. https://www.liputan6.com/bisnis/read/3873968/banyak-ritel-bangkrut-menko-darmin-sebut-pola-belanja-masyarakat-sudah-berubah

4. https://www.tokopedia.com/about/our-story/




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