E-commerce in Emerging Markets

E-commerceinEmergingMarkets

ThecaseofZaloraIndonesia

MasterthesisCand.Merc.EBA.InternationalBusiness(IBS)CopenhagenBusinessSchool,2016Handindate:17.05.2016Supervisor:TroelsJakobsenAuthor:AnnikenDøvleNumberofpages:77Averagenumberofcharactersperpage:2009

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ExecutivesummaryE-commerceisaboomingbusiness,andnotonlyindevelopednations.Manyemerging

economiesareexperiencingshiftsinconsumerpurchasingpatternsfromtraditionalshoppingto

onlineshopping.TheevolvingconsumeralsousestheInternettostayconnectedandaccess

information,increasingtheneedforcompaniestocommunicatewiththeircustomersonline.

ThisalsoappliesfortheleadingonlinefashionretailerinIndonesia,Zalora.

Thepurposeofthisthesisistoproposeane-marketingplanforZaloraIndonesia,whichcan

helpthemfurthertheirgrowthinthemarket.Thee-marketingplanfollowstheSOSTAC

structure,entailingagenerationofasituationanalysis,objectives,strategies,tacticsandcontrol,

excludingactionsbasedontheoutsiderperspectiveonthecompany.Thise-marketingplanwill

attempttofigureoutwhatfactorsstimulateorconstrainthegrowthofZaloraIndonesia,and

whate-marketingmeasurescanbecarriedouttoachievegrowthintheIndonesianonline

fashionretailindustry.

TheanalysisshowedthattheIndonesiane-commercemarketisstillatarelativelynascentstage,

whereonlineretailonlyaccountsfor0.6percentoftotalretail.Thee-commerceforecastsare,

however,verypromising,withanexpectedgrowthinonlineretailsalesofaround60percent.

WithZalorabeingthelargestonlinefashionretailerinIndonesia,theirprospectsarehighly

positive,aslongastheyoptimizetheire-marketingstrategies.

Thefindingsfromthesituationanalysisshowedaneedforincreasedsales,animprovedbounce

rate,increasedcredibility,andincreasedvisibility.ThestrategyandtacticsdevelopedforZalora

Indonesiathussupporttheseneedsthroughsuggestingimprovementswithine-marketingfields

thatZaloraIndonesiahavehadinsufficientfocuson.Thesuggestedmarketingtacticsmainly

concentrateonengagingandinteractingwithcustomers,astoincreasetheamountofvisitsthat

endinpurchaseandtheacquisitionofnewcustomers.Ifthise-marketingplanisadopted,itis

assumedtocontributetothefurthergrowthofZaloraintheIndonesianonlinefashionretail

market.

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TableofContents

EXECUTIVESUMMARY..................................................................................................................................1

1.INTRODUCTION..........................................................................................................................................41.1PROBLEMFORMULATIONANDRESEARCHQUESTION.................................................................................61.2DEMARCATION.............................................................................................................................................71.3STRUCTURE...................................................................................................................................................7

2.LITERATUREREVIEW..............................................................................................................................82.1DEFININGE-COMMERCE...............................................................................................................................92.2DEFININGEMERGINGMARKETS.................................................................................................................102.2.1CRITERIAOFANEMERGINGMARKET.....................................................................................................................102.2.2.DEFINITIONSOFANEMERGINGMARKET..............................................................................................................112.2.3.COUNTRYCLASSIFICATION......................................................................................................................................132.2.4.SUMMARYOFDEFINITIONSOFEMERGINGMARKETS.........................................................................................15

3.RESEARCHDESIGNANDMETHODOLOGY.......................................................................................153.1RESEARCHPHILOSOPHY.............................................................................................................................153.2RESEARCHAPPROACH................................................................................................................................163.3RESEARCHDESIGN......................................................................................................................................163.3.1RESEARCHSTRATEGY................................................................................................................................................163.3.2DATACOLLECTIONANDANALYSIS..........................................................................................................................173.3.3RESEARCHQUALITY................................................................................................................................18

4.CASESTUDY:ZALORAINDONESIA.....................................................................................................204.1COMPANYPROFILE.....................................................................................................................................204.2HISTORY.....................................................................................................................................................214.3BUSINESSPERFORMANCE...........................................................................................................................22

5.E-MARKETINGPLAN...............................................................................................................................245.1SITUATIONANALYSIS.................................................................................................................................245.1.1EXTERNALANALYSIS.................................................................................................................................................245.1.1.1PESTLE...................................................................................................................................................................255.1.1.2Porter’sfiveforces............................................................................................................................................335.1.2INTERNALANALYSIS..................................................................................................................................................445.1.2.1OLIanalysis..........................................................................................................................................................445.1.2.2VRIOanalysis......................................................................................................................................................485.1.3SUBCONCLUSION-SWOT.......................................................................................................................................535.2OBJECTIVES.................................................................................................................................................555.3STRATEGY...................................................................................................................................................575.3.1SEGMENTSANDTARGETMARKET...........................................................................................................................585.3.2OBJECTIVES.................................................................................................................................................................585.3.3POSITIONING...............................................................................................................................................................585.3.4TOWSMATRIX...........................................................................................................................................................595.3.5SEQUENCE...................................................................................................................................................................645.3.6ACQUISITIONORRETENTION...................................................................................................................................655.3.7TACTICALTOOLS........................................................................................................................................................665.3.8INTEGRATION..............................................................................................................................................................66

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5.3.9SOCIALMEDIA.............................................................................................................................................................665.3.10SUMMARYOFSTRATEGY........................................................................................................................................675.4TACTICS......................................................................................................................................................675.4.1INCREASEBASKETSIZEPERCUSTOMER.................................................................................................................675.4.2INCREASENUMBEROFPRODUCTSANDBRANDSOFFERED.................................................................................685.4.3PROMOTECUSTOMERS’INCENTIVETOSHOPATZALORAINDONESIAANDONLINESHOPPINGANDDELIVERYREPUTATIONMANAGEMENT............................................................................................................................695.4.4IMPROVEWEBSITEATTRACTIVENESS....................................................................................................................705.4.5INCREASEFEEDBACKFROMCUSTOMERS...............................................................................................................705.4.6INCREASEFOCUSONCONTENTMARKETING.........................................................................................................715.4.7DIFFERENTIATEPROMOTION..................................................................................................................................715.4.8SUMMARYOFTACTICS...............................................................................................................................................72

5.CONCLUSION.............................................................................................................................................736.1CONTROL....................................................................................................................................................756.2LIMITATIONS..............................................................................................................................................77

REFERENCES..................................................................................................................................................78

APPENDIX1...................................................................................................................................................87

APPENDIX2................................................................................................................................................104

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1.Introduction

Electroniccommerce,ore-commerce,haschangedthewaybusinessisconductedina

massiveway.TheInternetuserbaseisincreasingduetoadvancesintechnology,which

alsocausesagrowthine-commerce.Thisrevolutionis,however,notlimitedto

developedcountriesbutisalsospreadingtoemergingeconomies,suchasIndonesia

(AgarwalandWu,2015),whichisthefocusofthispaper.ThenumberofInternetusers

inIndonesiahasgrownatacompoundannualgrowthrate(CAGR)of20,8%inthe

periodbetween2009and2014(Linkedin,2015a).ThishasledtoanInternet

penetrationrateof37percentin2015,withthehighestnumberofInternetusersinall

ofSoutheastAsia.TheforecastsalsoshowthattheInternetpenetrationratemayreach

50percentby2019(MacquarieResearch,2016).Fore-commercecompanies,thisis

greatnews,asthescopeofInternetusersiswhatinitiallylaysthebasisfore-commerce

inacountry.

Thee-commerceindustryhasgainedmoreattentionfromtheIndonesianpopulationin

thelatestyears,whichsignifiesthatpeopleanticipatetoshoponlinemoreoften.The

demandintheonlineretailmarketinIndonesiaislargelyconfinedtoappareland

footwear,asthereisahigherpresenceofvariousproductvariantsatlowerprices

comparedtophysicalstores,coupledwithanincreasedexposureofIndonesian

consumerstowardsinternationalfashionbrands(Linkedin,2015a).Accordingto

MacquarieResearch,thecurrentonlineretailsalesasapercentageoftotalretailarestill

verylow,at0.6percentin2015.Theforecast,however,showsasteepincreaseinthe

nextcoupleofyears,expectedtoreach7.8percentin2020(MacquarieResearch,2016).

TheIndonesiane-commercemarketsurelyhasalotofpotential,buttherearestillsome

obstaclestoovercome.

EventhoughweseeagrowthinthepercentageofInternetusers,thetotalnumbersare

stillquitelow,withmostusersconcentratedinJakarta,Indonesia’scapital(Statista,

2016).Indonesianconsumersareneitherveryaccustomedtoonlineshopping,mainly

basedonconcernsregardingproductqualityandpaymentsecurity(Macquarie

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Research,2016).Theseareconcernsthate-commercecompaniesmusttackletosucceed

intheIndonesianmarket.

Emergingmarketsissaidtobethefutureofe-commerce,intermsofcontributingtothe

largestgrowth.Manycompaniesarealreadyestablishedanddoingwell.Zaloraisoneof

them.ZaloraisanonlinefashionretailerthatoperatesineightcountriesinAsia,

AustraliaandNewZealand(RocketInternet,2014).ZaloraIndonesiaischosenasthe

casecompanyforthispaperasIndonesiaisZalora’sbiggestmarketinAsiaandthe

marketleaderforfashione-commerceinthecountry(DealStreetAsia,2015).The

choiceisalsobasedontheopportunityofdirectcontactwiththeNorwegianMarketing

DirectorofZaloraIndonesia,JoBjordal.

ZaloraIndonesiaisbackedbyitsGermanparentcompany,RocketInternet(Rocket

Internet,2014).RocketInternetisnotcurrentlyasinvolvedinZalora’sbusinessasthey

werebefore,buttheystillsharebestpracticesandbenchmarks(Bjordal,Interview,

Appendix1).ZaloraisalsoapartoftheGlobalFashionGroupthatconsistofsix

platformsin27countries(Globalfashiongroup,2015a).Theleadshareholdersinthe

GlobalFashionGroupareKinnevikandRocketInternet,owning25.1and23.5percent

respectively.TheothershareholdersareAccessIndustries(7.4percent)(Kinnevik,

2014),SummitPartners(shareunknown),OntarioTeachers(shareunknown),

Tengelmannventures(shareunknown),andVerlinvest(shareunknown)(Global

fashiongroup,2015b).

Figure1:GlobalFashionGroupshareholders,owncreation

Kinnevik,25.1%

RocketInternet,23.5%

AccessIndustries,7.4%

Summitpartners,?

OntarioTeachers,?

Tengelmann,?

Verlinvest,?

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1.1Problemformulationandresearchquestion

Thetopicofe-commerceingeneralisstillrelativelynewandahottopicforresearchers.

Whatisevenmoreinnovative,however,isthestudyofe-commerceinemerging

markets.Asconductinge-commerceindevelopedcountriesandemergingeconomies

differsquitealot,e-commercecompaniesinemergingmarketshaveveryfewguidelines

tofollow.ThebiggestconcernisacquiringcustomersincountrieswithlowInternet

penetrationwhereconsumersarestillveryattachedtothetraditionalphysicalretail

scene.Thepurposeofthispaperisthustoresearchhowane-commercecompanyinan

emergingmarketcanmarketthemselvestoattractcustomersonlineandtakeadvantage

ofthecountry’spotential.ZaloraIndonesiaisusedasacaseforthispurpose,analyzing

theIndonesianonlinefashionretailindustryanddevelopingane-marketingplanforthe

company.

AsZaloraisalreadydoingquitewellinIndonesia,itisinterestingtoresearchwhatthey

candotoimprovetheire-marketingefforts.ThispaperwillseektoidentifyZalora’s

growthpotentialinIndonesia,andfindingwaystoexploitthispotential.Theresearch

questionisthusasfollows:

HowcanZalorafurtheritsgrowthintheonlinefashionretailindustryinIndonesia?

Growthwillheremainlybedefinedasincreasingprofitsandacquiringnewcustomers.

Toanswertheresearchquestion,ananalysisofZalora’ssituationintheIndonesian

onlinefashionretailindustryisessentialtoidentifywhatZaloracanimproveandtake

advantageof.Whenthecountry’spotentialisanalyzed,itisnecessarytousethis

informationindeterminingZaloraIndonesia’sobjectives,followedbystrategiesand

tacticstoreachtheseobjectives.Therefore,twosub-questionsaredeveloped:

! InwhatwayscanZalora’ssituationinIndonesianfosterorhinderitsgrowthinthe

onlinefashionretailindustry?

! Whate-marketingmeasurescanbemadetoachievegrowthintheIndonesian

market?

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1.2Demarcation

Becauseofdelimitationstothescopeofthepaper,somedemarcationsareset.The

researchquestionalreadylimitsthepaper’sfocustothequitenarrowfieldthatisthe

onlinefashionretailindustryinIndonesia.Thus,thispaperwillnotdealwithothere-

commerceindustriesthanthefashionindustry.Inthecasestudy,thefocusison

businesstoconsumer(B2C)retail,andnotothercontextsasbusinesstobusiness(B2B),

consumertoconsumer(C2C),orconsumertobusiness(C2B),asitisnotwithinthe

scopeoftheproblemstatement.Therefore,eventhoughZaloraIndonesiaoffersa

marketplacewhereconsumersselltootherconsumers,thiswillnotbeconsideredinthe

paper.ThethesiswillalsoonlyincludeIndonesiancustomers,orcustomerslivingin

Indonesia,assumingthatZaloraIndonesia’scustomersallresideinIndonesia.

Whenitcomestomarketingstrategiesandtactics,suggestionswillbemadeforZalora

Indonesiaonthebasisthatnobudgetorprofitnumbersareprovidedbythecompany.

Thee-marketingplancanthusnottakeresourcelimitsintoconsideration,andwill

thereforeonlybeasdetailedasallowedwithoutthisinformation.Otherlimitationscan

alsobeexpectedonthegroundsthatfewnumbersaboutthee-commerceindustryin

Indonesia,oraboutZaloraIndonesiaspecificallyarepublic.Smallerlimitationsand

demarcationswillalsobepresentedifneededthroughoutthepaper.

1.3Structure

Thispaperwillconsistoffivechapters.Followingtheintroductionpart,theliterature

reviewwillguidethereaderthroughliteratureconcerningdefinitionsofe-commerce

andemergingmarkets.Reasoningforthechoiceofliteraturewillalsobemade.In

chapterthree,theresearchdesignandmethodologyusedtoanswertheresearch

questionwillbepresented.Inthefourthchapter,thecaseofZaloraIndonesiawillbe

presented.Here,thereaderwillobtainmoreknowledgeaboutZaloraIndonesia’s

history,profileandbusinessperformance.

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Thee-marketingplanfollowstheSOSTACstructurefore-marketingplanninginchapter

five.SOSTACstandsforsituationanalysis,objectives,strategy,tactics,actionsand

control(Chaffey,2013).Thesituationanalysiswillincludeexternalandinternalmarket

analyses,concludedbyaSWOTanalysis.Theobjectiveswillincludeadeterminationof

goalstostrengthengrowth,whilestrategiesaresettoachievetheseobjectives.The

tacticspartwillincludeamoreexactanddetailedplanonhowZaloracanreachtheir

objectives.Actionsareexcluded,asthispartisintendedforplanningwhodoeswhatand

when,whichisbeyondthescopeandpurposeofthispaper.ThelastpartoftheSOSTAC

structure,control,isincludedaftertheconclusionasdirectionsforfurther

implementation,asaguidelinewithcontrollingmethodsformaintenanceofthee-

marketingplandeveloped.Atlast,limitationstothethesiswillbepresented.

2.Literaturereview

Thischaptercontainsacriticaloverviewoftheliteraturethatsetsthebasisforthe

thesis.Theobjectiveistopresentthechosenliteraturewithine-commerceand

emergingmarkets,criticallyevaluateit,andpresentanexplanationasofwhythese

theoriesareexplicitlyusedoverothers.Asthispaperisacasestudyofaspecific

companythatresultsinthedevelopmentofane-marketingplan,literatureislimitedto

defininge-commerceandemergingmarkets.Shortexplanationsofthetheoriesusedfor

analysiswillbeintroducedbeforeitsrespectivepartsinthesituationanalysis

Introduction Literaturereview

Researchdesignandmethodology

Casestudy:Zalora

IndonesiaE-marketing

plan

Situationanalysis

Objectives

Strategy

Tactics

Conclusion

Control

Figure2:Structure

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2.1Defininge-commerce

E-commerceisprimarilyaboutonlinesalesandtransactions.Itdoesnot,initself,

includethemarketingorthebackofficeadministrationprocessesinabusiness.E-

businessisanothertermthatisoftenusedparalleltoe-commerce.However,ithasa

somewhatbroaderdefinitioninvolvingautomationoftheentirevaluechain,from

procurementofrawmaterialstosalesandinvoicing.Unlikee-commerce,e-marketingis

attheheartofe-business(Chaffey,2013).Eventhoughthispaperwillseektodevelop

ane-marketingplan,itsobjectivesareconcernedwithe-commerceandnotthebroader

picturethatise-business.Thedefinitionspresentedwillthusconcerne-commerce

exclusively.

Arangeofnewterminologyhasevolvedinlightoftherapidadvancementoftechnology

inbusinesses.Chaffey(2007)isoftheopinionthatdefinitionsandlabelsarenotofgreat

importance,butthattheymaybeconvenientindefiningthescopeofthechangesa

companywantstomakebyusingelectroniccommunications.E-commercecanbeeither

buy-sideorsell-side.Buy-sidee-commercereferstotransactionstoacquireresources

byanorganizationfromitssuppliers,fromthebuyingorganization’sperspective.Sell-

sidee-commercereferstotransactionsassociatedwithsellingproductstoan

organization’scustomers,fromthesellingorganization’sperspective.Thereare

differenttypesofsell-sidee-commerce.Sell-sidee-commercedoesnotonlyinvolve

onlinesales,butalsousingtechnologytomarketservices.Notallkindsofproductsare

suitableforonlinesale,sothewayawebsitechoosetomarketdifferentproductswill

vary(Chaffey,2007).

Forsell-sidee-commercetherearefourmaintypesofonlinepresence,withvarying

objectivesandrelevancefordifferentmarkets.Companiesmaycombinethedifferent

types.Thefirsttypeisthetransactionale-commercesite,whichenablespurchaseof

productsonline.Theyalsosupportthebusinessbygivinginformationtocustomers

aboutofflinepurchase.Theseincluderetailsites,travelsitesandonlinebanking

services.Service-orientedrelationship-buildingwebsitesarethesecondtypeofsell-side

e-commercepresence.Thistypeprovidesinformationtostimulatepurchaseandbuild

relationships.Productsarenottypicallyavailableforpurchaseonline.Informationis

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providedthroughthewebsiteande-newsletterstoinformpurchasedecisions.The

mainbusinesscontributionisthroughencouragingofflinesalesandgenerating

enquiriesorleadsfrompotentialcustomers.Suchsitesalsoaddvaluetoexisting

customersbyprovidingthemwithdetailedinformationtohelpsupportthemintheir

livesatworkorathome(Chaffey,2007).

Thethirdtypeisbrand-buildingsites,whichprovideanexperiencetosupportthe

brand.Productsarenottypicallyavailableforonlinepurchase.Theirmainfocusisto

supportthebrandbydevelopinganonlineexperienceofthebrand.Theyaretypicalfor

low-value,high-volume,fast-movingconsumergoods.Thefourthandlasttypeisthe

portalormediasite.Theyprovideinformationornewsaboutarangeoftopics.Portal

referstoagatewayofinformation.Thisisinformationbothonthesiteandthroughlinks

toothersites.Portalshavediversityofoptionsforgeneratingrevenue,including

advertising,commission-basedsale,saleofcustomerdata(Chaffey2007).

Othertheorist’sdefinitionsofe-commercearequitesimilartotheonespresented.E-

commerceisnotaverycomplextermandthedefinitionspresentedabovebyChaffey

(2007and2013)arethereforesufficientforthepurposeofthispaper.Asthetwo

definitionsareofthesametheorist,theywillbothbeusedasthebasisforthispaper

combined.

2.2Definingemergingmarkets

Theconceptofemergingmarketsisnotnecessarilyeasilydefined.Thereisnotone

officiallyknowndefinition,andIhavethereforechosenasetofliteraturethatexplains

thetermsuitablyforthispaper.

2.2.1Criteriaofanemergingmarket

BigstenandDanielsson’s(1999)report,whichtriestodetermineifacountryisan

emergingeconomyornotsetsfivemaincriteriaofanemergingmarket.Theseare

macroeconomic,microeconomic,humanresourceandinfrastructure,governanceand

politics,andself-reliance.Themacroeconomiccriteriaentailmacroeconomicstability,

wheresoundfiscalandmonetarypoliciesareessentialforasuccessfuldevelopment,as

wellasinternationalcompetitivenessinareasoutsidetraditionalcommodityexports.

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Themicroeconomiccriteriaarecompetitive,liberalized,domesticmarketsandastable,

diversified,andtransparentfinancialsystem.Humanresourceandinfrastructureisalso

adeterminantwhendefininganemergingeconomy.Here,humancapitalforcompetitive

productionisimportant,thuseducationisafactor,aswellasaneffectivephysical

infrastructure,suchastransportationnetworksamongstothers.Thecriteriaof

governanceandpoliticsentailsunbiasedinstitutions,goodgovernance,political

maturity,andabroad-baseddevelopmentpattern,whichmeansthatawidespectrumof

thepopulationsharethegrowth,andthatpovertynumbersarereduced.Thelast

criterionofself-relianceentailsfactorssuchaslimitedaiddependence,controlledlevel

offoreigndebt,anddomesticsavingasthemajorsourceofinvestmentfinance(Bigsten

andDanielsson,1999).

Thissetofcriteriacanbeusedasachecklistwhendeterminingifacountryisan

emergingeconomyornot,asitsayssomethingaboutthecountry’slevelofself-

sustainingeconomicgrowth.Itdoes,however,notshowhowthesecriteriaseparatesa

countryfromadevelopedone.Aprecisedefinitionisthusnotpresented.Hoskisson

(2000)andKimandJung,(2009)however,bothtrytodefineemergingmarketsmore

precisely.

2.2.2.Definitionsofanemergingmarket

Emergingeconomies

Hoskisson(2000)defineemergingmarketsascountrieswithlowincomeandrapid

growththatuseeconomicliberalizationastheirprimarysourceofgrowth.This

definitionis,however,quitebroadandnotsufficientenoughtoprovideanyguidelines

todefiningifacountrycanbecharacterizedasemerging.

TheDoubleTrianglemodel

KimandJung(2009)presentamoretheoreticalapproachtodefiningemergingmarkets.

Theyhavedevelopedadoubletrianglemodel,whichisthebasisoftheiremerging

marketsdefinition:emergingmarketsarecountrieswithacompetitiveadvantage,

measuredbythesharesofGDP,exports,andoutwardforeigndirectinvestment,thatis

higherthantheaveragecompetitiveadvantageofallothercountriesexceptdeveloped

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countries.Thedoubletrianglemodelcombinesamacrotriangleandamicrotriangle.

Thepurposeofthemacrotriangleistodistinguishemergingmarketsfromdeveloping

marketsusinganintegrated,competitivenesstheoryapproach.Theirstudycombines

conceptsfrombothPorter’sDiamondandDunning’sEclecticParadigmtointegrate

differenttheoriesoncompetitivenessofnationsandfirmsintothemacrotriangle.

ThedifferentcomponentsofthemacrotriangleareGDPandExports,whichareproxies

forthecompetitivenessofnations,Outwardforeigndirectinvestment(OFDI),whichisa

proxyforthecompetitivenessforfirms,andGNIpercapita,whichissupposetodefine

thecountry’seconomyclassification,suchasdevelopedoremerging.GDP,exportand

OFDIareallmeasuredbysharesintheworld,andnotbyabsoluteamounts(Kimand

Jung,2009).

Figure3:Macrotriangle(KimandJung,2009)

Themicrotriangle’spurposeistofindemergingmarketglobalcompanies(EMGCs)with

sustainablecompetitiveadvantages.ThismodelcombinesFischer&Schornbeg’s

IndustrialCompetitiveindex(2007),Bonagliaetal.’smultipleconnection(2007),and

Snowdon&Stonehouse’scompetitivenessmeasure(2006).Thefourfactorsinthemicro

trianglearedevelopedbasedonthesetheories,andaretheTNIindex,growthindex,

profitindex,andfirmsize.TheTNI,ortrans-nationalityindex,isthetotalaverageratio

offoreign-tototalassets,foreign-tototalsales,andforeign-tototalemployments,

basedonathree-yearaverage.Thegrowthindexisthefirm’scompoundannualgrowth

rate(CAGR)oftotalsalesinthreeyears.Theprofitindexmeasuresthethree-year

averageoperatingincome.Inaddition,thefirmsizeisincludedasitcanactasavaluable

sourceofmonopolisticadvantage(KimandJung,2009).

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Figure4:Microtriangle(KimandJung,2009)

Themacroandmicrotrianglescombinedbecomethedoubletrianglemodel.Itspurpose

istoactasatheoreticalfoundationforselectionofsustainableemergingmarketsand

emergingmarketsglobalcompaniesoutofallpossiblesamples.Thestudyusesthe

WorldBank’sWorldDevelopmentIndicators(WDIs)fornationaldataandThomson

ReutersDatabaseforfirmdata.Intheirstudy,KimandJung(2009)chose171countries

withafive-yearaverageGNIpercapitathataresmallerthanthoseofdeveloped

countries.Then,themacrotriangleanalysischoses19emergingmarketswithafive-

yearaverageofGDP,exports,andTNIthatarehigherthantheaverageofthe171first

chosencountries.Themicrotriangleisthenusedtorankthetop100globalcompanies

ineachgroup,advancedmarkets,newlyindustrializedeconomies,andemerging

markets.Thedoubletrianglemodelisthusatheoreticalapproachtodefiningthescope

ofemergingmarketsandemergingmarketsglobalcompanies(KimandJung,2009).

Figure5:Thedoubletrianglemodel(KimandJung,2009)

ThedefinitionpresentedbyKimandJung(2009)isbackedbyextensiveexplanationand

theory,aswellasitisquitespecific,andisthusasufficientdefinitionwhendetermining

acountry’sclassificationasanemergingmarket.

2.2.3.Countryclassification

InstitutionssuchastheWorldBank,OrganizationforEconomicCooperationand

Development(OECD),andtheUnitedNationsConferenceonTradeandDevelopment

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(UNCTAD)allhavetheirowndefinitionsofemergingmarkets.WorldBank’sdefine

emergingmarketsasallmarketswithagrossnationalincome(GNI)percapitathatis

lowormiddle,orcountrieswhosecorporationsarelistedintheFTSEall-worldindexor

theDowJonesGlobal2500,orboth.OECDdefinesemergingmarketsseparatelyfrom

transitionaleconomiesbasedontheparticipantsintheOECD’sForumonAgricultural

PoliciesinNon-MemberEconomies.UNCTADusesMorganStanleyCapital

International’sEmergingMarketsIndex(MSCIEMIndex)todetermineemerging

markets(KimandJung,2009).

WorldBank

(DowJonesandFTSElists)

OECD UNCTAD

(MSCIEMIndex)

Brazil,Chile,Colombia,

Mexico,Peru,China,India,

Indonesia,Malaysia,

Philippines,Pakistan,South

Korea,Taiwan,Thailand,

CzechRepublic,Hungary,

Poland,Russia,UnitedArab

Emirates,Turkey,Egypt,

Morocco,andSouthAfrica.

Argentina,Brazil,

Chile,China,Czech

Republic,Hungary,

India,Korea,Mexico,

Poland,SouthAfrica,

Albania,Belarus,

Bulgaria,Croatia,

Estonia,Kazakhstan,

Latvia,Lithuania,

Romania,Russia,the

SlovakRepublic,

SloveniaofUkraine.

Brazil,Chile,Colombia,

Mexico,Peru,China,

India,Indonesia,Korea,

Malaysia,Philippines,

Taiwan,Thailand,Czech

Republic,Egypt,Greece,

Hungary,Poland,Qatar,

Russia,SouthAfrica,

Turkey,UnitedArab

Emirates.

Table1:Countriesclassifiedasemergingmarkets.Sources:FTSE(2015),KimandJung(2009)&MSCI(2016).Ownillustration.

Basedontheselistsofcountries,onecanseethattheOECDliststandsoutwithseveral

differentcountriesthantheotherindexes.TheOECDlistisalsotheoldest.TheDow

JonesandFTSElistsarequitesimilartotheMSCIEMIndex,withtheonlyexceptions

beingQatar,GreeceandMorocco.AsKimandJung(2009)alsorelyontheWorldBank’s

indications,theWorldBankandUNCTADlistsareassumedmorecrediblethanthe

OECDlist.

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2.2.4.Summaryofdefinitionsofemergingmarkets

KimandJung’s(2009)definitionofemergingmarketsiselaborateandsuitablefor

definingemergingmarketinthecontextofthisthesis.Forthepurposeandscopeofthis

paper,however,itismoresensibletousetheclassificationlistsprovidedbytheWorld

BankandUNCTADtoidentifywhetherornotIndonesiaisanemergingmarket.Thisis

done,asthepagelimitationsdoesnotallowforathoroughanalysisofwhether

Indonesiaisanemergingmarketornot.BasedontheclassificationlistfromtheWorld

BankandUNCTAD,Indonesiaischaracterizedasanemergingmarket.

3.Researchdesignandmethodology

Thischapterwilloutlinethechosenresearchphilosophy,researchstrategy,whichgives

aguidethroughtheresearchprocess,aswellasspecificresearchmethods,whichhave

beenappliedingatheringandanalyzingdata.

3.1Researchphilosophy

Theresearchphilosophyrelatestothedevelopmentofknowledgeandthenatureofthat

knowledge.Itdependsonthewaytheauthorviewstheworld,andwilldeterminethe

wayresearchisconducted.Thisviewwillunderpintheresearchstrategyandthe

methodschosenaspartofthatstrategy.Therearethreecommonwaysofdefining

researchphilosophy:positivism,realism,andinterpretivism.Positivistprefertowork

withanobservablesocialrealityinwhichtheendproductofsuchresearchcanbealaw-

likegeneralizationwhereonlyphenomenathatareobservablewillleadtoproductionof

credibledata.Realistsbelievethatobjectshaveanexistenceindependentofthehuman

mindandwhatthesensesshowasrealityisthetruth.Atlast,interpretivistsarecritical

ofpositivismandarguethatinsightintothiscomplexworldarelostifcomplexityis

reducedtoaseriesofgeneralizations.Businesssituationsarecomplexandunique,and

canthereforenotbegeneralized(Saundersetal,2009).

Thispaperiswrittenfromaninterpretivestance,asIbelievethatonlythrough

subjectiveinterpretationandinterventioninrealitycantheresearchquestionbefully

understoodandanalyzed.However,theremaybemanyinterpretationsofrealityandI

amawarethatmyinterpretationandanalysismightnotbetherealityofothers.Asthis

16

researchwillaimtogainin-depthknowledgeaboutaspecificmarketandusethis

knowledgetocreateane-marketingplanforaspecificcompany,therelevanceandneed

forgeneralizabilityislimited.

3.2Researchapproach

Theresearchapproachdependsontheextentofclarityaboutthetheoryatthe

beginningoftheresearch.Thedesignoftheresearchprojectdependsonwhethera

deductiveorinductiveapproachisused.Adeductiveapproachentailsdevelopinga

theoryandhypothesis,anddesignaresearchstrategytotestthehypothesis,whilean

inductiveapproachcollectdataanddeveloptheoryasaresultofadataanalysis

(Saundersetal,2009).Therefore,thispaperfollowsaninductiveresearchapproach,as

itwillseektodevelopane-marketingplanforZaloraIndonesiabasedonathorough

situationanalysis.

3.3Researchdesign

Theresearchdesignisthewayofturningtheresearchquestionintoaresearchproject

(Robson,2002),andwillbethegeneralplanofhowtoanswertheresearchquestion.It

containstheresearchstrategy,datacollectionanalysis,wherethegroundsarelaidfor

howresearchisconducted,aswellasthequalityoftheresearch.

3.3.1Researchstrategy

Thechoiceofstrategydependsontheresearchquestionandobjectives,yourexisting

knowledge,timespanandotheravailableresources,aswellasyourresearchphilosophy

(Saundersetal,2009).ThedifferentresearchstrategiespresentedbySaundersetal

(2009)areexperiment,survey,casestudy,actionresearch,groundedtheory,

ethnographyandarchivalresearch.Thesestrategiesarenotmutuallyexclusiveandone

canthuscombinethesestrategies.

Thispaperwillanswertheresearchquestionusingacasestudy.Casestudyisastrategy

fordoingresearchinvolvinganempiricalinvestigationofaspecificreallife

phenomenonusingmultiplesourcesofevidence.Asthepaperseekstoprepareaplan

foraspecificcompany,andnotageneraltheory,itdoesnotmatterthatacasestudy

strategydoesnotprovideabasisforestablishinggeneralityoffindings.Whentryingto

17

understandasmuchaspossibleaboutasinglesubject,casestudiescanprovidean

opportunitytospecializeandgodeepintoinformationandproposeresearchresults

fromamorehumanlevel.Datacollectiontechniquesmayincludeinterviews,

observation,documentaryanalysisandquestionnaires,amongstothers(Saundersetal,

2009).Thispaperwillusedatafrombothdocumentaryanalysisandinterviewstoset

thebasisforansweringtheresearchquestion.

3.3.2Datacollectionandanalysis

Asexplainedunderresearchstrategy,thecaseanalysiswillcollectdatausingthe

methodofinterviewanddocumentaryanalysis,whicharequalitativecollection

methods.Thus,thispaperusesamulti-methodqualitativestudy,entailingtheuseof

differentkindsofnon-numericaldata,andnotamixofqualitativeandquantitativedata

oronlyonesourceofdata(Saundersetal,2009).Toanswerthemainresearchquestion

ofhowZaloracanfurtheritsgrowthintheonlinefashionretailindustryinIndonesia,

onemustresearchZalora’sprerequisitesforbusiness,bothinternalandexternal.

Documentarydatawillbethefirstmeansofdatacollection.Asthissecondarydata

mightnotfullyexplainthecompany’ssituation,aninterviewasaprimarysourceofdata

willfillouttheholesinthesituationanalysisthatarenotcoveredbysecondarydata.

Primarydataalsoenablestheanalysistogofurtherindepthandbemorecompany

specific,whichwillbenecessarywhenpreparingane-marketingplan.

Secondarydata

Thetypeofsecondarydatausedinthisthesisismainlydocumentarysecondarydata.

Thisincludeswrittenmaterials,whichinthiscasemainlyreferstobooks,journals,

reports,magazineandnewspaperarticles,andwebsitecontentandarticles.Booksand

journalsareinitiallyusedtobackstatementsandideaswiththeory,whiletheother

secondarydatasourcesisusedingatheringinformationforasituationanalysis.The

mainadvantageofusingsecondarydataisthatitalreadyexists,whichsavestimeand

effortrelativetoprimarydata.Itsdisadvantageisrelatedtothedataqualityandmethod

ofcollection,whichisnotunderthecontroloftheresearcherandcanbeharderto

validate(Sandersetal,2009).

18

Primarydata

Theuseofaninterviewasadatacollectiontoolcanbehelpfultogathervalidand

reliabledata,whichisrelevantforthispaper’spurpose.Inthiscase,asemi-structures

interviewwillbeconductedonaone-to-onebasiswithoneofthecompany’s

representatives.Thechoiceofasemi-structuredinterviewisbasedonthedesiretohave

questionsandstructureathand,butalsobeabletoaskfollow-upquestionswhen

necessary.Italsoenablesabetterflowofconversationbetweentheinterviewerandthe

respondent,whichmayresultindetailedinformationnototherwiseprovided(Sanders

etal,2009).Thefactthattheinterviewwillbeconductedone-to-oneistosomeextent

basedonthelimitedaccesstomorethanoneinterviewobject,butalsobecauseofthe

limitedneedforseveralemployeesfromaheadpositionswhenmainlygathering

company-andmarket-specificinformation.Becauseofdifferencesinlocationbetween

theinterviewerandtheinterviewobject,theinterviewwillbeconductedelectronically

throughSkype.TheinterviewobjectisthemarketingdirectorofZaloraIndonesia,Jo

Bjordal.BecauseboththeinterviewerandtheinterviewobjectareNorwegian,the

interviewwillbeconductedandtranscribedinNorwegian,asseeninappendix1,while

quotedandreferredtoinEnglishthroughoutthetext.

3.3.3Researchquality

Agoodresearchdesignisimportanttoreducetheriskofgettinginformationwrongin

thepaper.Attentionthusneedstobepaidtotwoemphasesonresearchdesignin

particular:reliabilityandvalidity(Saundersetal,2009).

Attentionhastobepaidtowhetherthedatacollectiontechniqueoranalysisprocedures

willgiveconsistentfindingsornot:iftheyarereliable(Saundersetal,2009).When

usingsecondarydata,thedatethematerialwaspublishedissignificantbecause

informationmayvaryovertime,especiallyinsuchahighlydevelopingmarketasthee-

commercemarket.Itisthereforeimportanttonotethatthelatestdatausuallywillbe

themostreliable.Iwillthusstresstheuseofcurrentmaterialandquestionolderdata

thatmightbeoutofdate.Thereliabilityisalsooptimizedtobestabilitybyevaluating

thecredibilityofonlinesourcesandwebsites.Onlyinformationfromwhatisassessedas

crediblesourcesisincludedinthethesistoincreasereliabilityoftheendresult.This

19

thusexcludescontentbasedonuser-generatedinformationfromsitessuchasforums,

socialmediaandWikipedia.

Participantbiasmustalsobetakenintoconsideration.Theinformationgatheredfrom

theinterviewwiththemarketingdirectorofZaloraIndonesiacanbequestionedin

termsofitsreliability.Theinterviewobjectmight,insomeoccasions,answerinaway

thatportraysthecompanymorepositivelythanthereality.Theinformationusedfrom

theinterviewwilltherefore,whenpossible,bebackedbyinformationfromother

secondarysources.Thisisnot,however,alwayspossible,asprimaryinformationgained

fromtheinterviewcannotalwaysbefoundelsewhere.

Validityoftheresearchisconcernedwithwhetherthefindingsarereallyaboutwhat

theyseem(Saundersetal,2009).Supportinginformationfromonesourceusingother

sourcesincreasesthevalidityoftheresearchusedinthispaper.Validityoftheinterview

isincreasedviathequestionformulation,whichavoidssuggestivequestions,butopens

fordiscussionaroundthesubject.

Thereliabilityandvalidityofthepaperisoptimizedtobestability.Thisisdoneby

evaluatingthesourcesusedforinformationgathering,astomakesurethatthe

informationisbothuptodateandfromareliablesource.Theinterviewisalso

structuredinawaythatincreasesvalidity,aswellasinformationusedintheanalysisis

backedbyothersourcestobestabilitytoavoidmisinformation.

20

4.Casestudy:ZaloraIndonesia

4.1Companyprofile

Zaloraisanonlinefashionretailerthatdealswithsell-sidetransactionale-commerce.

ZaloraisaventureunderRocketInternetGmbH,whichownsanetworkofcompanies

activein110countriesacrosssixcontinents.RocketInternetoperateswithaplatform

forbuildingandscalingonlinecompaniesthataddressbasicconsumerneedsonthe

Internet,withinthee-commerce,marketplace,financialtechnology,andtravelsectors.

Zalorafallsunderthee-commercesector(RocketInternet,2015).Zaloraisoneof

RocketInternet’s“ProvenWinners”,whichmeansthattheyareoneofRocketInternet’s

largestandmostmaturecompanies.Therequirementforgettingthe“ProvenWinner”

stampisthatthecompanytypicallywillhaveavaluationinexcessofEUR100million

andhaveatrackrecordwithEUR50millioninrevenueforatleasttwoyears.Zalora

wasinDecember2014valuedatEUR559.6million,aswellastheirkeyfinancialfigures

for2013and2014showsrevenueswellbeyondEUR50million,makingthema“Proven

Winner”bygoodmargins(RocketInternet,2014).

ZaloraGroupisbelievedtobetheleadingandfastestgrowingonlinefashionretail

groupintheAsiaPacific,sellingclothing,shoes,beautyproducts,andaccessories

(RocketInternet,2015).Thecompanyoffersitscustomersfashionfrombothlocaland

internationalhigh-streetbrands,aswellasitsownZalorabrand,bothontheirwebsite

andmobileapp.Theyexplainmuchoftheirsuccessbasedontheirabilitytofillinthe

missinggapsinsupplyofaffordablehigh-streetfashiononline,aswellashavingan

establishedlocaldistributionnetworkwithitsownlast-miledeliveryfleetthatenables

themtoarrangeforcost-effectivenext-daydeliveriesinmostbigcities(RocketInternet,

2014).Tocatertothedifferenttastesoftheregion,Zaloralocalizeitsonlinesitesand

services,fromhavinglocal-speakingcustomerserviceoperatorstoofferingMuslim

weartocustomersinMalaysiaandIndonesia(Cnbc,2015).

IndonesiaisoneofeightcountriesthatZaloraoperatesinacrossAsia,inadditionto

AustraliaandNewZealandwheretheyoperateunderthebrandTheIconic(Rocket

Internet,2014).Zaloraoffersover500brands(Zalora,2016a),andquicklybecamethe

21

marketleaderwithinonlinefashioninIndonesiawhentheyenteredthemarket

(Bjordal,Interview,Appendix1).Theirseniormanagementgroupconsistsofacountry

managerfromHongKong,themarketingdirectorandinterviewobjectforthisthesis,Jo

BjordalfromNorway,andanoperationsdirectorwhoisalsofromNorway.Intotal,

ZaloraIndonesiaconsistsofaround700employees,includingeveryonefromwarehouse

employeesandpackagedistributorstomanagers.Onlyfiveoutof700employeesare

international,therestareIndonesian(Bjordal,Interview,Appendix1),givingthemthe

resourceoflocalknowledge.

4.2History

ZaloraIndonesialaunchedinMarch2012aspartofthebigfirstlaunchoftheZalora

Company.Inthebeginning,therewereconcernsaboutthecompany’sgeneral

performanceandthee-commercepotentialofIndonesia.Themanagingdirectorof

ZaloraIndonesiaatthetime,NadiemMakarim,however,assuredthatthecompanywas

doingwellandthatthepotentialoftheIndonesianmarketwashuge(TechinAsia,

2012).From2012to2013,theZaloragroupraisedalotofmoney,largelyinvestments

thatweremadeonthehopesoffutureprofits.Anyhow,theylostUS$95millionin2012,

andwerenotprofitablein2013or2014either.Thelossesin2014,however,were

halvedcomparedto2013(TechinAsia,2015a).

In2013,Zalorastarteddevelopingitsownprivatelabel,whichin2014waslaunchedas

theZaloralabel.Bythistime,Zaloraownedtheentiresupplychainandwasthusableto

reacttotrendsandseasonalpreferencesquickly.Zalora’siOSandAndroidmobileapps

werealsolaunchedin2013,inAprilandJulyrespectivelyandhave,asof2015,been

downloaded5milliontimes.Bytheendof2014,halfofZalora’scustomertrafficcame

throughthemobilesiteandappcombined(TechinAsia,2015a).

2014wasanexitingyearforZaloraIndonesia.TheyintroducedanewlineofMuslim

wearandmodestfashionaroundthetimeoftheMuslimfastingmonth,calledZalia.

TheywereevenratedasthefavoriteplacetobuyfestiveMuslimwearduringRamadan

inMalaysiaandIndonesia(RocketInternet,2014).Theyalsolaunchedamarketplaceon

theZaloraplatform.Thismarketplaceactedasaboutiqueforlocaldesigners,andby

22

2015heldabout2000sellersand100,000differentproducts(TechinAsia,2015a).

During2014,Zaloralaunchedvariouscollaborationswithsomeoftheworld’smost

knownfashionbrands,likeMango,NewLook,RayBan,OakleyandSephora.Toeasethe

transitionfromofflinetoonlineshopping,Zaloraexperimentedwithpopupshopsinthe

bigshoppingdistricts,includingJakarta,Indonesia.InJakarta,90%ofthecustomers

whovisitedthepopupshophadnotpreviouslyboughtanythingfromZalora,makingit

asuccessfulmarketingmoveintermsofpromotingbrandawareness(RocketInternet,

2014).

RocketInternetcreatedtheGlobalFashiongroup(GFG)in2014,togetherwithother

investors.Thisgroupconsistsoftheirfiveleadingemergingmarketfashione-commerce

companies:Dafiti,Lemoda,Zalora,Jabong,andNamshi.GFGwascreatedtoenablebest

practicesharingacrossfunctionsglobally,delivereconomiesofscaleinsourcing

internationalbrandsandglobalmediachannelmarketing,strengthenthejointprivate

labelefforts,andincreasethecompanies’abilitytoattractandholdontotoptalents

whileadvancingthetechnologyplatformdevelopment(RocketInternet,2014).

Intheendof2015,ZaloraIndonesiapartneredupwithPosIndonesia,thestate-owned

postalservice.Thiswasdonetobetterthedeliveryserviceandeasethecustomers’

shoppingexperience(RetailNews,2015b).IndonesiaiscurrentlyZalora’sbiggest

marketinAsia(DealStreetAsia,2015b).Theirpresenceonsocialmediaismainly

throughFacebook,InstagramandTwitter,with5.5million,124thousand,and64

thousandfollowersrespectively(Zalora,2016a).

4.3Businessperformance

ThelatestavailableannualreportforRocketInternet,includingkeyfiguresforZalora

groupisfrom2014.Thesefinancialfiguresincludenumbersfortheentiregroup,and

notonlyIndonesia.Asmentioned,ZaloragroupwasvaluedatEUR559.6millionin

December2014.From2013to2014,Zalorasawabiggrowthinnetrevenueof70,5%,

drivenbya91,4%growthintransactions.Totalordersgrewby89,5%from2013to

2014,aswellasthenumberofactivecustomersgrewby72,9%,definedascustomers

23

whohavemadeatleastonetransactionwithinthelasttwelvemonthsbeforetheendof

theperiod.Thegrossprofitmarginamountedto34,1%ofnetrevenue,whilethe

adjustedEBITDAmarginimprovedfrom-89,7%in2013to-58%in2014(Rocket

Internet,2014).ThefactthattheEBITDAisnegativeentailsthatZalorawasstill

experiencinglossesin2014,evenslightlybiggerin2014thanin2013,althoughnot

relativetotheincreaseinnetrevenue.Itisalsonormalforacompanytohaveanegative

EBITDAintheearlyyearsbecauseofhighstartupexpensesanddifficultiesingaining

customers(SmallBusiness,2016a).

In2013,themanagingdirectoroftheZaloraGroup,MicheleFerrario,saidinan

interviewthattheyexpectedthecompanytobeprofitablebefore2015(TheNextWeb,

2013).RocketInternet,however,hasnotsetadeadlineforprofitability,buttheannual

reportnotesthattheaimisfortheircompaniestobreak-evenatEBITDAlevelssixto

nineyearsafterlaunch,whichwillbesometimebetween2018and2021forZalora

(Forbes,2015a).AsofApril2016,ZaloraIndonesiastillhasanegativeEBITDA,but

marketingdirector,JoBjordal,ensuresthattheyareontherighttracktobecoming

profitablewithinacoupleofyears(Bjordal,Interview,Appendix1).

24

5.E-marketingplan

Thise-marketingplanforZaloraIndonesiaisbasedontheSOSTACstructure,which

standsforsituationanalysis,objectives,strategy,tacticsactionsandcontrol.Asactions

involveinformationaboutwhointhecompanywilldowhatwhen,thisistoodetailed

andnotrelevantforthepurposeofthispaper.ASOSTCstructurewillthusbepresented

withoutactions.

Figure6:SOSTACmodel(SmartInsight,2016)

5.1Situationanalysis

ThesituationanalysiswillenlightenthecurrentsituationintheIndonesianonline

fashionretailmarket,aswellasZalora’sroleinthemarket.Thiswillinvolvebothan

externalandaninternalanalysis.Thesituationanalysiswillthusenlightenthewaysin

whichZalora’ssituationinIndonesiafosterorhinderthegrowthintheonlinefashion

retailindustry,andtherebyanswerthefirstsub-questionofresearch.

5.1.1Externalanalysis

Theexternalanalysisshouldincludeanalyzesofcustomers,competitors,opportunities

andthreats(Chaffey,2013).ThiswillbedoneusingaPESTLEanalysisandaPorter’s

fiveforcesanalysis.

25

5.1.1.1PESTLE

APESTLEanalysisidentifiesfactorsinthemacro-environmentrelevantfortheindustry

inquestion.PESTLEisanacronymforpolitical,economic,socio-cultural,technological,

legislative,andenvironmentalaspects(Allen,2001).APESTLEmodelisincludedasit

takesintoconsiderationeveryexternalfactorthatisnecessaryforaprofoundanalysis

ofthemacro-environmentathand.Forthispurpose,IchoseaPESTLEmodelovera

moresimplePESTaslegislativefactorswereespeciallyinterestingtoseparatefrom

politicalfactors,aswellastheenvironmentinIndonesiaisimportanttotakeinto

consideration.

Figure7:PESTLEmodel.Owncreation

Politicalfactors

Businessislinkedtopolitics,andnotalotofwhatcompaniesdoescapesgovernmental

orpoliticalinfluence.Towhatextent,however,varies(Allen,2001).Thisanalysiswill

determineinwhatwaythepoliticalenvironmentinIndonesiacanaffecttheonline

fashionretailindustry.

Indonesiais,andhasbeensince1998,ademocracywithopenelections,freepressanda

stableeconomy(MinistryofforeignaffairsofDenmark,2012).Indonesiaiscurrently

theworld’sthirdlargestdemocracy,thebiggesteconomyinSoutheastAsia,anda

memberoftheG20(Gov.uk,2015).IndonesiaisalsoamemberoftheWTO,forcingthem

tofollowtradespecificrulessetbytheorganization,butalsoenablingthemtoenjoy

marketsymmetryandlessimperfectmarketfactors.Thisispositiveasthetrade

conditionsareregulatedandonlineretailstorescanfreelyandsafelyimportproducts

fromabroad(WTO,2016b).

Political Economic Socio-cultural Technological Legislative Environmental

26

Indonesiastillhasalotofproblemswithcorruption.In2014,Indonesiaranked107of

174intheTransparencyInternationalcorruptionperceptionindex,indicatingahighly

corruptandnon-transparentenvironment.Whilethecountryisshiftingforthepositive,

theyarestillbelowitspeersandneighbors(Gov.uk,2014).Apartfromcorruption,there

areotherfactorsthatnegativelyaffecttheeffectivenessandperformanceofgood

governanceinIndonesia.Governingapopulationof260millionpeoplewithdifferent

religiousandculturalbackgroundsisdoomedtoencounterproblems(Indonesia

Investments,2016b).AnIssuerelatedtogovernance,affectingthecountry’seconomy

andinvestmentclimate,relatestoinfrastructure.Eventhoughthegovernmenthasput

infrastructureasatoppriorityinitsmediumtermdevelopmentplan,thecurrent

regulatoryframeworkisnotoptimallyconducted.TheratioofIndonesia’sspendingon

infrastructuretoitsGDPisonlyaround2.3percent,whichislowcomparedtoregional

neighborslikeMalaysiawith4.3percent,Indiawith6.5percent,andThailandwith3.4

percent(IndonesiaInvestments,2014).Thisaffectsonlinefashionretailers,asbad

infrastructure,especiallyintermsofelectricity,Internet,androads,limitsthe

company’sbusinessoptimization.

EventhoughtheIndonesiangovernmentregardthemselvesasstable,themarketing

directorofZaloraIndonesiadisagrees:“Itisveryunstable,andIgotadifferent

perspectivewhenItalkedtoagirlfromGooglewhoworkswithgovernmentrelationsin

Asia,whosaidthatVietnamandIndonesiaarethemostproblematiccountriesandyou

neverknowwhatisgoingtocomeoutofthem.Theycanscrewyouoveriftheydecideto,

anytime.SoIwouldnotnecessarilysaythattheyarestable.Theymightgivethe

impressionthattheyare,butwehaveadifferentexperience”(Bjordal,Interview,

Appendix1).Eventhoughthegovernmentmightnotbeasstableastheyexpress,they

aretryingtotakemoreinterestine-commercedevelopment.Thisisprevalentinthe

legislativeandregulatoryactionsbythegovernmentintryingtoevolvethee-commerce

market,presentedunderlegislativefactors.

Arelativelyunstablegovernment,atleastintermsofe-commerceactions,lackof

investmentininfrastructure,andcorruptionarenegativelyaffectingtheonlinefashion

retailmarketinIndonesia.Uncertaintyconcerningthegovernment’sactionstowardse-

27

commercemightthusbeapoliticalfactorthattosomeextentcausesconcernforthe

playersintheonlinefashionretailmarket.

Economicfactors

Indonesiaiscurrentlytheworld’s18thlargesteconomy,experiencingremarkable

growth.Inthemid2000s,thefinancialsystemchangedfromlackingsupervisionand

transparencytoentailingmoreprudentfiscalpoliciesinlinewithinternational

standards,whichfosteredintegrationwithglobalmarkets.Inflationinthecountryis

undercontrol,bothpublicandprivatedebthasdecreasedsharplyasapercentageof

GDP,andinternationalreserveshavehadafastgrowthinthelatestyears.Thisenables

opportunitiesforastrongeconomicperformance.Inthelongrun,theIndonesian

governmentaimstobeinthetopsixoflargesteconomiesby2030(Indonesia

Investments,2016a).Domesticconsumptiongrowthisalsoakeyelementaccountingfor

Indonesia’seconomicprogress.Indonesianprivateconsumptionhasriseninlinewith

percapitaGDPgrowthandlowborrowingcosts(McKinsey&Company,2013).

Indonesiaisstillarelativelypoorcountry,however,withalowpurchasingpower

amongstconsumers.Onlyaround10percentpayincometaxesinIndonesia,whilethe

restdoesnothavehighenoughsalariestopaytaxes(Bjordal,Interview,Appendix1).

TheeconomyinIndonesiaisalsoreflectedbythepaymentmethodsusedinthee-

commerceindustry.Onlyaboutfourpercentofthepopulationownsacreditcard,and

creditcardsarecurrentlytheonlywayofpayingonline.ATMsareusedasapayment

methodforthoseonlyowningadebitcard,whilecashondelivery(COD)isofferedby

somee-retailersforthosewantingtopayincashwhenreceivingtheirproduct,orfor

thosewhodonottrustonlinepaymentmethods.Thepaymentsystemisthusa

challengeforonlineretailers(Bjordal,Interview,Appendix1).Thispaintsapictureof

theeconomyinIndonesia,whichstillhasalongwaytogo.

Asincomesrise,consumersaremorepronetobuyingtechnologicaldevicesenabling

themtoshoponline.Economicprogressisthuspositivefortheonlineretailmarketas

consumersspendmoremoneyonclothes,morethanthebarenecessity,aswellbuying

Internetaccessibledevices.EventhoughtheeconomyinIndonesiaisstillatanemerging

28

stageandunderdevelopedinsomeways,thecurrentgrowthinIndonesiaandits

potentialwillhelpfostergrowthintheonlinefashionretailmarket.

Socio-culturalfactors

IndonesiahasareligiousmajorityofMuslims,wherethelargestpartofthecommunity

canberegardedasmoderate,tolerant,andsupportiveofpluralism,democraticvalues

andthesecularstate.Thereis,however,stillsomeradicalismonthefringesofthe

Islamicspectrum.TheiraimisforIslamtoholdalargerroleintheIndonesiansociety,in

particularwhenitcomestopolitics.Thisradicalcommunityoccasionallymarkstheir

presencewithviolentactssuchasbombattacks(IndonesiaInvestments,2016b).This

doesnotdirectlyaffectthee-commercemarketinIndonesia,butisafactorthat

influencesthestabilityintheIndonesianenvironment.Whenitcomestodoingbusiness

inIndonesia,religionhasabigimpactonthebusinessculture(Communicaid,2011).

ThebusinessculturediffersfromWesterncountries,whichmightbeahurdleformany

internationalsdoingbusinessinIndonesia.Zalora’sMarketingDirector,JoBjordal,

confirmsthis:“ThereisalargeculturedifferencebetweenNorwayandIndonesiaandit

wasquiteabigcultureshocktocomehere.Ihavehadtoreadjustmymentalityandthe

wayIthinkconsiderablywhenIcamehere,andsodoeseveryonewhocomestoIndonesia

tobeabletofunctionintheirrole”(Bjordal,Interview,Appendix1).

Indonesiaischaracterizedasacountrywithayoungpopulation,wherenearly60

percentareyoungerthan30yearsold,withapopulationexpansionrateof2.9million

annually.TheIndonesiancustomersareexperiencingariseinincomeandanabilityto

spendmoreondiscretionaryitems.TheurbanpopulationinIndonesia,amountingto

138millionasof2013,canbesetintofourcategories:Averywealthyupperclassof

abouttwomillion,apromisingconsumingclassof55million,anaspiringclassof69

million,andatlastastrugglingclassof14million(McKinsey&Company,2013).This

divideinthepopulationisalsoprevalentastowhoareabletospendmoneyon

discretionaryitems.IfonetakesZaloraIndonesiaasanexample,theyarecharacterized

asanaffordablefashionretailer,butonlythetoptenpercentrichestinIndonesia,are

abletoaffordtheirproducts(Bjordal,interview,Appendix1).

29

Therearesomecharacteristicscommonforallthecategories,however.Indonesian

consumersarefamilyoriented,risk-averse,brandloyal,favorlocalbrands,andlate

adoptersofnewproductsandtechnology.Thedifferencesinconsumercategoriesis

bestshownintheirshoppingengagementandfamiliaritywithdigitalplatforms,where

themorewealthierconsumersrankthehighest(McKinsey&Company,2013).

Ayoungpopulationwithincreasingpurchasingpowerisdefinitelypositiveforthe

onlinefashionretailmarketwheretheshoppersareusuallyrelativelyyoung(Bjordal,

interview,Appendix1).Theyarealsomorepronetotechnologicaldevelopmentandare

spendingmoreandmoretimeonline(McKinsey&Company,2013).Socialmedia

platformsarepopular,withFacebookbeingthenumberonemostvisitedsitein

Indonesia(SimilarWeb,2016).Thisincreasese-commercecompanies’potentialreach,

andoffersavarietyofplatformsforpromotion.

Thesocio-culturalenvironmentinIndonesiacanbecharacterizedbyaculturethat

highlyaffectsbusinesslife,aswellasayoungpopulationwithincreasingpurchasing

powerandInternetaccessibility.Thereligiousfactorcaneitherbeseenasaweakness,

asfashionandconservativereligiousviewssometimesclash,orbeembraced,asa

demandforreligiouslytraditionalclothingmightopenupabusinessopportunityfor

fashionretailers.Socialmediapopularityaddstothewaysinwhichanonlineretailer

canreachouttotheircustomerandincreasesthemarketpotential.Thisdevelopmentin

theIndonesianenvironmentcanhelpfostertheonlinefashionretailmarketasmore

potentialcustomersareemerging.

Technologicalfactors

ThemostimportantfactorfortheonlinefashionretailindustryistheInternet.Without

theInternet,therewouldbenoe-commerce.AsofJanuary2016,therewere88.1million

InternetusersinIndonesia,fourthplaceafterChina,IndiaandJapanintheAsiaPacific

region.Intheentireworld,Indonesiaisnumbereight(StatistaDossier,2016).Asthe

currentpopulationofIndonesiaisabout260million,only33.8percentareInternet

users(Worldometers,2016).TheshareofInternetusersinIndonesiais,however,

growingwithaforecastofreaching133.5millionin2019,whichwillbeanincreaseof

30

51.5percentfrom2016(StatistaDossier,2016).TechnologyinIndonesiaalsodevelops

fast,especiallyintermsofthefactthattheInternetfirstcametoIndonesia

approximatelyfiveyearsago.Thefastdevelopmentismainlybecauseofthelargeextent

ofinvestmentsmadebyinternationalcompaniesintechcompaniesandstart-ups

(Bjordal,Interview,Appendix1).

Anotherrelevantfactorfortheonlinefashionretailmarketissmartphoneusage.The

mobilephoneInternetuserpenetration,asof2015,was50.4percent,entailingmobile

phoneuserswhoaccesstheInternetfromtheirmobilebrowseroranapplicationat

leastonceamonth(StatistaDossier,2016).AlotofpeopleareonlyaccessingInternet

throughtheirphones,andmobileapplicationsarethereforeabighitinIndonesia:“I

wouldalmostgoasfarastosaythatmanycompanies,maybeincludingourselves,have

comelongerthanmanyNorwegianandEuropeancompaniesintermsofthetechnology

wehavebuilt.AlotoftheappsweuseherearemuchbetterthanthoseyouuseinNorway

becauseofalltheinvestments…Mostyoungpeoplehaveskippedthecomputerandgone

directlytoasmartphone.Itiskindoffascinating…Ithinkthat80percentofthosewho

haveInternetaccessonlyhaveaccessthroughasmartphone,accordingtoGoogle”


Basedontheabove-mentionedpoints,thetechnologydevelopmentinIndonesiais

steep,withalotofpotentialfortheonlineretailmarket.OnecansaythatIndonesiastill

hasalongwaytogointermsofInternetpenetration,butthecountryisdefinitelyonthe

righttrack.TheInternetvoidnotyettappedinIndonesiacreatesahugepotentialfor

onlineretailersinIndonesia.ThefactthatsmartphoneInternetaccessishighrelativeto

thetotalInternetaccessispositivefortheonlineretailindustry,asthismakesonline

shoppingmoreaccessibleformorecustomers. Legislativefactors

Asmentioned,theIndonesiangovernmentisnotespeciallystablewhenitcomesto

regulatingthee-commercemarket.InApril2014,theyreleasedanupdatedforeign

investmentregulation,commonlyknownastheNegativeList.Thislistbannedall

foreigninvestmentsinonlineretail(Corrs,2014).Foreigninvestmentinonlineretailis,

31

however,nowlegalagain.Thegovernmenthasopenedupapproximately100slotsthat

companiescanapplyfor,thusmakingFDIeasierthanbefore(Bjordal,Interview,

Appendix1).

Theopeningofonlineretailtoforeigninvestmentisapartofthenewe-commerce

roadmapsoontobepresentedbytheIndonesiangovernment.Thekeypointsofthe

roadmapentailsprovidenceoffinancingassistancetolocalstart-ups,developlogistics

facilitiesfore-commercebusinesses,improvethecommunicationinfrastructure,

proposetaxholidaysfortechstart-ups,educatee-commerceprofessionals,and

strengthencybersecurity(e27,2016).Aboutthee-commerceroadmap,Bjordalsaid:“A

socallede-commerceroadmapissettocome,andtheyhaveaskedusforinputandbein

theloop,buttobehonestIthinkanythingwhatsoevercancomeoutoftheregulationfrom

theroadmap.Wearealittlebitconcernedbecauseyouneverknowwhatthegovernment

heredecidestodo,andtherearealotofstrongorganizationsherethatarelobbyingeither

againstorfordifferentcases,sowearealittleconcernedbecauseearliertheyhavebeen

quitegrotesquewitheverythingthathastodowithe-commerce”(Bjordal,Interview,

Appendix1).

ItisprevalentfromBjordal’sstatementthatthegovernment’sregulationsofthee-

commercemarketareunsureandthattheirstatementsareuntrustworthy.Lawsand

regulationsaboute-commerceinIndonesiaapparentlyswingbackandforthandare

hardtoadhereto,alotbecauseoflobbyinginvariousdirections.Theplayersinthe

onlinefashionretailmarketthushavereasontobeanxiousaboutanysudden

regulationsaffectingthem.However,therearecurrentlynolawsorregulationsthat

directlyaffectstheonlinefashionretailmarketspecifically,leadingthemarketto

flourishunleashed,atleastfornow.

Environmentalfactors

Weatherphenomenons,suchasheavytropicalrain,andforcesofnature,like

earthquakes,happenfromtimetotimeinIndonesia.Thiscanaffectonlineretailersasit

maydisruptpackagedeliverybothbycausingdelaysanddestroyingtransportation

32

routes.BecauseIndonesiaislocatedonthePacificRingofFire,theyareespecially

exposedtoearthquakes(IndonesiaInvestments,2015).

Internetconnectionandelectricityisalsoimportantfortheoperationofafashionretail

website.Indonesiaisoftenplaguedbyelectricityblackoutsbecauseenergydemandhas

surpassedenergysupplyinthelatestyears(IndonesiaInvestments,2015).Thisisthus

hamperingthebusinessofonlinefashionretailasblackoutsdirectlyleadtoatemporary

businessshutdown.

AccordingtothemarketingdirectorofZaloraIndonesia,Indonesiansarenotvery

concernedabouttheenvironment.ThisleadstolessinvestmentinCSRrelatedactivities,

asbrandvalueisnotespeciallyaffectedbyenvironmentalinitiatives(Bjordal,Interview,

Appendix1).Foronlinefashionretailers,thisgivesthemtheopportunitytospendtheir

moneyonotherpartsoftheirbusiness,thushavingapositiveeffect.

TheenvironmentalfactorsaffectingtheonlinefashionretailindustryinIndonesiacan

benaturalphenomenons,electricityshortageandarelativelynon-existing

environmentalconcern.Thesefactorsare,however,nothugethreatstotheindustryand

thetwofirstwillinmostpartonlyhaveatemporaryeffectonfashionretailwebsites.

Thelastfactorwillagainsolelybepositivefortheindividuale-commercecompanies.

SummaryofPESTLE

TheaboveanalysisusingthePESTLEmodelhasprovidedapictureofhowthe

macroeconomicfactorsaffecttheonlinefashionretailindustryinIndonesia.The

politicalenvironmentisnotcompletelystable,andespeciallynotinregardstoe-

commerce.Corruptionandinsecurityaboutfutureactionsofthegovernmentcauses

concernintheonlinefashionretailindustry.

ThegrowthprosperityinIndonesia’seconomyisespeciallyimportantfortheonline

fashionretailmarket,asthecustomerbasegrowsinpacewithincreasedincomeand

Internetaccessibility.Thesocio-culturalfactorofayoungandtechnologicallyupdated

populationisalsopositivefortheindustryasthecustomerbasemostlyconsistsof

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relativelyyoungpeople.Thereligiousviewsinthecountrydoesnotnecessarilyposea

threatforfashionretailerseither,asMuslimwearforexamplealsocanbeseenas

fashionandsoldonline.

Thetechnologydevelopmentinthecountryisgrowingandmorepeopleareonline.In

someareas,suchasapplicationtechnology,Indonesiaevendoesexceptionallywell

becauseofhighlevelsofinternationalinvestments.Legislativefactorsareconnected

withthepoliticalfactorsinthesensethatlawsandregulationsarefluctuatingbetween

negativeandpositivewhenitcomestoe-commerce,andtheonlinefashionretailerscan

neverbesureastowhatthegovernmentalregulationswillsaynext.Lastly,

environmentalfactorssuchasnaturalphenomenons,likeheavyrainandearthquakes,

andelectricalblackoutsmaytemporarilyaffectthebusinessflow,whileconsumers’

environmentalneglectonlymakesiteasiertogetawaywithavoidingspendingmoney

onCSRandotherenvironmentallyfriendlyinitiatives.

5.1.1.2Porter’sfiveforces

Porter’sFiveForcesisananalysisofthecompetitiveforcesintheindustry,identifying

opportunitiesandthreats.Theweakertheinfluencefromthefivemarketforces,the

strongerthevaluecreationintheindustry,thus,creatingabiggerpotentialforthe

individualcompanies.Thefiveforcesthatshapecompetitionwithinanindustryare:the

riskofentrybypotentialcompetitors,thebargainingpowerofbuyers,thebargaining

powerofsuppliers,theclosenessofsubstitutestotheindustry’sproduct,andthe

intensityofrivalryamongestablishedcompanieswithinanindustry(HillandJones,

2009).Porter’sfiveforcesisanacknowledgedcompetitiveanalysis,takingallnecessary

factorsintoconsideration.Thepurposeofthesituationanalysisistolaythegroundsfor

determiningmarketingstrategies,inwhichPorter’sfiveforcesisadequate,in

comparisontoforexampleavaluenetanalysis(Credera,2010).

34

Figure8:Porter'sfiveforces.Owncreation

Threatsofnewentrants

TheonlinefashionindustryinIndonesiaisstillquitenew,andthemarketforecastsvary

widely.Thefactthatthee-commercemarketinIndonesiaisatanascentstage,however,

isappealingtonewentrantsasthegrowthpotentialishuge.IndonesiaisalsoSoutheast

Asia’smostsought-aftermarketforcompanieswantingtobecomeregionale-commerce

winners.IndonesiawasinsecondplacewhenitcametoB2Ce-commercegrowthrates

in2014,witharateof45.1percent,onlybeatbyChina’s63.8percent(TechinAsia,

2015b).Theapparelandfootwearcategoryexperiencesthebiggestgrowthintheonline

retailingindustry,andwillcontinuetogrowatafastpaceinthecomingyears,according

totheresearchcompanyEuromonitorInternational(Forbes,2015).Thiswillmake

Indonesiaanincreasinglyattractivemarketforonlinefashionplayers.

Thementionedgovernmentalnegativelistclosedonlineretailshoppingtoforeign

investment,whereasithadbeenunregulatedinthepast(Corrs,2014).Thislistthus

madeitimpossibleforforeignactorstoinvestintheIndonesianonlineretailmarket.

However,thesoontobepublishede-commerceroadmap,mentionedinthePESTLE

analysis,haseliminatee-commercefromthenegativelist,makingiteasierforforeign

Rivalryamongexisting

competitors

Threatofnew

entrants

Bargainingpowerofbuyers

Threatofsubstituteproductorservice

Bargainingpowerofsuppliers

35

companiestoenterinthemarket,andincreasingthethreatofnewentrants(e27,2016).

Iftherulingsofthee-commerceroadmaparerealized,thethreatofnewmarket

entrantswillincreaseevenmore.ReferringtothePESTLEanalysis,theseregulations

mightendupbeingsomethingtotallydifferentthanexpected,however,andmightnot

evenhaveapositiveeffectontheonlinefashionretailmarket.

Thecostofstartinganonlineretailbusinessisquitelow,butitstillrequiresalotof

researchandplanningtodesignaprofessionalandwell-functioninge-commercesite.Jo

Bjordal,marketingdirectorofZaloraunderpinsthis:“Thereareveryfewbarriers.Itis

easytoopenanewe-commercesite,tomorrowiftheywantto.Theywilljustneedateam

whocandoitandanetworktoaccesssuppliersthatsellthebrandstheywanttosell”

(Bjordal,Interview,Appendix1).Thetimeandcostofentryisthusnotespeciallyhigh,

whichagainincreasesthethreatofnewentrants.

Itisapparentthattheoverallthreatofnewentrantsishigh,especiallybasedonthe

marketpotentialandeaseofentry.Ifthee-commerceroadmapkeepsitspromises,this

willalsomakeiteasierandmorepromisingfore-commercestart-upsinIndonesia,

furtherincreasingthethreatofnewentrantsintheonlinefashionretailmarket.

Bargainingpowerofbuyers

WhendiscussingthepowerofbuyersintheIndonesianonlinefashionretailmarket,itis

necessarytodefinewhothebuyersare.AccordingtoBjordal,about80to90percentof

itscustomersarebetween18and35,withamajorityofwomen(Bjordal,Interview,

Appendix1).Thiscanbeassumedtobetheapproximatecasefortheentireonline

fashionretailindustryinIndonesia.

Theonlineretailsalesasapercentageoftotalretail,wasin20150.6percent,amounting

to15milliononlineshoppers.ThisisbackedupbyBjordal:“Onlineshoppingisstillvery

smallinIndonesiaandtheshareofretailsalesthatise-commerceisstilllessthanone

percent”(Bjordal,Interview,Appendix1).Themostpopularproducttopurchaseonline

isfashion,leadingwitharound39percent(MacquarieResearch,2016).If39percentof

the15milliononlineshopperspurchasefashion,thatamountstonearlysixmillion

36

people.Basedonthis,onecanconcludethatthebuyersize,referringtotheconsumers

purchasingfashiononlineinIndonesia,isrelativelysmallwhencomparedtotraditional

offlinefashionretail.However,sixmillionisnotasmallcustomerbase,anditis

increasing:“Itisstillverysmall,butitgrowsboundlesslyfast,andwillonlygrowfaster

andfasterwhenmoreandmorecompetitorsenters”(Bjordal,Interview,Appendix1).As

eachbuyerisanindividualconsumer,theyindividuallyprovideaminusculeamountof

totalrevenueintheindustry,asonepersontoorfromofsixmillionwillnotaffect

businessinabigway.Thisresultsinadecreasingbargainingpowerofbuyers,especially

forcompanieswithalargecustomerbase.

ThedifferentconsumercategoriespresentedinthePESTLEanalysisviewfashion

differently,withthepoorestgroupviewingclothesasanecessity,whilethewealthier

classseesclothesasmoreofastatussymbolbeyondjustwhattheyneed,butwhatthey

wantasanextraluxury.Asyouneedacomputer,tabletorsmartphonetoshoponline,it

isassumedthattheonlinefashionshoppersaremainlythehighestclassesofthe

population,thusviewingclothingasmorethananecessity.MarketingdirectorofZalora

Indonesiaalsoconfirmsthatnotallpartsofthepopulationareabletopurchasetheir

productseventhoughtheysaythattheysellaffordablehighstreetfashion:“Onlytop10

percentofIndonesia’srichestcanaffordtoshoponoursite”(Bjordal,Interview,Appendix

1).Thislimitationofbuyerswillincreasethebuyers’power.

Theproductsintheindustryarenotextremelydifferentiated.Itwilldependonthe

individualbuyerpreferences,butgenerallyspeaking,thedifferentonlinefashion

retailersdonotdifferentiatethemselvesinamassiveway.However,theydosell

differentbrandsandofferdifferentcustomerservice,whichmightdeterminewhichsite

acustomerwillvisit.Brandloyaltyisthusanimportantfactorwhendeterminingthe

powerofbuyers,wherecompanieswithahighlevelofbrandloyaltywillexperiencea

lowerbargainingpowerofbuyers.

Indonesianconsumersareloyaltothebrandstheyknow,andespeciallylocalbrands

(McKinsey&Company,2013),makingtheirpreferencesmoreimportanttotheindustry

companies.Thefactthatthecostofswitchingtoanotherfashionwebsiteisequalto

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zero,iftherearenoquantumormembershipadvantages,increasesthebargaining

powerofbuyers.Anotherpowerstrengtheneristhefactthatforwardintegrationisnot

possibleasretailersarethelastlinkinthesupplychain.Intheendofeachseason,the

fashionwebsiteswillneedtoselloutundesirableinventory,oftenatlowerprices,which

transferspowertothebuyers.

Whatagainweakensthepowerofbuyersistheminimalriskofbackwardintegration,as

mostindividualconsumerswillnotstartproducingtheirownapparelinsteadofbuying.

Arelativelylowportionofaconsumer’sbudgetisalsousedonapparelandfootwear,

whichusuallywouldleadtolesspricesensitivebuyers.Indonesianshoppers,however,

areknowntobeextremelypricesensitive,andenjoyhuntingdowndiscountsand

promotions(TechinAsia,2015c),increasingtheirbuyerpowertowardsonlinefashion

retailers.Bjordalpointsthisout:“Theyareextremelypricesensitiveandextremely

concernedwithdiscountsandsales.Itisalmostabigproblem”(Bjordal,Interview,

Appendix1).

Thebuyersizeofaround6milliononlinefashionconsumersisthedominantfactorthat

weakensbuyerpower,withtheindividualconsumerhavingminimalinfluence.

However,theextremelypricesensitiveIndonesianconsumersandlowswitchingcost

strengthenstheirpower.Overall,thebargainingpowerofbuyerscanbesaidtobe

mediumtohigh.

Threatofsubstituteproductorservice

Therearenosubstituteproductforapparelandfootwear,buttherearealternativesas

towheretheseproductsarebought.Theobvioussubstitutesoffashionretailwebsites

aretraditionalphysicalretailstores.Physicalretailstoressellingclothes,accessories,

andshoesareabigcompetitionforfashionretailwebsites.Asmentioned,most

Indonesianshoppersstillprefertraditionalstoreswheretheycantryonitemsandavoid

shippingfeesandonlinepayment(McKinsey&Company,2013).Switchingfromonline

tophysicalshoppingrequiresnocost.Switchingcostsmay,however,occurwhen

switchingfromaphysicalstoretowebshopping.Thecustomermayfaceacost,before

allelse,ofgettingaccesstoacomputer,tablet,orsmartphonetobeabletoshoponline.

38

AssumingthatthecustomeralreadyhasInternetaccess,theywillmostlikelyalso

encounterswitchingcostsintermsofshippingfees.Insomecases,thesecostsare

limitedorevenremoved,buttheIndonesianconsumerperceptionseems,nonetheless,

tobethatonlineshoppingentailsshippingfees(StatistaDossier,2016).Traditional

physicalstoresarethusahugecompetitivesubstituteforonlinefashionstores.

Ontheotherhand,therearesomeadvantagesofonlineshoppingrelativetotraditional

shopping.Onlinestoresusuallyhaveagreatersupplyoffashion,givingthecustomers

plentyofoptionsfrommanydifferentbrandsthatmightnotbeavailableforpurchasein

physicalstores.ThisisespeciallyapparentinIndonesiawherethereisabiggapof

missingsupplyforaffordablehighstreetfashion(RocketInternet,2014).Theeaseof

onlineshoppingisalsowhatmightdrawcustomers.InIndonesia,andmaybeespecially

inJakarta,trafficisroughandtransportingyourselftoastoreoramalltoshoptakes

time.Goingonlineandgettingtheitemsyoupurchasesentdirectlytoyourdoor,ora

nearbypostaloffice,willcertainlyeasetheshoppingexperience(SingaporePost,2014).

ThethreattothislineofthoughtisthatIndonesiansarenotyetusedtoonlineshopping,

andthatmallsareconsideredameetingplaceforfriends.Shoppingatmallsisseenasa

weekendactivity.Thisisabigthreatforonlineretailersandatrendtheywillhavetotry

andchange(Bjordal,Interview,Appendix1).

Eventhoughthereareprosandconstoonlineshopping,Indonesiancustomersstill

dwellalotonthecons,makingthethreatofphysicalstoresveryhigh.AstheIndonesian

consumerdevelops,wemightseeacustomerbasemorepronetoonlineshopping,but

theoptionofphysicalstoreswillalwaysbeasubstitutionthreat,atleastintheveryfar

future.

Bargainingpowerofsuppliers

Toanalyzethebargainingpowerofsuppliersintheonlinefashionretailindustry,one

willfirsthavetodefinewhothemainsuppliersare.Intheonlinefashionretailindustry

inIndonesia,therearefourmainsuppliergroups.Theyarethesuppliersoftheweb

shop’sproducts:clothing,accessoriesandshoes,thesuppliersoflogisticsservices,the

suppliersofpaymentsolutions,andthesuppliersofadvertisementplatformssuchas

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GoogleandFacebook.

Thereareusuallymanydifferentsuppliersprovidingfashionwebshopswiththeir

products.Thesecanbebothinternationalandlocalbrands,andinsomecases,likewith

Zalora,thewebshophastheirownbrandproductsdirectlysuppliedfrom

manufacturers(RocketInternet,2014).Thenumberofsupplierswillvaryacross

differentonlineshopsandtheirsize,butifonelooksatZalorainIndonesia,theyprovide

around500brandstotheircustomers,makingtheirgroupoffashionsuppliersvery

large(Zalora,2016a).WhenZalorafirststarted,thebrandsuppliershadatough

bargainingpower.Ase-commerceinIndonesiagrowsandZalorabecomesmore

popular,however,theirbargainingpowerlessens,asZalorabecomesamoreimportant

client(Bjordal,Interview,Appendix1).Thesuppliersbargainingpoweristhusnot

identicalovertheIndonesianonlinefashionretailers.Thebiggerandmorepopularthe

retaileris,thelesserthebargainingpowerofbrands.Someofthesuppliersmightbe

moreimportantfortheonlinestoreaswell,forexampleiftheyareextrapopularwith

thecustomersoriftheyactasthemanufacturerofthewebsite’sownlabel.“Especially

brandslikeNike,Adidas,Mango,NewLook,Factory,andallthebiginternationalbrands

haveanimmensepower,theyarehardertocrack”(Bjordal,Interview,Appendix1).

Thesesupplierswillthusbehardertoreplaceandhavealargerbargainingpower.The

poweroftheindividualproductsupplierwillthusvaryfromweaktostrongintermsof

theirimportancetotheonlinestore,dependingontheirownsize,andifthewebsite

carriesalargeassortmentofbrands.

ThesuppliersoflogisticsservicesintheIndonesianonlinefashionretailmarketcanbe

bothstate-ownedandprivatecompanies.Thesecompaniesaremanagingdelivery

transportationinacountrywithdifficultdemographics,withits17,000islandsand

underdevelopedinfrastructure.Thereareseveraltransportationcompaniesavailableto

onlinestores,butonlinestoresusuallyneedmorethanonetocatertodifferentpartsof

thecountryandtodifferentneeds(E27,2015).ThiswasalsothesituationforZalora

Indonesiabeforetheyincreasedtheirinvestmentsinoperations:“Wehave,becausewe

didnotwanttobetoodependentonthem[Logisticscompanies],scaledupourown

operationsorganization,simplybecausetheyhadtoomuchpowerandinadequateskillsin

40

e-commerce…theycoulddemandveryhighpricessincewedidnothavethatmany

alternatives”(Bjordal,Interview,Appendix1).Thisstatementshowsthatthebargaining

poweroflogisticssuppliersishigh.

Switchingfromonelogisticscompanytoanotherdoesnotentailanycostsortimeliness

unlessthereisacontractinvolved,inwhichtheprobabilityishigh.Thebargaining

poweroflogisticsprovidersisrelativelyhighbasedonthedifficultiesoffindingsuitable

supplierswithstrongcapabilities.Thebargainingpowerwill,however,bereducedifthe

onlineretailermanagestheirown,orpartsoftheirowndelivery.

E-commercewebsitesneedtoprovideforamethodofonlinepayment.Eventhough

cashondelivery(COD)isverypopularinIndonesia,onlinepaymentisgettingmoreand

morerecognition(McKinsey&Company,2013),andneedstobeavailableinanonline

store.Differentplayershavecreatede-moneyservicestoaccompanythisneedfor

onlinepaymentmethods,alsoforthosewithoutcreditcards.Thereare20companies

thathaveobtainede-moneylicensesfromBankIndonesia,butonlyafewhavegained

tractioninthemarket.ThebigthreesuccessfulareMandiri’se-cash,BCA’sSakuku,and

Dokuwallet(MacquarieResearch,2016).Basedonthis,thereisawideselectionof

onlinepaymentproviders,butwithavarietyofquality.Switchingcostscanbe

interpretedinthesamewayasforpackagedeliverysuppliers;theyonlyexistifthere

arecontractsinvolvedthatarehardorcostlytobreak.Asitisessentialthattheonline

paymentprovideristrustworthy,atleastforaseriousonlineretailer,thepowerofthe

supplierisrelativelyhighbasedonthenumberofqualitysuppliersinthemarket.

SuppliersofadvertisementplatformsinIndonesiaaretypicallyGoogleandFacebook

(Bjordal,Interview,Appendix1).ItwillalsobeassumedthatotherIndonesianonline

retailersuseGoogleandFacebookformarketingpurposes.Thesecompaniesarehuge,

andascustomers,Indonesianonlinefashionretailersonlystandforatinyamountof

theirrevenue.TherearefewothersimilarplatformsthatcansubstituteGoogleand

Facebookwhenitcomestoreachingalargecustomerbase,anditisextremely

importantforonlineretailerstobepresenthere.ThetopthreesitesinIndonesiaarein

additionFacebook.com,Google.com,andGoogle.co.id,Indonesia’slocalizedGooglesite

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(SimilarWeb,2016),increasingtheirsignificanceasplatformsforadvertisement.Their

bargainingpowerisstrongbecauseoftheneedforonlineretailerstobevisiblehere,as

wellasIndonesianonlinefashionretailersaresuchsmallcustomersforGoogleand

Facebook.

Rivalryamongexistingcompetitors

Thebiggestfactorindeterminingthecurrentcompetitionwithintheonlinefashion

retailindustryinIndonesiaisthenumberofactors.Asof2014,therewereninetop

onlinefashionsitesofferinganentirerangeoffashionlocatedinIndonesia:Zalora,

Berrybenka,VIPPlaza,Mikimilo,Maskoolin,ETCLO,HijUp,BelowCepek,andPinkEmma

(TechinAsia,2015d).However,oneplayerisconsiderablylargerthantheothers,even

comparedtothesecondlargestonlineretailerthatonlyoperateswithinfashion,

Berrybenka.Zalora,thelargestplayer,quicklytookBerrybenka’spositioninthemarket

asleaderswhentheyenteredIndonesia.Now,theyareapproximatelyfourtimesbigger

thanthem.Generally,competitionisquitetoughandin2015itexplodedwithnew

entrants.Newcompetitorsarecomingeveryweek,buttheyareusuallytryingtotake

thewholee-commercepie,andarenotfocusedononesegmentorproductgroup,such

asfashioninparticular(Bjordal,Interview,Appendix1).

Whenitcomestoonlineshopping,however,competitionisnotlimitedwithincountry

boundaries.Indonesiancustomerscanpurchaseproductsfrominternationalsitesas

well,eventhoughtheydonothaveacountryspecificwebsite,aslongasthewebshop

candelivertoIndonesia.Theseonlinefashionsitesincludebignames,suchasAsosand

Net-A-Porter(Net-A-Porter,2016)(Asos,2016).However,Bjordalclaimsthattheyare

notyetbigcompetitorsinIndonesiaastheydonothavealocalizedwebsiteorlocal

marketing(Bjordal,Interview,Appendix1).Thebiggestplayersintheonlinefashion

retailmarketarethustheonesthatarelocatedinIndonesia.

Competitionisnotlimitedtoonlineretailersonlyconcernedwithfashion.Manyonline

retailersinIndonesiathatsellalmosteverythingalsosellfashion,thusposingas

competitorsintheonlinefashionmarketaswell.Bjordalunderpinsthis:“Youreally

cannotsaythatLazadaisnotabigcompetitor,becausetheysellfashionclothing,andthey

42

arethebiggestinIndonesiainsalesofeverythingonline.Iwouldsaythattheyhavethe

biggestmarketshareinonlinefashionafterus”(Bjordal,Interview,Appendix1).The

numberofcompetitorsisthushighwhenincludingtheonlineretailerswhosellmore

thanjustfashion

Therivalryinthemarketisalsoinfluencedbytheswitchingcostsanddifferentiation

amongstcompetitors.Thelevelofswitchingcostshasalreadybeenassumedrelatively

lowundertheanalysisofthebargainingpowerofbuyers,increasingtherivalrybetween

competitors.Thediversityinthemarketisnotespeciallygreatamongthemajorityof

players,butwithsomeplayersstandingoutwithbetterassortmentsoffashionbrands,

especiallyreferringtoZalora(Bjordal,Interview,Appendix1).

Costandtimelinessofexitingthemarketalsoaffectsrivalrywithinthemarket.Itisnot

consideredgreat,butdependsonthelevelofinventorykept.Itdependsonwhattheir

strategyistowardstheuseofdirectpurchase,consignment,andmarketplaceandthe

balancebetweenthese.Thedifferenceoftheserestsonthelevelofrisk,wheredirect

purchaseistheriskiestandmarketplaceisriskfree.Directpurchaseentailsbuyingthe

productsandgettingtheminstock,whileconsignmentmeansthatthesupplierstill

ownstheproducts,buttheproductsarestockedinyourwarehouse.Marketplaceisa

formofretailwherethefashionwebsiteonlyofferstheplatformforsales,notowningor

stockinganyoftheproducts.Theprofitmarginsfromdirectpurchaseandconsignment

is,however,largerthanformarketplace,thusexplainingthereasonsfortheuseofthese

comparedtomarketplace(Bjordal,Interview,Appendix1).Ahigherlevelofdirect

purchasecomparedtomarketplacewillthusincreasethecostandtimelinessofexiting

themarket.Theoverallexitcostsisconsideredrelativelylow,thusincreasingtherivalry

ofexistingcompetitors.

TherivalryamongexistingcompetitorsintheonlinefashionretailmarketinIndonesia

isheightenedbecauseofitsmanycompetitors,aswellasnewplayersareenteringata

highpace.Theexistenceoflargeactorswithhighmarketshares,takingupmostofthe

market,leadstounevencompetition.Astheindustryhasalargenumberofcompetitors

,aswellaslowswitchingcosts,littledifferentiation,andrelativelylowexitbarriers,the

43

rivalryamongexistingcompetitorscanbecharacterizedashigh.

SummaryofPorter’sfiveforces

ThehugepotentialintheIndonesianonlinefashionretailmarket,alongwiththeeaseof

startingupanewfashionretailwebsite,causeforahighthreatofnewentrants.The

bargainingpowerofbuyersisdecreasedbasedonthelargegroupofbuyers,while

heightened,however,asthebuyersareverypricesensitiveandswitchingcostscanbe

saidtobenon-existing.Thethreatofasubstituteshoppingplatformforfashionis

extremelyhigh,astraditionalphysicalstoresstillarethemostpopularwayofshopping.

Onlinestorescan,however,differentiatethemselvesfromofflinestoresbyofferinga

largerassortmentandbrandsnotavailableelsewhere.

Therearefourmainsupplierstotheonlinefashionretailindustry:thesuppliersof

productssold,logisticsproviders,suppliersofonlinepaymentsolutions,and

advertisementplatforms.Thebrandssupplyingonlineretailerswithclotheshave

differentlevelsofpowerastohowimportanttheyarefortheretailer,somehavinga

highbargainingpowerandsomehavingarelativelylowpower.Thelogisticscompanies

inIndonesiahavearelativelyhighbargainingpoweroveronlinefashionretailersbased

onthefactthattheoptionsarelimited.Thiswill,however,varyintermsoftheonline

retailer’sownresourceswithindelivery.Therearenotthatmanyprovidersofonline

paymentsolutionseither,especiallyifonecountsthesuccessfulandtrustworthyones.

Thismakesthebargainingpowerofsuppliersofonlinepaymentsolutionsrelatively

high.Thebargainingpowerofadvertisementplatforms,suchasFacebookandGoogleis

veryhighbasedontheirirreplaceablenature.Overall,thebargainingpowerofsuppliers

ishigh,butdependsontheonlinefashionretailers’sizeandimportancetothesuppliers’

business.

TherivalryamongexistingcompetitorsintheonlinefashionretailindustryinIndonesia

ishighbasedonthelargeextentofcompetitors,whichisincreasingatahighpace.The

productsofferedarenotespeciallydifferentiatedeither,increasingtherivalryeven

more.However,someplayershavemanagedtodifferentiatethemselvesinawayby

growingsobigthattheirassortmentoffashionoutperformsthecompetitors’.

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5.1.2Internalanalysis

Aninternalanalysistypicallylooksatkeyperformanceindicators(KPIs)forthe

company,suchassalesnumbers,returnoninvestments(ROI),andothernumbersand

ratesindicatingthecompany’sperformance(Chaffey,2013).InthecaseofZalora

Indonesia,accesstorelevantKPIsisnotobtainable.OnlyafewKPIsfortheZaloragroup

from2014isaccessible,whichisnotrelevantforthepurposeofthisanalysis.The

internalanalysiswillthusnotbeconcernedwithKPIanalysis,butincludeanOLI

analysisandaVRIOresourceanalysis.

5.1.2.1OLIanalysis

Dunning’s(1995,1998)OLIparadigmcanexplainanorganization’spotentialforgrowth

andmodeofentrybasedonownership(O),location(L)andinternalization(I)

advantages.Thisparadigmcanthushelpexplainthegrowthofe-commercefirmsin

emergingmarkets(AgarwalandWu,2015).Ownershipspecificadvantagesarethe

resourcesandcapabilitiesthatthecompanyhaspriortotheentranceintoanew

country,whilelocationspecificadvantagesarethebenefitsofthecountryinquestion.

Theinternalizationspecificadvantagesrelatetowhythecompanyshouldexploittheir

ownershipspecificadvantagesinternallyratherthanacquireand/orselltheirrights

(Dunning,2001).ThisanalysiswillseektoexplainZalora’sownership,locationand

internalizationspecificadvantagesinIndonesia.Itwillgiveanexplanationastohow

ZaloramanagedtogainsuchastrongfootholdintheIndonesianonlinefashionretail

market,andanalyzesomeofthecompany’sstrengths.

Ownershipspecificadvantages

Asmentioned,ZaloraisownedbytheGermanInternetplatformnetworkRocket

Internetwhoownscompaniesin110countries(RocketInternet,2014).Theadvantage

ofthisisthatRocketInternetholdscompetenciesandexperiencefromstartingsimilar

companiesinotherpartsoftheworldthatZaloraIndonesiacanbenefit.Theirfinancial

resourcesarealsoahugeresourceforZalorawhogainacompetitiveadvantageover

otherlessfinanciallystrongcompetitors.RocketInternethasenormouscompetenciesin

whatworksandwhatdoesnotworkindifferentmarkets.Zaloraalsousealotofthe

systemsdevelopedbyRocketInternetforothercompanies,whichmeansthattheydo

45

nothavetostartfromscratchbuildingtheirownsystemslikeothercompetitors.Rocket

InternetisnotasinvolvedinZaloraIndonesia’sbusinessnowastheywerebefore,but

stillsharesinformationlikebestpracticesandbenchmarks.(Bjordal,Interview,

Appendix1).

ZaloraisalsopartofagroupdevelopedbyRocketInternet,calledtheGlobalFashion

Group,consistingoffiveleadingemergingmarketfashione-commercecompanies:Dafiti

inLatinAmerica,LamodainRussia,JabonginIndia,NamshiintheMiddleEast,aswell

asZalorainSoutheastAsiaandAustralia(RocketInternet,2014).Asmentionedinthe

introduction,RocketInternetandKinnevikarethetwobiggestinvestors.Thisgroup

shareslessonslearnedfromfailandsuccessstories.Zalora’sparticipationintheGlobal

FashionGroupgivesthemaforumwheretheycandiscussproblemsandtakeadvantage

ofeachother’sdevelopment.Noothercompanyintheonlinefashionretailindustryin

Indonesiahasthiskindofnetwork,makingitacompetitiveadvantageforZalora


BjordalpointsoutRocketInternet’scompetenceanddevelopedsystemsasthekey

ownershipspecificadvantagesforZalorainIndonesia.Thefinancialbackingandsafety

providedbysuchastrongparentcompanylikeRocketInternethassurelyalsobeena

bighelpforZalora.TheGlobalFashionGroupisalsoahugeadvantagethatcan

contributetofastergrowthastheymaybeabletoavoidpitfallsbasedonother

members’pastexperiences.Zalorathereforehaveagreatownershipspecificadvantage

inthebackingoftheirparentcompanyRocketInternetandtheGlobalFashionGroup.

Locationspecificadvantages

Indonesiaasalocationforonlinefashionretailisnotnecessarilyobvious,buthasalot

ofpotential.Withapopulationof260millionpeople(Worldometers,2016),88.1million

Internetusers,andaround15milliononlineshoppers,whereabout6millionpurchase

fashiononline,thepotentialcustomerbaseishuge(Statistadossier,2016).Asthe

growthrateofonlineretailsalesfurtherisestimatedtoliearound60percent

(MacquarieResearch,2016),Indonesiacanbeviewedasanupandcominge-commerce

market.Bjordalalsoagreeswiththis:“PeopleunderstoodthatwhentheInternetfirst

46

arrived,itwascompletelygoingtotakeoff,soIndonesiawasseenasanimportantmarket

fromdayone.AstheInternetpenetrationhasgrownandwehavegottenmoreattentionas

acompany,wehavebecomemoreandmoreimportantforthegroup,andwearenow

clearlythebiggest”(Bjordal,Interview,Appendix1).TheIndonesiane-commerce

potentialanditshugepopulationhavethusmadeZaloraIndonesiaespeciallyimportant

forthegroup,givingthemtheopportunitytogrow.

CheaplaborisalsoafactorthatmakesIndonesiaadesiredforeigninvestmentlocation

forZalora(IndonesiaInvestments,2016c).TheminimumwageinJakartaisaround130

to140Eurospermonth,accordingtoBjordal.Thisisaboutthreetimeshigherthan

othercitiesinIndonesia,makingJakartarelativelyexpensiveincomparison.Onecould

thusconsidermovingpartsoftheorganizationtootherplaces,butthiswillnotbe

happening,asitishardertoattracttalentsoutsideofJakarta,aswellasJakartaand

Jabodetabek(greaterJakarta),amountsforthelargestshareofthemarket(Bjordal,

Interview,Appendix1).AlthoughJakartaismoreexpensivethanotherIndonesiancities,

wagesherearestilllowandZaloraIndonesiaenjoythelocationadvantageoflowlabor

costs.

Intermsoftaxation,Indonesiadoesnotserveanyadvantages.Taxesonimportsand

incomearehigh,whichisproblematicforZaloraastheyimportmanyoftheirproducts

fromabroad.Forexpatsandotheremployees,thehightaxesonincomeistroublesome,

andothercountriesmayseemmoreattractiveintermsofsalary,asforexample

Singaporewiththeirrelativelylowertaxes(Bjordal,Interview,Appendix1).Thismight

makeithardertoattractinternationalemployees.Thefactthattaxesarehighin

Indonesia,buttheystillwanttostartupinthecountrymustmeanthattheother

locationspecificadvantagesaresostrongtheyoutrulethedisadvantageofhightaxes.

ThelocationspecificadvantagesforonlinefashionretailerZalorainIndonesiacanthus

qualifyasstrong.

Internalizationspecificadvantages

Theadvantagesofsettingupalocalsiteandhavingalocalteam,comparedtosellingto

Indonesiafromaninternationalwebsiteusingnon-Indonesianworkers,aregreat.Local

47

presenceisveryimportantinIndonesia,andBjordalexplainswhy:“Thedifferences

betweenthemarketsaresobig.ThedifferenceswithinSoutheastAsiaareevenhuge.We

wouldneverbewherewearetodayifwedidnothaveanIndonesianwebsitewithboththe

locallanguageandwithallthelocalbrands”(Bjordal,Interview,Appendix1).The

advantagesofinternalizationarethusgreatandimportantforthesuccessofZalora

Indonesia.

ThefactthatZalorahasitsownteamonthegroundinIndonesiaalsomakesiteasierfor

themtoconnectwithlocalcustomersthroughmarketing.Internalizationisespecially

important,asIndonesiansareverycommittedtolocalbrandsandproducts(Macquarie

Research,2016).HavingalocalpresenceenablesZalora’sPRintermsoflocalevents

andfashionshows,whicharealsosharedonsocialmedia.Italsoenablespartnerships

withbigphonecompanieswhohelpwithmarketingthroughsendingoutSMSs,e-mail

andothertypesofcommunicationaboutZaloratotheircustomers(Bjordal,Interview,

Appendix1).

ThecaseforinternalizationisstrongasZaloraIndonesiawouldnotbewheretheyare

todayifitwasnotforthelocalizationoftheirwebsiteandteam.Theopportunitiesfor

ZaloraIndonesiaarethusgreaterwithaninternalizationstrategyratherthanwith

sellingfromanon-localizedwebsitewithinternationalemployees.

SummaryoftheOLIanalysis

AlotoffactorsarebeneficialforZalora’spresenceintheIndonesianmarket.Theyhave

ownershipspecificadvantagesintermsofthecompetenceandsystemsprovidedby

theirparentcompany,RocketInternetandtheirparticipationintheGlobalFashion

Group.IndonesiaisalsoanexcitinglocationforZalorabecauseofitslargepopulation,

increasingInternetaccess,andlowlaborcost,whilehightaxesonincomeandimport

somewhatdecreasethelocalizationbenefit.ForZaloratobeabletotakeadvantageof

theirownershipandlocationspecificadvantages,thekeyistointernalizeoperations.

Havingalocalizedwebsiteandlocalemployeesenableacloserbondtocustomersas

wellasevents,marketingandpartnershipsthatwouldnotbepossiblewithoutlocal

presence.

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5.1.2.2VRIOanalysis

TheVRIOframeworkexplainshowacompanyresourcecanactasasustainable

competitiveadvantage.Resourcesaredefinedasallassets,capabilities,organizational

processes,firmattributes,information,knowledge,etc.controlledbyacompanythat

enablethemtocreateandimplementstrategiesthatcanimprovetheirefficiencyand

effectiveness(Daft,1983).Tohaveapotentialofcontributingtoasustainable

competitiveadvantage,thecompanyresourcemusthavefourattributes:itmustbe

valuable,rare,inimitable,andthecompanymustbeorganizedtosupportthe

exploitationofitsresource(BarneyandHesterly,2010).Thisanalysiswillthusidentify

ZaloraIndonesia’sresourcesandcontemplatewhethertheycreateasustainable

competitiveadvantageornot.TheVRIOframeworkischosenbasedonitsmissionto

determinewhatthecompanyisalreadytakingadvantageof,butalsothepotentialfor

improvement,whichisusefulforafurtherstrategyimplementation.Anotherinternal

analysis,suchasthePorter’svaluechainanalysis(Porter,1985),isnotapplied,asit

goesdeepintothespecificareasofthevaluechain,whichisnotpurposefulforthis

paper.Itwouldalsoinmanywaysleadtorepetitionofalreadydiscussedmaterial.

Companyresources

ToidentifythedifferentresourcesofimportanceforZaloraIndonesia,Ihaveconsulted

withtheirmarketingdirector,JoBjordal,anddeterminedfivekeyattributes.Company

attributescan,however,onlybeconsideredresourcesiftheyarevaluabletothe

company,thatbeingwhentheyexploitopportunitiesorneutralizethreats,andimprove

thecompany’sefficiencyandeffectiveness(Barney,1991).

WebsitedesignanduserfriendlinessisanimportantcompanyattributeforZalora

Indonesia.Itcaninspirecustomerstovisitotherpagesonthesite,whicheventuallycan

leadtoapurchase.Thewebsite’sdesignisthusavaluableassetforZalora,andcanbe

characterizedasaresource.

TheZalorabrandiswellknowninIndonesia,asthebiggestonlineretailerforfashion.

Zalorastrengthensitsbrand’strustworthinessbynotsellinganythingbutauthentic,real

products,whereasmanyoftheircompetitorsdonothavethisfocusandsellunauthentic

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products.Theirmarketingandbrandpositioningstrategyisalsogood,intermsofthe

diversityinplatformsandthusagreaterbrandvisibility(Bjordal,Interview,Appendix

1).TheirbrandisthereforearesourceasitcreatesvalueforZaloraintermsofcustomer

satisfactionandloyalty.Beingarecognizedbrandhelpswithgainingnewcustomersand

exploitingthegrowingopportunitiesinthemarket,thusimprovingthecompany’s

effectiveness.

ZaloraIndonesiahasalsobuiltanoperationsorganizationforinternaluse.Thiseases

thedependencyonexternallogisticsorganizations,andenableZaloratodeliver

packagestotheircustomerswithcareandefficiency.Thelogisticscapacityfore-

commerceisslim,anddoesnotfollowthegrowthrateinthee-commerceindustry,thus

makingtheiroperationsorganizationnecessaryforincreasedefficiencyand

effectiveness.Itenablesthecompanytodeliverdirectlytothecustomerandgettingthe

packagetherefasterthanothers(Bjordal,Interview,Appendix1).Thiswillalsohavean

impactoncustomersatisfaction,andcanthusbecharacterizedasavaluableresource.

Zaloraalsocarryitsownprivatelabel.Severalothercompaniesdothesame,but

Bjordal’sopinionisthattheydonothavethesamesuccess.Bjordalexplainswhytheir

privatelabelisagreatattribute:“Approximately30percentofwhatwesellisprivate

label,andwehavemuchhighermarginsthereofcourse,andthequalityismuchhigher

thanwhatyoucanbuyinIndonesia.Wecanalsodesigntofillagapintheproduct

assortmentthatwecannotfindthroughlocalorinternationalbrands…Ithasworkedwell

anditishardtoreplicate”(Bjordal,Interview,Appendix1).Theirprivatelabelthustake

advantageofanopportunityinthemarketthatisnotyetfulfilledbyotherbrands,giving

thecustomersawiderassortmenttochoosefrom.As30percentofwhatZalora

Indonesiasellsontheirsiteisprivatelabel,onecandefinitelysaythatithasbeen

successfulandcanqualifyasavaluableresource.

Bjordalalsomentionstheirsearchengineoptimization(SEO)strategyasanimportant

resource.TheyhavefocusedonSEOfromdayone,withtheirownteamworkingonly

withthis,andhavenowbuiltastrongSEO(Bjordal,Interview,Appendix1).Well

developedSEOhelpattractcustomersandworkasaneffectivemarketingtool.Their

50

well-establishedSEOisthusavaluableresourcethatZalorautilizeandbenefitfrom,

givingthemaleadonmostoftheircompetition.Thisdecreasesthethreatofcompetition

andmakesmarketingmoreeffectiveandefficient.However,whenitcomestoother

typesofcontentmarketing,Bjordalsaysthattheyhavealongwaytogo.Content

marketinghasnotbeentheirmainfocusbecauseothertypesofmarketing,suchaspaid

marketing,isbetterforfastgrowth,whichiscurrentlyofimportancetoreach

profitability(Bjordal,Interview,Appendix1).

FivekeyresourcesarethusidentifiedforZaloraIndonesia,withallbeingvaluablefor

thecompany.Thesearethecompany’swebsitedesign,brand,operationsorganization,

privatelabel,andSEO.Thesefiveresourceswillbeanalyzedtoseeiftheycanactasa

competitiveadvantageorasustainablecompetitiveadvantage,usingtheVRIO

framework.Astheyareallcharacterizedasvaluable,thefurtheranalysiswillexplore

theirpossibilityofbeingrare,imperfectlyimitable,andifZaloraIndonesiaisorganized

wellenoughtotakeadvantageoftheresource.Iftheycheckoffallthesepoints,theycan

beconsideredresourcesthatgiveZaloraIndonesiaasustainablecompetitiveadvantage

(BarneyandHesterly,2010).

Websitedesign

Atafirstlook,theZaloraIndonesiawebsitelooksquitesimilartootheronlineretail

sitesinIndonesia,andalsoinEurope,andisthusnotrare.Imitatingadesignisnot

especiallyhardeither,andZaloraIndonesia’swebsitedesignisthereforenotinimitable.

TheWebsitedesigncanstillactasacompetitiveadvantageiftheresourceiswell

organizedbythecompany.However,MacquarieResearch’s(2016)reportstatesthat

ZaloraIndonesiahasabouncerateof71percent,whichmakesituncertainwhetherthe

companyisorganizedproperlytotakeadvantageofthisresource.Bounceratesisthe

amountofpeople,inpercentage,thatvisitthesiteandleaveswithoutbrowsingother

pagesonthewebsite(Googleanalytics,2016).ZaloraIndonesia’smarketingdirector

mentionsthatreportednumbersmightnotalwaysbereliable.Healsosaysthatthis

mighthavesomethingtodowithbadinternetconnectionandtrafficdrivenby

marketingattemptslikee-mailspam,SEOorsimilar.Althoughthismightbethecase,it

isinterestingtofurtherlookat,andinthiscaseIwillassumethatZaloraIndonesiaisnot

51

organizedproperlytotakeadvantageofthisvaluableresource.Thecompany’swebsite

designdoesthereforenotcurrentlyserveasacompetitiveadvantage.

Brand

Zalora’sbrandrecognitionisstronginIndonesiaastheyarethebyfarbiggest

specializedonlinefashionretailerinthecountry,with10millionmonthlyvisits,

comparedtothesecondlargest510thousandmonthlyvisits(MacquarieResearch,

2016).AfewotherplayerscancomparethemselveswithZalorawhenitcomestohaving

arecognizedbrand,suchasLazada,butmostoftheothercompetitorsdonothavea

widelyrecognizedbrandasZalora(Bjordal,Interview,Appendix1).Zaloraalsohavea

differentbrandstrategythanmostothercompaniesinthesameindustry,astheyare

focusingonsellingreal,qualityproducts,makingtheirbrandmoretrustworthythan

others.Thisresourceisthusalsorare.

Zalora’sbrandhasbeenbuiltupovertimesinceitslaunch,andisalsorecognizedacross

borders.Itwillthustakealongtimeforothercompetitorstoreachthesamelevelof

brandrecognition,especiallyasZaloraisstillgrowing.Thisisnotaresourcethatcanbe

boughteither.Eventhoughitisnotentirelyimpossibleforothercompaniestobuilda

similarstrongbrand,Zalorahassuchalargeheadstartandstrongfinancialbackingasa

specializedonlinefashionretailerthattheirbrandcanbethoughtofashardtoimitate.

ZaloraIndonesiaisalsotakingadvantageoftheirbrandname,organizingitsmarketing

strategiesthereafterbysettingupeventsandfashionshowsthatwouldnothavebeen

possiblewithoutastrongbrand.ZaloraIndonesiaisthusorganizedproperlytousetheir

brandforwhatitisworth.ThisresourcecanthereforegiveZaloraIndonesiaa

sustainablecompetitiveadvantage,asitisvaluable,rare,inimitable,andorganized.

Operationsorganization

Aprivateoperationsorganizationiscostlyandtimelytobuild,andonlyZaloraand

Lazadahaveoneintheindustry.Zalora’sevenhaveagreatercoveragethanLazada’s

(Bjordal,Interview,Appendix1).Thisresourceisthusrare.Eventhoughbuildingawell-

establishedoperationsorganizationiscostlyandtakesalongtimetodevelop,itisnot

impossibletoimitate.Zaloraisdefinitelytakingadvantageofthisresource,usingitasa

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benefittobemoreefficientandtobettercustomersatisfaction.Theresourceisthus

organized.Theoperationsorganizationcangivethecompanyacompetitiveadvantage,

butnotasustainedone,asitisnotimperfectlyimitable.

Privatelabel

Zalora’sprivatelabelis,asBjordalmentioned,moresuccessfulthanothercompetitors’

privatelabel.However,asmanyothersimilarcompaniesareexploitingtheopportunity

ofthefashiongapinIndonesiaexplainedearlier,Zalora’sprivatelabelcannotbe

consideredrare.Asitisnotrare,itisnotinimitableeither,ascompetitorshavealready

imitatedtheresource.AsZaloraiseffectivelyusingtheirprivatelabelasabenefit,and

supposedlybeingmoresuccessfulthanothers,theyareorganizedinawaythatstill

enablestheresourcetogivethecompanyacompetitiveadvantageeventhoughitis

neitherrare,norimperfectlyimitable.Itcannot,however,giveZaloraasustained

competitiveadvantage.

SEO

ZaloraIndonesiahassincethebeginningworkedondevelopingastrongSEOand

BjordalsaysthatonlyZaloraandLazadahaveawell-developedSEOstrategyin

Indonesia(Bjordal,Interview,Appendix1).Thisthusmakestheresourcerare.Ifone

assumesthatZaloraIndonesiawillcontinuetheirSEOdevelopmentatthesamepace

andquality,itwillbeclosetoimpossibleforothercompaniestocatchuptotheirlevelof

SEO.However,competitorscansubstitutetheadvantagesofSEObyusingpaidadsand

otherformsofmarketingstrategiesthatenablesthesameresultsasSEO.Zalora

Indonesia’sSEOstrategycanthereforenotbecharacterizedasinimitable.Zalora

Indonesiais,however,veryawareofthisresourceandisorganizedinawaythatusesit

asastrength.Zalora’sSEOthusgivethemacompetitiveadvantage,butnotsustainable,

astheresourceisnotinimitable.

SummaryofVRIOanalysis

Underneathisanoverviewofthefivekeyresourcesandwhethertheyserveasa

competitiveadvantageorasustainablecompetitiveadvantageforZaloraIndonesia.

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Table2:VRIOsummarized

Alloftheresources,exceptforwebsitedesign,givesZaloraIndonesiaacompetitive

advantage,butonlyZalora’sbrandcanofferthemasustainablecompetitiveadvantage

astheresourceisvaluable,rare,inimitable,andorganized.Thisresourceanalysisgives

somesuggestionsastowhataspectsareadvantageousforZaloraIndonesiatoimprove.

5.1.3Subconclusion-SWOT

ASWOTanalysisworksasasub-conclusionfortheentiresituationanalysisasitgathers

theinformationalreadyanalyzedandpresentsitasstrengthsandweaknessesfromthe

internalanalysis,andopportunitiesandthreatsfromtheexternalanalysis(Pahland

Richter,2007).TheSWOTanalysisispresentedbelowinfigure3showingthestrengths,

weaknesses,opportunitiesandthreatsforZaloraintheonlinefashionretailindustryin

Indonesia.

Valuable

Rare

Inimitable

Organized

Competitive-/Sustainable

competitiveadvantage

Websitedesign Yes No No No Notacompetitiveadvantage

Brand Yes Yes Yes Yes Sustainablecompetitiveadvantage

Operationsorganization Yes Yes No Yes Competitiveadvantage

Privatelabel Yes No No Yes Competitiveadvantage

SEO Yes Yes No Yes Competitiveadvantage

54

IntheIndonesianonlinefashionretailmarket,Zalorahasmorestrengthsthan

weaknesses,whichisreasonableintermsoftheirstrongpositioninthemarket,being

thelargestandmostvisitedonlinefashionretailer(MacquarieResearch,2016).They

alsohavemanyvaluableresourcestheytakeadvantageofthatcontributestotheir

growth,butalsoafewweaknessesthatneedstobeaddressed.

ThereareaboutasmanyopportunitiesasthreatsforZaloraintheIndonesianmarket.

Somethreats,asnaturalphenomenonsandanunstableenvironmentisnotsomething

thatZaloracandoanythingabout.Otherthreatsshouldbeminimizedorcounteredto

Strengths• Resourcesfulandcompetentparentcompany• Manylocalemployees • Internalizedbusiness• Strongbrandrecognition• Trustworthybrand• Ownoperationsorganization• Privatelabel• Well-developedSEO• ParticipationintheGlobalFashionGroup• Largestplayerintheindustry• PartnershipwithPosIndonesia• Threeinventorymodelsforriskreduction

Weaknesses• Onlyoneinimitableresource• Highstreetfashionthatonlythetop10%oftherichestinIndonesiacanpurchase• Relativelylittlecontentmarketing• Highbouncerate

Opportunities• Cheaplabor• Astableeconomy• Growingpurchasingpower• Youngpopulation• Nopublicenvironmentalconcern• IncreasingInternetaccessability• Developedmobiletechnology• Fashionbeingthemostpopulartobuyonline• Manypotentialbuyers• impracticalityofofplinestores• e-commerceroadmap• Lowbargainingpoweroflocalbrandsuppliers• Alargenumberofbrandsuppliers• Fewbigcompetitors• Marketingplatformsnotyetexplored

Threats• Hightaxesonincomeandimport• Naturaldestroyingphenomenonslikeheavyrainandearthquakes• Unstablegovernment• Unpredictablelawsandregulations• LowInternetpenetrationrate• Lowincomerates• Religionaffectingbusiness• Lowentrycostsandtimeliness• Manycompetitors• Lowswitchingcosts• Pricesensitiveconsumers• Thepopularityoftraditionalphysicalstores• Skepticismofonlineshopping• Highbargainingpowerofbiginternationalbrandsuppliers• fewtrustworthyonlinepaymentproviders• fewall-roundlogisticssuppliers

Figure9:SWOT,owncreation

55

helpZalora’sgrowthintheIndonesianmarket.However,severaloftheopportunities

alsoconcerntheweaknessesintheIndonesianmarket,asforexamplethelowInternet

penetrationrate,whichisincreasing.Someofthecurrentthreatsarethuspotential

opportunitiesforfuturegrowth.

Zalora’ssituationinIndonesiahasbothaspectsoffosteringandhinderingitsgrowthin

theonlinefashionretailindustry.ZaloraIndonesia’sinternalstrengthsandexternal

opportunitiesareenablersofgrowth,whiletheirinternalweaknessesandexternal

threatsareobstacles.Theseenablersandobstacleswillbetackledinthefollowingparts

touncoverwaystofurtherthegrowthofZaloraIndonesia.

5.2Objectives

Zalora’sgoalfromthebeginninghasbeentogrowatahighpace,astheysawthe

potentialintheIndonesianonlinefashionretailmarketandfigureditwasgoingtoget

competitivefast.Theirlong-termgoalis,however,toestablishthemselvesasmorethan

justanonlineretailer,andtobe“thenumberonego-toplaceforfashionshopping”with

ahighlevelofqualityataffordableprices(Bjordal,Interview,Appendix1).Thee-

marketingplanwillthereforeconsiderwhatZaloraIndonesiaisalreadyproficientat

andtrytofindnewwaysofincreasinggrowththroughe-marketing.Itwillthusshy

awayfromthecurrentfocusonfastpacegrowthanddirectthefocusmoreontolong-

termgrowth.

ZaloraIndonesia’sobjectiveswillbeconsistentwiththe5Ss,presentedbyChaffey

(2013):

Sell–Growsales

Serve–Addvaluethroughcustomerservice

Speak–Getclosertocustomersbycollectingusablecustomerinsight

Save–Savecosts

Sizzle–Addedvaluefromonlinebrandbuilding

AllofthefiveSsareimportant,butforthepurposeofthispaper,andbecauseoftime

andspacerestraint,objectiveswillonlybesetforwhatisassumedtobemostimportant

56

forthefurthergrowthofZaloraIndonesia.AllofthefiveSsarethereforenotincluded.

TheobjectivesshouldalsopreferablybeSMART,whichstandsforspecific,measurable,

actionable,relevant,andtime-related(SmartInsights,2010).

Thedeterminationofobjectivesisbasedonthesituationanalysis.Theyarethuslinked

toIndonesia’suntappedpotentialaswellasZalora’sownpotentialforimprovement.To

helpanswertheresearchquestion,theobjectivesaresettohelpfostergrowththrough

increasingprofitsandacquiringnewcustomers.Theseobjectivesareallshort-term,

meaningtheyshouldbeinitiatedwithinayear.Thechoiceofshort-termobjectivesis

basedontherapidchangesintheIndonesiane-commercemarket,butwillstillsetthe

standardforZalora’slong-termgrowth.ZaloraIndonesia’skeystrategicobjectivesare:

1. Increasethetotalvalueoftotaltransactions(GMV)by65%2. Reducebouncerateby30percentagepointsfrom71to41percent.

3. Increasebrandcredibilityby20%

4. Increasebrandvisibilityby20%

Objective1

IncreasingtheGMVisadirectsalesobjective,entailinganincreaseinproductssoldor

priceperproduct.Thefocusherewillbeonincreasingthenumberofproductssold.

GMVisusedasabenchmarkasZaloraIndonesia’sKPIsfromtheRocketInternet2014

annualreportisbasedonGMVasameasureofrevenue(RocketInternet,2014).The

increaseof65percentinayearisassumedviablebasedonZaloraIndonesia’sheavy

growthprospectsandcomparedtotheGMVgrowthfrom2013to2014of80.3percent

(RocketInternet,2014).TheGMVgrowthobjectiveisalsobasedoffofMacquarie

Research’sforecastofpotentialgrowthinIndonesia’sonlineretailsales,whichliesat65

percentbetween2016and2017.

Objective2

Ahighbouncerateisnotdesirable,andthereasonsbehindneedstobesorted.Basedon

theVRIOanalysis,ZaloraIndonesiaisnotorganizedinawaythatoptimizeswebsite

design,whichcanbeareasonwhythebouncerateissohigh.Comparedtoits

57

competitors,ZaloraIndonesiahasthehighestbouncerate.Areductionof30percentage

pointsishighlyviablewhenlookingatcompetitorslikeBerrybenkaandMAPEMALL

withbounceratesof32and42percentrespectively(MacquarieResearch,2016).

Objective3-4

Keyobjectivethreeandfourarehardertomeasurebutmaybethemostimportantin

termsofacquiringnewcustomers.EventhoughZaloraisthelargestonlineretailer

withinfashioninIndonesia,thereisahugepotentialincustomersthatarenotyet

familiarwiththeZalorabrandoronlineshopping.Increasingbrandcredibilityand

visibilitycanhavetheeffectofanincreasingcustomerbase,aswellasmakingonline

shoppingmorecustomary.

5.3Strategy

Thestrategysummarizeshowtoachievetheobjectivespresentedabove(Chaffey,

2013).Thekeycomponentsofane-marketingstrategywillbeintroducedusingthe

acronymSTOPandSATIS(Chaffey,2013):

• Segments• Targetmarkets• Objectives• Positioning

&• Sequence• Acquisitionversusretention• Tacticaltools• Integration• Socialmedia

Asthise-marketingplanisnotforanewlyfoundedcompany,STOPisalready

establishedbyZaloraIndonesiaandisthusincludedasanintroductiontothestrategy.

Tomakesurethatthetakeawaysfromthesituationanalysisisincorporatedinthe

strategy,IwilluseaTOWsmatrixthatintegratestheSWOTtohelpcreateclear

strategies(SmartInsight,2014).ThepointsofSATISwill,aftertheTOWsmatrix,be

includedtofurtherspecifythedefinedstrategies.

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5.3.1Segmentsandtargetmarket

Segmentsandtargetmarketcanbeviewedtogetherastheygohandinhand.The

Indonesianmarketcanbebrokenupintodifferentsegments.Initially,theonesrelevant

forZaloratotargetaretheyoungerpartofthepopulation,from18to35,astheyalready

takeupthemajorityofthecustomerbase(Bjordal,Interview,Appendix1).AsZalora’s

goalistobecomethefirstplaceonegoestowhenthinkingofonlinefashion,theyalso

targetfashionconsciousconsumerswhoareupdatedonthelatesttrends.

Theseshoppersincludebothimpulsebuyersaswellasself-restrainedbuyers,whotake

alongertimetodecidewhethertobuyornot.EventhoughZalora’scustomersconsistof

amajorityofwomen,Zaloraisnotonlytargetingwomen(Bjordal,Interview,Appendix

1).Asanincentivetoshoponlineisitseaseandstressfreenature,thismightdrawmore

maleshopperswho,withoutgeneralizing,inmanycasesarelessamusedbythephysical

clothingshoppingexperiencethanwomen.Itisthusimportantnottohavean

overwhelmingfeminineexpressiononthewebsite,whichonecanseeonZalora

Indonesia’sentrancepagewithanapproximate50/50shareoffemaleandmalefashion.

ThetargetmarketofZaloraIndonesiaisthusfashionconsciousmenandwomeninthe

agesof18to35whoarebothimpulse-andself-restrainedshoppers.

5.3.2Objectives

Theobjectivesarealreadypresentedaboveanddonotneedtobeexplicitlyrepeated.It

is,however,importanttorememberthatthestrategy’staskistofindwaystoachieve

theobjectives.Theobjectivesarethereforeincorporatedinthestrategy.

5.3.3Positioning

PositioningisaboutfiguringouthowZaloraIndonesiawantstobeperceivedinthe

mindsofthetargetaudience(Chaffey,2013).Zalorasellshighstreetaffordablefashion

directedtoitstargetgroupofyoungfashionconsciouscustomers.Theproductssoldare

clothing,shoes,accessories,andbeautyproductsfrombothinternationalandlocal

Indonesianbrands,andthepricesvarythereafter.Zalorathuswantstobeperceivedas

ayoungandfashionablebrandthatisupdatedonthelatesttrends.Inaddition,itis

importantforZaloratobeperceivedastrustworthyandprofessional(Bjordal,

Interview,Appendix1).

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ZaloraIndonesia’sonlinevalueproposition(OVP)statestheintrinsicbenefitsa

customerwillgetfromthesite,content,webserviceorfunctionality,andhowthatties

totheoverallproductandservice(Chaffey,2013).PromotingitsOVPisimportantto

improvecustomers’perceptionofthebrand.ZaloraIndonesia’sOVPcanbeillustrated

throughthefigurebelow.

Figure10:ZaloraIndonesia'sOVP.Ownillustration

BeyondthepointsintheOVPillustration,ZaloraIndonesia’swebsiteissetupinaway

thatiseasyforcustomerstobrowseandfindwhattheyarelookingfor.ZaloraIndonesia

canbeperceivedasprofessionalandestablisheddespitebeinglocatedinanemerging

market.ZaloraIndonesiathuspositionthemselvesasaseriousandtrustworthywebsite,

aswellasatrendyonlinefashionretailerwhocaresabouttheircustomers.

5.3.4TOWsmatrix

AsaSWOTanalysisisalreadypresentedinthesituationanalysis,thisTOWsmatrixwill

onlyshowthedifferentstrategiesdrawnfromtheSWOTwithoutrepeatingthe

strengths,weaknesses,opportunitiesandthreats.Itpresentsfourdifferentstrategy

groupswithstrategicpointsthatwillbeexplainedfurther.Allofthestrategiesare

clearlylinkedtoboththesituationanalysisandtheobjectives.

browsethroughandshopfromover30,000productsfrom500brands

Freeshipping Payusingcashondelivery,creditcardsonline,debitcardsinATMs,orgiftcards

Freereturnwithin30daysifyoudecideyoudonotwantitafterall

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ZaloraIndonesia Strengths–S Weaknesses-W

Opportunities–O SOstrategiesLeveragestrengthstomaximizeopportunities:" Increasenumberof

productandbrandsoffered

" Increasebasketsizepercustomer

WOstrategiesCounterweaknessesthroughexploitingopportunities:" Increasedfocusoncontent

marketing" Improvewebsite

attractiveness

Threats-T STstrategiesLeveragestrengthstominimizethreats:" Promotecustomers’

incentivetoshopatZaloraIndonesia

" Increasefeedbackfromcustomers

WTstrategiesCounterweaknessesandthreats:" Differentiatepromotion" Onlineshoppinganddelivery

reputationmanagement

Table3:TOWsmatrix

Thesestrategiesaredevelopedtoachievetheobjectivesandcanbelinkedaspresented

below:

Objectives Supportingstrategies

1.Increasethetotalvalueoftotal

transactions(GMV)by65%

" Increasebasketsizeandpercustomer" Increasenumberofproductsand

brandsoffered" Promotecustomers’incentivetoshop

atZaloraIndonesia

2.Reducebouncerateby30percentage

pointsfrom71to41percent.

" Improvewebsiteattractiveness

3.Increasebrandcredibilityby20% " Onlineshoppinganddeliveryreputationmanagement

" Increasenumberofproductandbrandsoffered

" Increasefeedbackfromcustomers

4.Increasebrandvisibilityby20% " Increasedfocusoncontentmarketing" Differentiatepromotion

Table4:Strategiessupportingobjectives

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Someofthestrategiessupportmorethanoneobjective,asseeninthetableabove.To

explainhowthedifferentstrategieswillhelpachievethefourobjectives,anexplanation

ofeachstrategyispresentedbelow.Amoredetailedlookintohowexactlythestrategies

willbeimplementedwillbeintroducesinthetactics.

Increasebasketsizepercustomer

Tomakecustomersbuyalargerquantityofproducts,itwillbebeneficialtoenablemore

impulsepurchases.Ifthecustomerisinitiallyonlylookingforacertainproductbutis

inspiredtobuysomethingelseinaddition,Zalorahasdoneagoodjob.Thisstrategy

thusinvolvesmakingcustomersawareofproductsthattheymightbeinterestedinby

increasingtheinspirationalpostsonthewebsiteandmakingiteasiertobrowsthrough

products.

Increasenumberofproductsandbrandsoffered

Thescopeofthisstrategyspeaksforitself.ToincreaseGMVandcredibility,itis

essentialforZaloraIndonesiatoofferahighvarietyofproductsandbrandsthatinturn

servealargervarietyofconsumers.Moreproductstochoosefromincreasesthe

likelihoodofacustomerfindingsomethingtheywouldliketopurchase,thusincreasing

theGMV.Credibilityisaffectedbythisstrategy,assalesrightsofalargeamountof

knownbrandswillmakeZaloracomeoffasaseriousandtrustworthyplayer.Increasing

itsproductbaseisthusimportantforZaloraIndonesia’sfurthergrowth,maintainingits

positionasthelargestonlinefashionretailerinIndonesia.

Promotecustomers’incentivetoshopatZaloraIndonesia

OneofZaloraIndonesia’sbiggestthreatsistheIndonesians’lovefortraditionalphysical

storesandmalls.Itisthusimportantthatconsumersareawareoftheadvantagesof

shoppingonlineatZalora.ZaloraIndonesiawillhavetopromotethebenefitstheyoffer,

suchasnextdaydelivery,freereturns,alargerangeofbrands,aswellasthepromiseof

neversellingfakeproducts.Thisstrategyisconcernedwiththecomparisonto

competitorsandopeningthemindsofpotentialcustomerstoZalora.Thegoalisto

increaseZalora’scustomerbaseandthusthetotalvalueoftotaltransactions.

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Improvewebsiteattractiveness

Thisstrategyisdirectlyconcernedwithattractingcustomerstobrowsethroughmore

thanjusttheentrancepage,thusreducingthebouncerate.Therearemanyconstraints

orchallengeswhenitcomestositedesign:modemsanddownloadingtime,screen

resolution,numberofcolors,browsers,plug-insanddownloadtime,fontsizes,and

platforms(Chaffey,2013).Asthereasonforthehighbouncerateisnotknown,

assumptionswillbemadeastowhattheproblemareasareandhowitcanbefixed.

BecausetheInternetconnectioninIndonesiaisnotasgreatasinEuropeforexample,

modemsanddownloadingtimeisahighlypossibleissuewhenitcomestothewebsite

attractiveness.Thefour-secondruleofthumbshowsthatthemajorityofvisitorswillnot

waitforthesitetodownloadifittakeslongerthanthis(Chaffey,2013).Thismaybea

problemwithZaloraIndonesia’swebsite,asthegraphicsshouldbeoptimizedtofitthe

localInternetconnectionquality.

TheotherconstraintsassociatedwithunderdevelopedInternetconnectionand

technologyinIndonesiaarescreenresolutionandnumberofcolors,wherethe

differencesintheusers’computerswillaffectthewebsiteexperience.Asthesmart

phonepenetrationinIndonesiaisalmostashighastheInternetpenetration(Macquarie

Research,2016),Zalorashouldalsobefocusedondeliveringagreatwebsitedesignon

theirmobileplatform.Improvingthesedesignchallengesmightbeawayofattracting

visitorstobrowseotherpagesonthesite,andachievetheobjectiveofreducingZalora

Indonesia’sbouncerate.

Onlineshoppinganddeliveryreputationmanagement

Thisstrategycloselyrelatestopromotingcustomers’incentivetoshopatZalora

Indonesia.AswellaspromotingthebenefitsofZaloraIndonesiaitself,itisalso

importanttobetterthereputationofonlineretailingeneral.Thetopgeneralconcerns

regardingonlineshoppingis,accordingtoMacquarieResearch,productquality,

paymentsecurity,andcomplicatedreturnofgoodspolicies(MacquarieResearch,2016).

ItisthusimportantforZaloratoeasetheseconcernsandassureconsumersofthe

increasingqualityofonlineretail.Skepticismaboutshoppingonlineisabigthreatin

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Indonesia,anditisimportantforZaloratocounterthisthreatwithreputation

managementtoincreaseitscredibility.

Increasefeedbackfromcustomers

FeedbackfromcustomersismeanttoincreasethecredibilityofZaloraIndonesiaby

ensuringpotentialcustomersthatpreviouscustomersweresatisfiedwiththeironline

shoppingexperience.OnFacebook,44percentofIndonesianonlinecustomerssearch

forinformationaboutproducts,leadingthemtomakedecisionsbasedon

recommendationsandfeedbackfromtheirFacebookconnections(MacquarieResearch,

2016). Understandingandinfluencingcustomerengagementbetterthancompetitors

willthusleadtoastrongerbrandandmoreloyalcustomers.Itisthusimportantto

identifyengagedcustomerstostrengthentherelationshipwiththecustomerand

energizetheirwordofmouth.Thesecustomersaretheoneswhopostratingsand

reviewsafterpurchase,whichagaincaninfluenceotherpeople(Chaffey,2013).This

strategythereforeentailsmonitoringthequantityandfrequencyofcomments,blog

posts,discussions,reviewsandprofileupdatesonsocialmediatoidentifyengaged

customersandopportunities.Focusonpleasingengagedcustomersastogaining

positivereviewsisthusawayofspreadingthewordaboutZalora’sbrandandincrease

thepossibilityofmoretrafficonthesite.ThemorepositivereviewspostedaboutZalora

Indonesia,themorecrediblethebrandwillseem.

Increasefocusoncontentmarketing

ThemarketingdirectorofZaloraIndonesiahimselfpointedoutalackoffocuson

contentmarketing,butanincreasedneedforittoenablelong-termgrowth.Content

mediaisneededtogetmentionsofZaloraIndonesiaonasmanyplatformsaspossible,

whichdoesnotdisappearwhenZalorastopspayingforit(Bjordal,Interview,Appendix

1).ThisstrategyexcludesSEOmarketingasitisalreadywellestablishedinZalora

Indonesia’scurrentmarketingplan.Contentmarketingthroughearnedmediais

importanttohelpstimulatewordofmouthandincreasevisibilityofthebrand(Chaffey,

2013).Thefocusofthisstrategywillbeoncontentmarketingonsocialmediaandblog

platforms.

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Differentiatepromotion

DifferentiatingZalora’spromotionfromcompetitors’isamethodofincreasingbrand

visibility.Promotionscanbeusedbothintheonlineandofflineworldwithtoolssuchas

advertising,selling,salespromotion,PR,sponsorship,directmail,exhibitions,

merchandizing,packagingandwordofmouth(Chaffey,2013).Differentiated

promotionswillhelpincreasebrandvisibility,asitentailspromotionsthatcatchesthe

consumersattentionandmakesZalorastandoutandbemorevisibleintheIndonesian

market.IfZaloracanunderstandandinfluenceengagementbetterthanitscompetitors,

thiswillhelpdevelopbrandloyaltyandattractcustomers(Chaffey,2013).The

promotiondifferentiationwillinthisroundfocusmostlyonsalespromotion,PR,

merchandisingandwordofmouth,asthesearethemostlackingand/orcanbe

differentiatedthemostforZaloraIndonesia.

SummaryofTOWsmatrix

Allofthee-marketingstrategiespresentedintheTOWsmatrixaredevelopedtosupport

oneormoreofthefourobjectives.TheyarealsobasedontheSWOTanalysiswhere

ZaloraIndonesia’sstrengthsandtheindustryopportunitiesaretakenadvantageofand

theweaknessesandthreatsareminimizedandcountered.Whattheyallhavein

commonistheirgoaltoenhanceZaloraIndonesia’salreadygreatgrowthpotentialand

toincreasefocusonlong-termgrowth,relativetotheinitialfocusonfast-pacegrowthto

reachprofitability.

ThechoiceofstrategieswillbefurtherexplainedthroughthelastpartoftheSTOP&

SATISpoints(SATIS).

5.3.5Sequence

Thereshouldbeasequenceoftools,meaningthatthestrategiesshouldbesetinplacein

anorderthatmakessense.Themainguidelineistoachievecredibilitybeforevisibility

(Chaffey,2013).AsZaloraIndonesiaalreadyhascredibilityinthemarketandisan

establishedonlinefashionretailer,thesequenceofthestrategiesisnothighly

important.

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Thestrategiescanratherbesetinorderintermsofimportance.Basedonthesituation

analysis,oneofthemostimportantthingforZaloratofocusonisconvincingthe

Indonesianconsumersthatonlineshoppingissafe,convenient,andopensupaccessto

brandsthatarenotintraditionalstores.Thus,thestrategiessupportingtheobjectiveof

credibilityshouldgetthemostattention.Zaloraisaknownonlinefashionwebsitein

Indonesia,butforittobecome“thenumberonego-toplaceforfashionshopping”,the

brandneedstobevisibleonasmanyonlineplatformsaspossible.Bjordalmentionsin

theinterviewthatcontentmarketingwillbethekeytolong-termgrowth,butthatthey

havenotfocusedmuchonthisyet(Bjordal,Interview,Appendix1).Thesecondmost

importantobjectivetoachieveisthusincreasingbrandvisibilitybyincreasingfocuson

contentmarketinganddifferentiatingads.

Afterinitiatingstrategiesforcredibilityandvisibility,itisimportantforZalora

Indonesiatofocusonincreasingthetotalvalueoftotaltransactionstobecome

profitable.ZaloraIndonesiaisconsideringgoingpublicinafewyears,whichmakesit

valuabletoshowforhighgrowthandapositiveprofitability(Bjordal,Interview,

Appendix1).ThebounceratemaybeinfluencedbybadInternetconnection,electricity

blackoutsandlowqualitytraffictypicallyfromSMSs,e-mailspam,affiliates,andSEO

(Bjordal,Interview,Appendix1).Creatingmeasurestogetwebsitevisitorstobrowse

otherpagesonthesiteisimportanttoincreasesales,butthebounceratemaynotbe

suchatrustworthymeasure,asmentioned.Thestrategiessupportingtheobjectiveof

reducingthebounceratearethusimportant,buthasthelowestprioritybasedon

insecurityaboutthereliabilityofmeasurement.

5.3.6Acquisitionorretention

Thisquestionconcernswhetherthereisanemphasisonacquiringnewcustomers,ora

focusonkeepingthecurrentcustomerbasehappyandloyal(Chaffey,2013).ForZalora

Indonesia,thefocusisonacquiringnewcustomersasdescribedintheproblem

formulation.Indonesiahasalargepopulationof260millionpeople(Worldometers,

2016),withagrowingbaseofyoungInternetactiveconsumerswithincreasing

purchasingpower,whichactaspotentialcustomersforZalora.AsIndonesiahassucha

largeuntappedpotentialofcustomers,itisimportantforZaloratotakeadvantageof

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thisopportunityandgrowtheircustomerbase.Atthesametime,itisessentialfor

Zaloratomakesurethattheiracquiredcustomersarereturningcustomers.Engaging

andinteractingwiththeircustomerstoretainthemisthusalsoimportantforlong-term

growth.Thestrategythereforefirstlyfocusesontheacquisitionofnewcustomers,while

somemarketingtoolsalsowillbeconcernedwithretainingcustomers.

5.3.7Tacticaltools

Thechoiceandemphasisondifferenttacticaltoolsaredrivenbystrategy(Chaffey,

2013).Thestrategicchoicesofthissectionwillthusaffectthetactics,whichwillbe

presentedinthenextsectionoftheSOSTACstructureandthereforenotincludedunder

strategy.

5.3.8Integration

AstheIndonesiancustomersareevolving,andthereforeincreasinglyusetheInternetto

stayconnectedandaccessinformation,theimportanceofintegratedmarketing

intensifies.Integratedmarketingentailahigherlevelofcommunicationwiththe

customer,wheremarketingismeanttocreateadialogandnotjustpushinformation

(Yeshin,2012).Mostofthestrategiesandtacticspresentedwillenablecommunication

withthecustomerstoincreaseengagementandcreatearelationshipbetweenZalora

Indonesiaandthecustomer.Itisalsoessentialthatthereisasenseofcohesioninthe

messagesthatthedifferentmarketingtacticscommunicate(Yeshin,2012).Thee-

marketingplanisthusintegratedallthewayfromthesituationanalysistothe

objectives,strategies,andtacticstoprovideconsistencytoensurethatthemarketing

toolsconveythesamemessage.

5.3.9Socialmedia

Socialmediacanbeaplatformforlisteningtoandengagingwithcustomers(Chaffey,

2013).Thesocialmediastrategyisintegratedunderthestrategyconcerningincreased

focusoncontentmarketing.Socialmediamarketingwillbeusedtoincreasevisibility

throughuser-generatedcontent,byengaginguserstotalkaboutthebrand.More

mentionsofZaloraonsocialmediawillincreaseawarenessofthebrand,andhopefully

theZaloranamewillstickinconsumers’memoryuntilthenexttimetheyarepurchasing

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fashiononline.Inthisway,socialmediacancontributetoZalora’sultimategoalof

becomingthe“numberonego-toplaceforonlinefashionshopping”.

5.3.10Summaryofstrategy

Thestrategiespresentedaredevelopedtoachievetheobjectivesofincreasedcredibility,

increasedvisibility,ahighertotalvalueoftotaltransactions,andareducedbouncerate,

inthatimportancesequence.ThemostimportantoverallobjectiveforZaloraIndonesia

istoacquirenewcustomers,asIndonesiacontainssuchalargeuntappedpotential

customerbase.ThestrategiesdrawnfromtheTOWsmatrixalsosupportsthisview.

Acquiringnewcustomerswillbeachievedthroughincreasingtheassortmentofbrands

andproducts,increasingtheamountofproductsboughtpercustomer,promotingthe

benefitsofshoppingatZaloraIndonesiacomparedtotheircompetitors,engaging

customerstogivefeedbacksontheirshoppingexperience,increasefocusoncontent

marketingthroughsocialmediaandblogs,improvewebsitedesign,differentiate

promotions,andimprovethereputationofonlineshoppinganddeliveryinIndonesia.

Thedetailsofhowthesestrategieswillbeutilizedtoachievetheobjectivesare

presentedinthenextsection,exploringthepossibletactics.

5.4Tactics

Tacticsarethedetailsofstrategy,whereallthee-toolswillbepresented(Chaffey,

2013).Forthepurposeandscopeofthispaper,atimelineofwhathappensexactlywhen

willnotbedeveloped.Budgetconsiderationsarenotincludedeither,asthecompany

hasnotputforwardamarketingbudget.Rather,thetacticspresentedhereare

suggestionsforZaloraIndonesiatoconsider.Themarketingtoolsdevelopedsupportthe

strategies,andwillthereforebepresentedundereachstrategy.

5.4.1Increasebasketsizepercustomer

Influencingcustomerstobuymorethanwhattheyinitiallyintendedrequiresan

optimizationofthewebsite’scontentthataffectsthecustomers’evaluationprocess.This

entailscontentsuchasonlineproductguides,productselectorconfigurations,detailed

information,productpicture,price,availabilityanddeliveryinformation,andconsumer

reviewsandratings(Chaffey,2013).ToimproveZaloraIndonesia’scustomerevaluation

content,somesuggestionsaremade.

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Customizationofcontentisconsideredasourceofcustomermotivation(Chaffey,2013).

Byusingcookiesoralgorithms,ZaloraIndonesiacanpersonalizeitswebsitecontentto

theindividualcustomer.Thiscanentaila“foryou”guideontheentrancepagewhich

presentsfashionitemsthatthecustomermostlikelyisinterestedin.Thiscanfor

exampleinvludesimilarclothesandstylesthattheyhavebeenlookingatbeforeor

searchedfor.Similarly,otherinspirationalpromotionsontheentrancepagecan

contributetocustomermotivation.Thiscanbedonebyusingbloggers,whoarehighly

popularsourcesofinspirationinIndonesia(Bjordal,Interview,Appendix1).

Inspirationalpromotionscanthusincludepopularbloggersshowingtheirfavoriteitems

andbrandsontheentrancepage,urgingvisitorstocheckitout.Ifthesemethodsof

motivationaredoneproperly,thelikelihoodofthecustomerbeinginspiredtobuy

severalitemswillincrease.

Optimizingtheproductguideandselectionisalsoimportantmeasurestoaffectthe

customer’sevaluationprocess.Makingthisconvenientwillthusmotivatethecustomer

tobuymore(Chaffey,2013).AsmoreproductsareaddedtoZalora’sassortment,itgets

moreimportanttocategorizetheirproductsintogroupssothatitiseasierforthe

customertofindwhattheyarelookingforwithoutbrowsingthroughthousandsof

differentuninterestingproducts.ToimprovetheproductselectionguidesonZalora

Indonesia’swebsite,morefilteringoptionscanbeadded.AsZaloraistargetingfashion

consciouscustomers,anoptionthatshowspiecesfromtheseasonsbiggesttrendscan

beadded.Thiscanforexampleentailtrendslikeculottes,croptops,fringes,etc.,and

shouldalsobeadjustedandtailoredtodifferentseasons.Thiswillimprovemotivation

intheevaluationprocessforthecustomerandhelpincreasethebasketsizeper

customer.

5.4.2Increasenumberofproductsandbrandsoffered

Thisstrategyisverystraightforward.Increasingtheassortmentofbrandsandproducts

entailssealingdealswithinternationalandlocalbrandstobeabletoselltheirproduct

onZaloraIndonesia’swebsite.Thisusuallyrequiresspeciallicenseagreements,which

canvarywithdifferentbrands.AsZaloraisamemberoftheGlobalFashionGroup,itis

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suggestedtofirstlyacquireinternationalattractivebrandsthattheothermembersoffer.

ItwillmakeiteasierforbrandstoalsoacceptZaloraIndonesiaasalicensedseller,as

theGlobalFashionGroupdelivereconomiesofscaleinsourcinginternationalbrands

(RocketInternet,2014).Thesecondtacticistoacquiremorelocalbrands,asZalorahas

ahigherbargainingpoweroverthese,mainlybecauseofitsleadingpositioninthe

onlinefashionretailmarketinIndonesia.Localbrandsarealsohighlydemandedinthe

Indonesianmarket,asIndonesiansliketosupportlocals,andbecauselocalbrandsare

usuallycheaperthaninternationalones(Bjordal,Interview,Appendix1).Thistacticwill

supportthestrategyinachievingtheobjectivesofbothanincreasedtotalvalueoftotal

transactionsandanincreasedcredibility.

5.4.3Promotecustomers’incentivetoshopatZaloraIndonesiaandonlineshoppingand

deliveryreputationmanagement

Thesetwostrategieshavebeencombined,asthetacticsforbothareverysimilar.In

promotingcustomers’incentivetoshopatZaloraIndonesia,Zalorawillalsoindirectly

managethereputationofonlineshoppinganddelivery.ZaloraIndonesianeedsto

promotetheircustomerbenefitsforittoattractcustomersandincreasesales.TheirOVP

shouldbemorevisibleontheirentrancepage,asfreedeliveryandmanypayment

optionscanbecrucialdeterminantsofwhetheraskepticalIndonesiancustomerdecides

toshoptheirclothesatZaloraornot.TheOVPcurrentlypresentedontheentrancepage

shouldbemadeslightlybiggerandstandoutwithabrightercolor,astheblackand

whitefontandillustrationsdisappearalongsidethecolorfuladsandpicturesonthesite

(Appendix2).Thepropositionshouldalsocontainaremarkabouttheirlarge

assortmentoffashionbrands,asthisalsodistinguishesthemfromtheircompetitors.

Acleverpromotion,whichhighlightscustomers’problems,canleadtoachangeof

buyingpatternforthecustomer(Chaffey,2016).AsitisrecognizedthatIndonesian

customersareskepticaltoonlineshoppinganddoesnothavetrustinonlinepayment

systems,apromotionthateasestheirfearsandproblemscanmakethemconsider

shoppingonlineatZalora.ThisentailspromotingZaloraIndonesia’sOVPviadifferent

communicationtools.AstheInternetpenetrationinIndonesiaisquitelow,offline

marketingisstillimportant.Anofflinepublicdisplaycampaigncanthereforebesetin

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motioninIndonesia’slargestcities.ThecampaignshouldfocusonZalora’sOVPand

questionIndonesians’fearofonlineshopping.Thedisplaysshouldbelocatedinpublic

placeswhereitcanreachfashionconsciousconsumers,forexampleinandaroundmalls

andclosetopopulartrendrestaurantsandcafés.

5.4.4Improvewebsiteattractiveness

Tomakesurethatthewebsitedesignisoptimizedtoreducethebouncerate,Zalora

Indonesiawillhavetosetsomeinitiativesinmotion.Thegraphicsmustbeoptimizedfor

fastdownloading,andtestedusingdeviceswithslowInternetconnection(Chaffey,

2013).Thisshouldbedonetoensurethatallvisitors,includingthosewithslowInternet

connection,willhavearelativelyfastdownloadofZaloraIndonesia’swebsite.Testing

shouldalsobedoneusingdeviceswithlowresolutiontoensurethatthescreenis

visuallyattractiveandeasytoreadeventhoughthevisitorisusingalowerenddevice.

ThesetestsareespeciallyimportantinIndonesiawheretheincomelevelsarerelatively

lowandtheproportionofInternetuserswithlowerqualitydevicesismostlikelyhigher

thaninmoredevelopedcountries.

5.4.5Increasefeedbackfromcustomers

Usingengagedcustomerstoincreasefeedbackisessentialforthecredibilityofthe

brand.Engagedcustomersarenotnecessarilythosewhobuythemost,buttheoneswho

postratingsandreviewsthatinfluenceothers(Chaffey,2013).Thesearethecustomers

thatZaloraneedstokeepsatisfiedastoincreasetheamountofpositivefeedback.To

keepthemhappy,ZaloraIndonesiacanstartanambassadorprogrammetostrengthen

theirrelationshipandenergizetheirwordofmouth.Tomanagethis,ZaloraIndonesia

hastomonitortrafficonblogs,forums,reviews,profileupdates,etc.toidentifywho

theirengagedcustomersare.Theyshouldalsoimplementaquickreviewasastandard

partoftheirafter-salescontactstrategy,lettingcustomersratethepurchasingprocess

rightaftersendingintheorder,aswellasaratingoftheproductanddeliveryafterthey

havereceivedtheproduct.Thiscanhelptheengagedcustomersidentifythemselvesby

theirownselection(Chaffey,2013).

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5.4.6Increasefocusoncontentmarketing

Asmentionedinthestrategy,Zalora’scontentmarketingshouldfocusonsocialmedia

andblogplatformsastoincreasetheamountofcontentaboutZaloraIndonesiaonline.

Engagingincollaborationswithprofiledbloggersisonewayofdoingit.Thebloggers

canhaveaweeklyoutfitpostoverfourweeks,orsimilar,wheretheyonlyuseclothes

boughtatZaloraIndonesiawithaspecificthemeeachweek.Thesepostsshouldinclude

linkstothespecificgarmentsonlineatZaloraIndonesiawherecustomerscaneasilybuy

whattheysawontheblog.Thebloggerswillbepaidperclick,receivingasmallmargin

foreveryclickandahighermarginforeverysolditemthroughthelink.Thisis

important,asthecontentmustbeeasytobuytoincreasetheultimategoalofacquiring

newcustomers(Chaffey,2013).

SocialmediacontentshouldfocusonthetopthreesocialmediasitesinIndonesia:

Facebook,YouTubeandInstagram(SimilarWeb,2016a).Toengageconsumersand

createawarenessofthebrand,ZaloraIndonesiamustinteractwiththecustomers

(Chaffey,2013).Thesocialmediamarketingshouldthereforeseektomakeconsumers

participate,andnotonlyofferastaticad.Thiscanentailcontestsonthementioned

socialmediaplatforms,wherecustomersareencouragedtoposttheirowncontenton

whytheylikeZaloraIndonesiatowinprizessuchasgiftcards,products,orsimilar.

Communicatingwithcustomersisimportant,andthistacticwillencouragethesharing

ofthebrand,user-generatedcontent,andsparkleinteractionbetweenpeople,whichare

allimportantmeansofencouragingparticipation(Chaffey,2013).

5.4.7Differentiatepromotion

AdifferentiatedpromotiontacticshouldenableZaloraIndonesiatostandoutfromits

competitors.AsZaloraistheleadingonlinefashionretailerinIndonesia,their

promotionsshouldmirrorthis.Therefore,Zalorashouldpromotethemselvesusing

innovativemarketingtoolstocatchtheinterestofconsumers.Thiscanbedonebyusing

publicrelations(PR);throwingeventsalignedwiththelaunchesofnewpopularbrands.

TheseeventsshouldbeopentoanyoneinterestedinZaloraIndonesiauptoacertain

amount,offeringgoodiebagsandsimilargiftstothe100firstarrivals.

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ProfiledIndonesiancelebritiescanalsobeusedforadvertisementtocreateinterestfor

thebrand.Acampaignfrontedbyawellknownlocalcelebrity,tellingIndonesiansto

shopatZalora,willincreasetrustinthebrandasitmakespeoplethinkthatifitisgood

enoughforher/him,itwillbegoodenoughforthem(SmallBusiness,2016b).Itwillthus

makethemstandoutfromtheirsmallercompetitorswhomostlikelycannotaffordthis

typeofpromotions.Theseadsshouldbeputinfashionmagazinesandonsocialmediato

reachyoungfashionforwardpotentialcustomers.Iftheysucceedinengagingnewand

oldcustomers,thesedifferentiatedpromotionswillcontributetogainingnewcustomers

andmakingoldcustomersmoreloyal(Chaffey,2013).

5.4.8Summaryoftactics

Thetacticsarethedetailsofthestrategy,whichagainsupportsthechosenobjectives.

ThetacticspresentedinthispaperaremeanttobesuggestionstoZaloraIndonesiaasto

whichcommunication-andmarketingtoolstheyshouldusetoultimatelyacquirenew

customers.Thisisillustratedinthetablebelow.

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5.Conclusion

Thepurposeofthisthesiswastolookate-commerceinemergingmarketsfromthe

perspectiveofZalora,andhowtheycanfurthertheirgrowthintheonlinefashion

industryinIndonesia.Growthisheredefinedasincreasingsalesandcostumer

acquisition,accomplishedbyinitiatinge-marketingmeasures.Thee-marketingplan

developedforZaloraIndonesiaismeanttoexplorepossibilitiesforgrowththrough

answeringthetwosub-questionsoftheproblemformulation.Thefirstquestionofways

inwhichZalora’ssituationinIndonesiafosterorhinderitsgrowthintheonlinefashion

retailindustryisansweredthroughathoroughsituationanalysis.

ThesituationanalysisshowsthattheIndonesianonlinefashionindustryhasalotof

potentialbasedonthehuge,youngpopulationofIndonesiawithrisingpurchasing

power,increasingInternetpenetration,andincreasingfamiliarizationtoonline

shopping.Zalora’sbiggeststrengthisundoubtedlytheirmarketpositionasthelargest

onlinefashionretailerinIndonesia,enabledbytheirresourcefulownersand

partnerships,andinternalizationstrategy.Thecompanyalsopossessesseveral

resourcesthatcontributetotheircompetitiveadvantage,suchastheirbrand,robust

SEO,aprivateoperationsorganization,andprivatelabel.Theseopportunitiesand

strengthsallfosterZalora’sgrowthintheIndonesianonlinefashionretailindustry.

ThemarketthreatsthataffectZaloraIndonesiathemostconcerntheimmaturityofthe

marketinregardstoe-commerceandtheroughcompetitionfrombothonlineand

offlineplayers.ZaloraIndonesia’spresentstrategyisalsoconcernedwithfastshort-

termgrowth,whichhasledtoalackoffocusoncontentmarketing.Anothernotable

weaknessistheirhighbouncerate,whichmayentailalossofcustomersintheabsence

ofaninspiringanduser-friendlyentrancepage.Thesethreatsandweaknessesactas

hindrancestothegrowthofZalorainIndonesiabyinterferingwiththeacquisitionof

newcustomers.

Thesetobjectivestakethesituationanalysisintoconsiderationwhendetermining

whichareastofocuson.Theemphasisoftheobjectivesisthusonsales,reductionof

74

bouncerate,credibilityandvisibility.Thestrategyalsohavethesituationanalysisin

mindwhenrealizingtheobjectivesandansweringthesecondsub-questionofwhate-

marketingmeasurescanbemadetoachievegrowth.Throughleveragingand

maximizingstrengthsandopportunities,andcounteringandminimizingweaknesses

andthreats,eightstrategiesaredeveloped.AsZaloraIndonesiaisstillatarelatively

youngstage,thefocusisonacquiringnewcustomers,whichisalsoimpliedinthe

strategies.Thestrategicmeasuresmadetoachievetheobjectiveofincreasingthetotal

valueoftotaltransactionsare;increasingthebasketsizepercustomer,increasingthe

numberofproductsandbrandsoffered,andpromotingcustomers’incentivetoshopat

ZaloraIndonesia.Astrategyofimprovingthewebsiteattractivenessispresentedto

reducethebouncerate.Credibilityismanagedbyonlineshoppinganddelivery

reputationmanagement,aswellasincreasingtheproductassortment.Toincrease

visibility,Zalorashouldimprovetheircontentmarketingstrategyanddifferentiatetheir

promotions.

Thesestrategiesaresupportedbyexacttactics,whichexaminemarketingtoolsfor

realizingtheobjectivesandenablinggrowth.Thetacticsconcernedwithincreasingthe

basketsizepercustomerincludepersonalizedcontentandinspirationalpromotionson

site,aswellasoptimizedproductfilteringoptions.Toincreasethenumberofproducts

andbrandsintheassortment,itissuggestedthatZaloratakeadvantageofthebenefits

oftheGlobalFashiongroupinapproachinginternationalbrandsthatothermembers

alreadyhavelicensestosell,beforeacquiringmorelocalbrandstofitthepreferencesof

Indonesianconsumers.AmorevisibleOVPontheentrancepage,includingassortment

benefitsisencouragedtopromotethecustomers’incentivetoshopatZaloraIndonesia.

PromotingtheOVPofflinewillalsostrengthentheoverallonlineshoppinganddelivery

reputation,andreachconsumersinacountrywithalowInternetpenetration.Totackle

thehighbouncerate,atacticcanbetotestthegraphicsofthewebsiteusingdevices

withslowInternetconnectionandlowresolutiontomakesurethatthewebsiteis

designedtosuitdevicesofvaryingquality.Toincreasethelevelofcontentmarketing,

blogsandsocialmediaarethesuggestedplatformbecauseoftheirrelevanceinthe

Indonesianmarketandforthetargetgroup.Collaborationwithpopularbloggers

increasestheamountofcontentonline,andisassumedtoreachtherighttargets.

75

ContestsonthemostpopularsocialmediaplatformsinIndonesiaaresuggestedto

increaseengagement,whichisimportantwhenattractingcustomers.ForZalorato

differentiatethemselvesfromtheircompetitionthroughpromotion,itissuggestedthat

theyhostcustomerPReventsandlaunchesofnewbrands,whilealsopromotingtheir

brandwithcampaignsusingpopularIndonesiancelebrities.

Theobjectives,strategiesandtacticsaredevelopedtoachievegrowthintheIndonesian

market,thusansweringthesecondsub-questionoftheproblemformulation.Theparts

ofthee-marketingplanareintegratedtoachievetheoverallgoalofincreasingsalesand

acquiringnewcustomers.Followingthee-marketingplanwillthusenablefurther

growthforZaloraintheonlinefashionretailmarketinIndonesia.

6.1Control

Controlmechanismsareimportanttocheckifyouarehittingtherighttargetornot.

Controlsystemsshouldthereforebebuiltatoncetoensureknowledgeofwhatworks

andwhatdoesnot(Chaffey,2013).Afteradoptionofthedevelopede-marketingplan,

ZaloraIndonesiashouldthussetcontrolsystemsinmotionfromdayonetomeasurethe

effectivenessofthestrategyandtactics,andiftheobjectivesareachieved.Allthe

objectivesneedtobemonitoredthroughouttheyeartoseeiftheyareontherighttrack.

Thecontrolprocessshouldfollowtheprocedurebelow,allowingforcorrectionsofthe

marketingstrategyandtacticsiftheyarenotperformingaswellasintended.This

controlplanwill,however,onlybeconcernedwithperformancemeasurement,leaving

performancediagnosisandcorrectiveactionuptoZaloraIndonesiainternallytoreview.

Figure11:Summaryofthecontrolprocessfore-marketingplanning(Chaffey,2013).

76

Thiscontrolplanwillthusspecifythemetricsandthefrequencyofreporting.The

questionofwhowillmeasure,review,act,andcheck,isuptoZaloraIndonesiatodecide.

Thetablebelowpresentsthecontrolmetricsonwhatneedstobemeasured,howoften,

andhow.

WhatdoZaloraIndonesianeedtowatch Frequency How

Sales

1. Unitssoldpercustomer

2. GMV

1.Weekly

2.Monthly

1.Internalinformationsystem


Bouncerate

3. Bouncerate

3.Monthly

3.Webanalytics

Credibility

4. Numberofnewcustomers

5. Numberofrepeatvisitors

6. Brandreputation

4.Weekly

5.Monthly

6.Quarterly

4.Webanalytics

5.Webanalytics

6.Customersurveybye-mail

Visibility

7. Engagementratio:sumofshares,

likes,andcomments

8. Numberofbloglinksleadingtosales

9. Successofsocialmediacompetitions

7.Weekly

8.Once,oneweek

aftereachblogpost

9.Once,aftereach

endedcompetition


8.Webanalytics

9.Webanalytics

Thefrequencyofcontrolischosendependingonhoweasilythedifferentperformance

indicatorscanbeassumedtochange,howimportantitistofrequentlymeasurethem,

andthedegreeofmeasurementdifficultyandresourceintensity.Thedataconcerning

thedifferentperformanceindicatorsshouldbecompiledintoreportsandpresentedto

andreviewedbythemanagement(Chaffey,2013).

Webanalyticsisused,asatoolformeasuringvisitorbehavior,whilecollectionby

internalinformationsystemsisrequiredforsalesmeasures(Chaffey,2013).TheWeb

analyticstoolusedwillbeon-site,referringtoinformationgatheredfromtheZalora

website.Thistypeofwebanalyticscantracktheinteractionandengagementofvisitors

77

onthewebsite.ThemostpopulartoolisusingGoogleAnalytics,whichthusalsocanbe

recommendedforZaloraIndonesia(Linkedin,2015b).Totestifreputationmanagement

hasimprovedtheZalorabrand’sreputation,itisconsideredsuitabletosendoutsurveys

bye-mailtoallcustomerswhohavemadeapurchaseinthereviewperiod.

6.2Limitations

Thee-marketingplanhassomelimitationswhenitcomestoviabilityandapplicability.

Thee-marketingtacticspresentedaredevelopedassuggestionsforZaloraIndonesiato

consider.Becauseoflimitedinformationonresources,timeandbudget,theviabilityof

thesesuggestionsisquestionedandshouldbetakenintoconsiderationbefore

implementation.Becauseofthesameinformationlimitation,theactionspartofthe

SOSTACstructurewasexcluded,whichmaylimitthepaper’simmediateapplicability.

Thepagedelimitationalsosomewhatlimitsthescopeofthethesis,makingitinevitable

tocreatedemarcations,whichmayhaveaffectedtheanalysis.Theselimitationsare,

however,assumednottohavehadalargeimpactontheendresultandconclusionofthe

thesis.TheconclusionofthethesisisthusstillviewedasviableandapplicableforZalora

Indonesia.

78

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87

Appendix1InterviewwithJoBjordal,MarketingDirectorofZaloraIndonesia,04.04.2016HvaerdinstillingiZalora?Marketingdirectorkandukalledet.ViertreiledergruppeniIndonesia.ViharAnthonysomerfraHongKongsomercountrymanager.HantokoverforFredriksomvardentidligerecountrymanager,altsåCEOkanmanjosi.Hanharværtigruppaiveldigmangeåroghargoderfaring.Hankjennermarkedetlittbedreogså.Ogsåhardumegsomermarketingdirector,ogOlesomogsåernordmann,someroperationsdirectorsomstyrervarehuset,operationsfleetogkundeservice.DeterbarederesomerledelseniZaloraIndonesia?Ja,iseniormanagementsåerdetbareossegentlig,såharvimassesecondtiermanagerssomjobberundeross.HarderemangeIndoneseresomjobberfordere?Ja,vierca.700ansatteiZaloraIndonesia,mendetinkludererdaalt:folksomjobberpålageret,folksomkjørermopedtilkundenogsånneting.Men5av700erinternasjonale.Osstreiseniormanagementogtotil.Sådethjelpermedmarkedskunnskap?AbsoluttBrukerderenoenandremellomleddforåminskerisikoenforspråkligeogkulturelleproblemer?Nei,vigjøregentligikkedet,mendeterjoenstorkulturforskjellmellomNorgeogIndonesia,ogdetvaretganskestortkultursjokkåkommehit.Jegharmåttetomstillementalitetenogmåtenjegtenkerpåganskebetrakteligetterjegkomhit,ogdetmåjoallesomkommertilIndonesiagjøreforåfungereirollensin.Såvibrukeringenmellomleddellernoesomhelstslagssånt,menmanmåvirkeligomstillemåtenmanlederfolk,fordimanerforskjellige.Dumåjageogdumåpåenmåtevirkeliginstrueremeddetaljforattingskalbligjort.Deterbarekulturenher.Deervanttilatlederenskalinstruereogforklareihverminstedetalj.Operererderemedoverskudd,ogenpositivEBITDA?ViharfortsattnegativEBITDA.Viharetganskeheftigfokuspå”pathtoprofitability”,somerviktig.ViharenhelttydeligretningsomvimåfølgeforåkunnenåpositivEBITDAinnenetparår,menforeløpigervipåriktigretning.IndonesiaersettpåsomdetmeststrategiskemarkedetiZaloragruppen,ogmeddetsåmenerviatdeharmangemarkederogertilstedetimangeland,menIndonesiaerkanskjedetmedstørstpotensialetilåblistørst.Vierallerededetstørste,mentankentilgruppeneratiIndonesiasåmåmaninvestereforfremtiden

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InvestererdereiinfrastrukturiIndonesiaforåhjelpederesbedrift?Ja,vigjørpåenmåtedet,menbaretilbaketildetforrigespørsmålet;Singapore,HongKong,Taiwanermarkeddermantypiskalleredeharbegyntåkommeganskenærtlønnsomhet,deerganskemyenærmereennossfordifolkharganskemyehøyerepurchasepower,folkkjøperdyrereting,ogie-commercesåbørmanhaganskehøybasketsize,ellergjennomsnittligverdiperordreforatdetskallønneseg.Indonesiaeretganskelowendmarketderfolkkjøperliteogherhandlerdetmestomåblistoreførst,ogsåkanmanbegynneåtenkemerpålønnsomheten,såherharvietgansketydeligsynspunktpåatIndonesia,jamanmåtenkelønnsomhet,mendeterkanskjedetsistemarkedetdervimåværelønnsomme.Herervinødttilåvinnepålangsikt,såvijobberklartogtydeligmotlønnsomhet,mendetinvestererklartmyemeriIndonesiaennideandrelandene,bådemedtankepåmarkedsføringogbyggeinfrastrukturiformavåhabraoperationstruktur.Vikanleveremestepartenavordreneselv,såviharenoperationsorganisasjonsomersåpasstorsåvikanlevereca60%avalleordrenesombestillesfraoss.Detvarnettoppforåhakontrolloverhelebusinessenselvogkunnestyreretningentilselskapetistedetforåoutsourcealtsomharmedoperationsågjøre.Indonesiaeriferdmedåløpetomforlogistikkkapasitetfore-commercefordiinvesteringeneikkefølgerveksttaktenie-commerceindustrien.Viharværtavhengigavåinvestereivåregenlogistikkinfrastrukturforåkunneleveretilkundenevåre.FordereharetsamarbeidmedPosIndonesiaharjeglest?Ja,deteretveldigspennendepartnershipsomviinngittforbortimotethalvtårsiden,myepågrunnavdeproblemeneviharhattmedlogistikkiIndonesia,ogspesieltmedtankepåreturavvarer,somerlittkomplisert.ViharhvertfalllysttilågjøredetenklereforkundenåreturnerevarertilZalora.SåinngikkvietsamarbeidmedPosIndonesia,dermankanreturneregratisvedågåtiletpostkontorogleverepakkender,ogsåfikserderesten,ogsåfårdetilbakepengene.Detvarførstesteget,nestestegetbliratdeogsåkanplukkeoppvarenesineipostkontorene.Postkontoreneherharutroligmangebutikker.Jegtrordeterrundt10.000butikkeriIndonesiatotalt,ihvertfallmangetusen,sådetvarkjempelurtavoss,forvivardetførsteselskapetsomgjordeetsånttypepartnershipiIndonesia.Nåjobbervimedtoandrematvarekjedersomforegårpåsammemåte,sånnatmankanplukkeopppakkenibutikken,ogdukanogsåreturneredenutenåmåttebetalenoesomhelst.Hvisviklarerdet,såharvi30.000fysiskepickuppointsogreturnpointsiIndonesia.Viharogsålogistikkselskapersomlevererpakkenefoross,menrundt40%blirlevertavthirdpartylogisticservicecompanies.Delevererrettogslettpakkenefoross.Postenflytterlitevolumfoross,menviharetparlogistikkpartneresomflytterdetilposten,ogsåkankundenselvplukkedeopphosposten.Vibrukerbådepostenog3rdpartylogisticselskaperforåleverepakker.Erdetmangeleverandøreråvelgemellom,ogerdetlettåbytteovertilandre?Jadeterveldiglett,mendetsomerproblematiskeratallelogistikkselskapeneergodeinoengeografierellerpånoenområder,sådeteringensomerbestpåalt,såmanmåtypisksamarbeidemedmangeulikepartnere.Visamarbeidervelmedrundt10partnerepålogistikksiden.Ettselskapsomerveldigflinkpåengeografimenveldigdårligpåandre,såda

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brukermandempådet.Etselskaperveldiggodpåcost,mendeharganskedårligserviceforeksempel.Såvibrukerdemtillittforskjelligeformål.Erdetnoesomerspesieltfore-commercemarkedetiIndonesia?Ja,detviljegabsoluttsi.Førstogfremstkomjointernetthitfor5årsidenkanskje,sådeterveldignytt,ogsosialemedierernytt.Generelterinternettganskenyttogfremmedforfolk.Davietablerteossheri2012såvarviveletavdeførstee-commerceselskapetsometablertesegiIndonesia.Detvaretparlokalespilleresomvarganskesmåogliteseriøseegentlig,såvivardeførstesomkomogskullevinnee-commercemarkedet.Deterganskespennendeogtøft.Manvetjoaldriommankommerpådetriktigetidspunktetellerikke.Vikomkanskjelitttidlig,menhvisviikkehaddekommetsåhaddesikkertnoenandrekommetogtattvårposisjon.Jegtrordetvaretlurttidspunktåkommeinnpå,mendetbetyrjoatfolkikkeheltharbegyntåtenkepåmulighetenforåkjøpetingpånett.Deerveldigvantmedåkjøpeoffline,somvikallerdet.Påsammemåtesomvivardetpå90talletiNorge.Alleerjolittreddeforåkjøpepånettførstegang.ViharbruktganskemyetidpååprøveåoverbeviseIndonesiskekunderpåatdetertrygtåhandleder,ogatdufårbedretilbud,bedreselection,minstlikebilligepriser,ogfullreturretthvisdetvisersegåværeetproduktduikkehaddelystpå.Vibegynnerjoåfåganskebrabrandawareness;folkvethvaZaloraeroghvavistårfor.Manmåvirkeligbaregjøredetlettforfolkåhandleogredusererisikoenforatduenderoppmedetproduktsomduharbetaltformenikkeharlystpå.DetsomkarakterisererIndoneseremesteratdeharkommetveldigkortenda.DeterveldiglitenetthandelfremdelesiIndonesia,ogsomdunevnteinnledningsvissåerdenandelenavretailsalgsomere-commercemindreenn1%enda.Jegharfunnetnoestatistikkpånettoppdette,ogderstårdetatandelene-commerceavtotalretailsalgerpåca.0,6%Ja,ikkesant,deterveldigsmåttfortsatt,mendetvoksergrenseløstfort,ogdetkommerbaretilåvoksefortereogforterenårdetkommermerogmerkonkurranse.Mendeterikkebarepådetsomharmedinternettågjøre.EnannentingsomerveldigspesieltmedIndonesiaeratdeternesteningensomharkredittkortellerdebetkort.Betalingssystemerenavdestørsteutfordringeneher,deternestennonexcistingiformavatdeterkunkredittkortsomerlovtilåbrukeforbetalingpånett.Mankanikkebrukedebetkort,ogdeterbare3-4%avbefolkningensomharkredittkort,sådaeralternativcashondelivery(COD),altsåbetalepådøra,ogdetharsineutfordringer.Påenannenmåteerdetveldigbraidenformavatduserrisikoenforkunden,sådebetalerikkeførdeserproduktet.Detharvirketveldigbraforåbyggetillitttilkundensådehandlerrisikofritt;dubetalerikkeførduserproduktetogdukanreturnerehvisduikkelikerproduktetutenatdetkosternoe.SånnsettharkombinasjonenavCODoggratisreturretthjulpetveldigpååbyggetillitt.40%avdetviselgerblirbetaltpådøren,ogsåer40%avdetviselgerbetaltiATM,somerfordenandelenavbefolkningensomhardebetkortsomikkekanbrukesforåbetaledirektepånettsiden,menmanfårbetalingsinformasjonpåmailogsågårmantilenATMogtrykkerinntallene,ogsåoverføresdetfradebetkontoendintilselger.Deterskikkeligkronglete,mendeterdetvimågjøreforåfåsolgtpånetther.Deterenveldigdårligkundeopplevelse,menfolkervanttilågjøredether.Betalerderesterende20%medkredittkort?

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Ja,noenbetalermedgiftcardog,mendeteromtrentliknull,fordelingenerfordetmeste40-40-20avdeandrebetalingsformene.DeterveldetohovedutfordringeneviharheriIndonesia.Detåflyttefolkovertilonline,fordideikkeervanttilåshoppeonline.Ogsåerdetutfordringenemedbetaling.Entredjetingerkonkurransen,denbegynneråbligansketilspisset.Alleskalværeonline,ogalleskalhaenegene-commerceshopnå,sådetbareflommeroveravkonkurrenternå.Harderenoenproblemermedmyndigheteneilandet?Regleneendrersegheletiden,ihvilkenretningdeskalgå,omdeskaltillatee-commerce,omdeskalgjøredetvanskeligerefore-commerceågjørebusiness.Myndigheteneharenganskeullenstrategipåe-commerceogreguleringeneendrersegganskeofte.Plutseligendagkandebestemmesegforåendreregelverketganskebetraktelig.Hvamedthenegativelist?Atonlineretailerstengtforutenlandskeaktører,erdetnoedereharproblemermed?Detharvifaktiskikkehattspesieltmyeproblemermedfordivietablerteossførdetregelverketbleimplementert,såvivarjoveldigheldigefordivietablerteossførdetvarulovligmedFDIietIndonesiskselskap.Ogsåbledetstengt,såvihaddeenfordeliogmedatingenandrekunnekommeinnmedutenlandskepengerogetableresittselskap.NåhardeåpnetdetoppigjenidenformatdukansøkeomåfåtillatelseellerlisenstilåhaFDI.Jegtrordeharåpnet100slotsellernoesånt.Jegerikkehelt100%sikkerpåhvordandeter,mendeterenklereenntidligere.Erdetinnenfore-commerce?Ja,deterstortsettbaree-commerce.Hvameddetnyee-commerceroadmapsomskalkommesnart,erdetderfordetharblittåpnetforFDI?Nei,ellerdeterendelavdet,mendeinnsåatdeikkeakkurathaddelagttilrettefore-commercegrowthiIndonesia.Ogpåenannensideerdeganskeåpneforatdetskalutgjøreenstordelavretailsales.Deterlittfremogtilbake.Deharingenpeilingpåhvadegjørherimyndighetene.Despørossområdpåmangeting.DesenderogsåfolktilSiliconValleyforåfinneutavhvordanmankanfostreenbrae-commercebransjesomikkeerpåbekostningavmyndighetenesevnetilåsamlepengerfradetogtjenepådet.Deterderforatmyndigheteneplutselighargittfrasegmulighetentilåskattepåe-commerceoglittsånneting.Deerveldigreddeforatdetkanskadeatdeikkeregulererdet.Detskalkommeetsåkalte-commerceroadmap,ogdeharblantannetspurtossomåkommemedinputogværemediloopen,menforåværeærligkandetkommeuthvasomhelstavreguleringfradenroadmappensomskalpresenteres.Vierlittbekymretfordiduvetaldrihvamyndigheteneherbestemmersegforågjøre,ogdeterganskemangesterkeorganisasjonerhersomdriverlobbyvirksomhetentenmotellerforforskjelligesaker,såvierlittbekymretfordideharjotidligereværtganskegroteskeoverforaltsomharmede-commerceågjøre.Detkanhendeatvifårenskikkeligoverraskelsetildetnegativenårdenroadmappenslippes,mendetfårvise.Detstårjobareatroadmappenskalværepositivformarkedetogåpneopp.

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Deterproblemet,degårutogsierenting,ogsåkommerdetnoeheltannet.Sådeerveldiglitekonsistenteikommunikasjonen.Deharikkeenighetpåstortingetengang,ogdeterbareveldigkaotisk.Enregelkanimplementeresidagogfjernesimorgen,ogsånnfungererdetmedalt,sådeteretgansketøftlandskapiforholdtilregelverket.AvdetjegharleststårdetjomyeomatIndonesiaerveldigpolitiskstabiltogikkeharsåstoreproblemer?Deterveldigustabilt,ogjegfikketannetperspektivdajegsnakketmedenjentefraGooglesomjobbermedgovernmentrelationsiheleSørøstAsia,ellerheleAsia,ogsaatVietnamogIndonesiaerdemestproblematiskelandeneogmanvetaldrihvasomkommerutavde.Dekan”screwyouover”hvisdebestemmersegfordet,nårsomhelst.Såjegvilikkeakkuratsiatdeterstabilt.Degirantageligvisuttrykkfordet,menvioppleverdetheltannerledes.MenergenereltdepolitiskeforholdeneiIndonesiastabile?Jegvilsibådeog,deterganskeustabiltegentlig,menspesieltaltsomharmede-commerceågjøreerveldigustabilt.Deharikkebestemtsegforhvadeharlysttilågjøremede-commerce.Deterjoogsåganskekorruptidetlandether,deharmangesterkefamiliersomersterkepåofflineretailingsomdriverlobbyvirksomhetforåholdee-commerceunnaderesbusiness.såjegvilabsoluttikkebeskrivedetsomstabilt.Verkenlover,reglerellerpolitikk,hvertfallnårdetgjeldere-commerce.ErmiljøhensynviktigforIndonesiskekundernårdehandler?Nei,ikkespesieltmye.Deternestensyndåse,forIndonesiaeretkjempeflottlandnaturmessigogerfullavnaturressurserogsånt,menhvisduhadderangertdestørsteindustrieneilandenehaddeduantageligvisfåttdensammelistasomomduhadderangertdemestondskapsfullebransjenedukantenkepåfraetmiljøhensyn.Såde3størsteertobakk,kullogdeforestasion,altsåbrennenedskogforådrivemedpalmeolje,deterbareåtømmenaturenfornaturressursersåfortsomoverhodetmuligforåtjenepådet.Ogtilogmedmiljøorganisasjonerharliteactionher.VivurdertmyeåinngåsamarbeidmedUnicefogganskemangeCSRtypeselskapersomkanhjelpeossåbyggebrand.Vidonererjoendelklærogsånneting,menviharkommetditatvitrorikkedetkommertilåhanoesærligbrandvalue,deteringensombryrseg.Sådeterikkeviktigfordereåhaetegetorganiskmerkevareellerlignende?Nei,ditharviikkekommetenda.Iforholdtilteknologierdetvelkanskjeikkenoesærligmeråsienndetdualleredeharfortalt?Nei,meninternettetblirjobarebedreogbedre,ogbedredekningoveralt.TeknologigenereltiIndonesiamenerjegharkommetveldiglangtallerede,tattibetraktninghvorlengeinternettetharværther,ogdeterjomyepågrunnavatalleverdensinvestorersomerinteressertie-commerceserpotensialeiIndonesiaogdetfosserinvesteringspengerinnilandetogmyeerforåfundetechogstart-ups.Jegvilnestensiatmangeselskaper,kanskjeinkludertossselvharkommetlengreennveldigmangenorskeselskaper,ogeuropeiske,iformavhvorbrateknologiviharbygd.VeldigmangeavdeappenevibrukerherermyebedreenndemanbrukeriNorgefordidetblirinvestertsåmye.

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90millionermenneskerharinternettiIndonesia.Deteretvanvittigstortmarkedalleredeogdetblirjobarestørreogstørre.Ca.hvorstoremarkedsandelerharZaloraiIndonesiainnenonlinefashionretail?Viharjoenganskestormarkedsandelinnenonlinefashionretail.Akkurathvorstorervanskeligåsiiogmedatingenvetnoeomhverandre,menviersoleklartstørstpåsalgavklærpånett.Jegvetikkeomdeterlurtåsinoeommarkedsandelengang,forjegharikkepeiling.Deterganskelangttilnærmestekonkurrent.Problemeteratdetersåmangekonkurrenteratdetervanskeligåsinoe,ogvivetveldigliteomhvormyedeselger,menvivetgodtatviersoleklartstørst.HvamedutenlandskeselskapersomikkeharenegenIndonesiskside?ForeksempelAsos.Ja,detfinnesjoendelavdem.DeshippertilIndonesia,menharingenpresenceellerkontoriIndonesia.DeernokganskesmåiIndonesiaforeløpig.Deternokganskefåsomkjøperfraf.eks.Asos,menmanvetjoaldrinårdebestemmersegforåkommeinnpåmarkedet.Detkommerjonyekonkurrenterhverenesteuke,sådetbegynneråbliganskecompetitive.Deterveldigfåtallsomblirpublisertsådeterveldigvanskeligåsinoepåstørrelsenpåmarkedetoghvormyehverenkelaktørharavmarkedsandeler.HarZalora,ellerRocketInternet,noenspesiellekonkurransefordelersomderedrarnytteaviIndonesia?PågrunnavatviblirdelviseidavRocketharvinoenkonkurransefordelervedåværeendelavRocketInternet.Detharviabsolutt.RocketInterneterjoetfantastiskselskap,ogstarteroppnyeventuresiemergingmarkets.Desitterpåenvoldsomkompetansepåhvasomfungereroghvasomikkefungereriulikemarkeder,ogvedulikebusinessmodeller.SådadestartetoppiSørøstAsiasåhaddedealleredeværthøytinvolvertiZalandosomdeinvesterteogbacketoppbådemedmanagementcapasityvedoppstartenavZalando,ogsolgteseggradvisutder,ogdeterjodenmodellendeharimplementertiIndonesiaogSørøstAsia.Baredetatviharhattfolksomharstartetopptilsvarendebusinessesandrestedererjokjempebra.ViharmyestruktursomerbasertpåRocketInternetsinklassiskee-commercestruktur.VibrukerogsåmangeavsystemenesomRocketInternetharutvikletforandreselskaper,såviharfåttveldigmyegratisstart-uphjelpavRocketInternet,rettogslettfordideharstartettilsvarendebusinessesandresteder.ForåskullestartefrascratchiIndonesiasomenlokalplayersåmådujobarebyggeallesystemerselvellerkjøpefraandre,menvihaddejoenstartpakkemedalleulikesystemersomvikunnevelgeåvrakemellomfraRocketInternet.Ikkeminstenmåteåbyggebusinesspå.Nårmanstarteretnyttselskapsåskalmanvitehvordanmanskalvelgevisjonogmisjon,oghvordanmanskalkommesegdit.OgdersitterdetjoendelstarthjelpfraRocketInternett.Devarveldiginvolvertdeførstetoåreneivirksomheten,ognåerdeveldigliteinvolvertannetennatdedelerbestpractisesogbenchmarksogsånneting.Kompetanseervelegentligdetviktigsteviharfåttfradem.Deterdenviktigstekonkurransefordelen-kompetanseogsystem.Harderenoenandrelokaliserings-spesifikefordeleriIndonesia?TypgrunnentilatderestartetoppiIndonesia?HovedgrunnentilatvistartetoppiIndonesiavarjoatdeteretmassivtmarkedmed250millmennesker,ogsåskjøntejofolkatnårinternettførstkomhitsåkomdettilåtaheltfullstendig

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av,såIndonesiablesettpåsometveldigviktigmarkedfradagén,ogbareetterhvertsominternettharvokstogviharfåttmerogmeroppmerksomhetsomselskaphardetblittviktigereogviktigereforgruppa,ognåervisoleklartstørst.Menlokaliseringsspesifikkefordelererdefinitivtbilligarbeidskraft.FolkharengjennomsnittligminstelønniJakartarundt1200-1300krimåneden,ogdetertregangerhøyereennienannenstorbyiIndonesia.JakartaerenganskedyrbyrelativtsettiforholdtilandrestorebyeriIndonesia.Viharjotenktpåomviburdeflyttedeleravorganisasjonentiletbilligerested.Kundeserviceforeksempelkunneviflyttetditfordivibetalerminstelønnuansetthvorvier,sådetlønnersegabsoluttåhaiIndonesia.MenvikommernokaldritilåflyttekontoretpågrunnavatdetervanskeligåtiltrekketalentutenforJakarta.OghellerikkevarehusfordiJakartaogJabodetabek(greaterJakarta)utgjørenaltforstorandelavmarkedet.Menskattemessigerdetikkeenspesieltstorfordelåværeher.Deterganskemyeskattpåimportogmyeskattpålønning,såskalduhaenexpatsåskalhanogsåbetaleendelmerskattennforeksempeliSingapore.Vibetalervanvittigmyeskattpåimport,somerganskeproblematisksidenmyeavdetviselgererinternasjonalemerkevarer.Sådablirdetjonaturligganskedyrtiforholdtillokaleprodukter.UtenomdetsåerdetingenspesiellegrunnertilatvietablerteossiIndonesia,menviharjopåenmåtebygdvåregenlokaliserings-spesifikefordelvedatviharbygdetstortlogistikkselskapsometsvarpåmangelpåbrainfrastrukturiutgangspunktet.Såviharbygdetstortlogistikkselskapbeståendeavhundrevisavriderssomlevererpakkerforosspågrunnavatdetikkefantesselskaperellerinfrastrukturhersomkunnegjøredetfoross.Nåharvijopåenmåtelokalisertossveldigheftigogfåttenkonkurransefordeliforholdtilveldigmangeavkonkurrentenevåre.Hvamedinternaliseringsfordeler?FordelenevedåhaenegenIndonesisksideiforholdtilåbareselgefraSingaporeforeksempel.Detharutroligmyeåsiforossatviharlokalpresence.FørstogfremstfordiRocketInternetharveldigstorsuksessiheleverdenpågrunnavatdetilpasserallevirksomhetenetilhvertenkeltmarkeddeoperereri,sådeterpåenmåtetypiskmåtendegjørdetpåsidenduikkebarekanreplikeresideni,laosssiUSA,ogsåkjøredetiheleAsiamarkedet,detvilleikkefungertfordidetersåpassstoreforskjellermellomdeforskjelligemarkedene,ogtilogmedinnadiSørøstAsiaerdetstoreforskjeller.Vihaddenokaldriklartåværederidaghvisviikkehaddehattenindonesisknettsidesombådehardetlokalespråketogsomharalledelokalemerkevarene.SåhaddeviikkeværttilstedeiIndonesiasåhaddeviikkeklartåsignealledestoremerkevarenesomproduseresher.70%avallemerkevareneviselgererIndonesiskemerker.ErIndonesereveldigopptattavlokaleprodukter?Ja,detharlittmedågjøreatdeterdyrtåimporteretinghit,såalleinternasjonaleprodukterblirganskedyreiforholdtillokale.Ogsåerdetjoproteksjonismepolitikksomharblittkjørtialleårsomsikkertharskaptdentrendenmotlokaleprodukterogatdeerbilligere.ForosshardetværtviktigåværetilstedepåbakkeniIndonesia.Påsammemåteformarketingsåerdetkjempeviktig,forvidrivermedveldigmyePR,viharveldigmyelokaleeventsogfashionshowsogdelerdetilokalemedier.Pådenandresidensåkanvidrivemedmangepartnerships.Viharsamarbeidmedalledestoretelefonselskapene,ogviharsamarbeidmedalledestorebankenesombareblæstermassesms,e-postogkommunikasjonhverenestedag.Jegtrorvisendte250millionersmstiltelefonselskapeneskunderifjor.Deterdefinitivtveldigliteregelverkpåhva

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mankangjøreher.Deterganskemangesyketingvigjør,mensomogsåkreveratvierpåbakken,vikunnealdrihahattavtalermeddehvisviikkevartilstede.ErdetnoenspesielleressurserdereharsomskaperbærekraftigekonkurransefordelerforZaloraIndonesia?Ja,definitivt,viharjosidendagénfokusertekstremtpåatviikkeskalværeetselskapsomselgernoeannetennautentiske,ekteprodukter,ogdetburdevijokanskjesettpåsomenåpenbargreie,mendeterutroligmangefalskeprodukteriIndonesia,ogdeterfåavdee-commerceselskapenesomvikonkurrerermotsombryrseg,deselgeralt,uavhengigomdeterekteellerfalskeprodukter.Menviharalltidhattfokuspååhaektevare.IennyFacebookrapportsomblepublisertome-commerceiIndonesia,såbledetjofaktisktrukketfremsomdenallerstørstefryktenIndonesereharvedåhandlepånetteratdeterfalskeprodukter.Jegvilsiatsidenvifradagénharfokusertpådetogaldrisolgtfalskeproduktsåharviklartåbyggeetbrandsomfolkstolerpå,imotsetningtilalledeandre,f.eks.Lazadasomerdetstørste-commerceselskapetsomselgeraltmulig.Degirblaffenomdeterfalskt,deskalbarehaalt.ErikkeogsåLazadaeidavRocketInternet,burdeikkedehalittsammemindsetsomdere?Nja,deharenlittannenmodellennoss.Derhandlerdetbareomåselgealt.Deharvel3millionerprodukterelleretellerannet.DetskaljoblidetnyeAmazonderdeharabsoluttaltuansetthvaduleteretter.Såvidistansererossveldigkraftigfrade.Viprøveråhahøykvalitet,færreprodukter,menhellerbedrekvalitet.Sådeterkanskjeenavdegreieneviharfokusertmyepåsomoveråreneharhjulpetossåbyggeoppetganskebrabrand,ogatfolkstolerpåoss.Enannengreieerjooperationsorganisasjonenviharbygd,somgjøratviharenmyebedrekundeopplevelseheleveien,istedetforatvisenderpakkengjennometlogistikkselskap.Detgjøratvikanleveredirektetilkunden,ogermyebedreenndeallerflesteandreselskapervikonkurrerermot.Lazadahargjortdetsamme,mendeharikkelikestordekningsomvihar.Vilevererca60%avpakkeneselv,ogpådenmåtenkanvivitemeromnårkundenfårvarenogvikanforhåpentligvisleveredenmyeraskereenndeandre.DetbetyrmyeforIndonesere.Detbetyrenganskestorkonkurransefordel,fordettarganskelangtidåbyggeenlogistikkvirksomhet.Detkosterogsåendel.Entredjetingerprivatelabelenvår.Viharsiden2013hattetegetprivatelabel,viharegentligflere,viharvel5ulikemerkevarersomviproduserer,selger,ogdesignerselv,somegentligerganskebra.Vierenavdefåstoree-commerceselskapenesomharlaunchetprivatelabelsomfungerer.Ca30%avdetviselgererprivatelabel,ogderharvijomyehøyeremarginerogkvalitetenermyehøyereenndetdukankjøpeiIndonesia.Vikanogsådesignedettilåfyllegapiproduktsortimentetvårtsomviikkekanfinnegjennomlokaleellerinternasjonalemerker.Såvikandesignetingsomikkeeksistererellersomdeterhøyetterspørseletter,ogdesignesomvifølerpasserbratildetlokalemarkedet.Detharjoværtveldigbra,ogervanskeligåreplikere.Detservijosomforholdsomkommertilåværeenstordelavvirksomheteniallevigfremtidegentlig,somgirossenheltannenøkonomienndespillernesomeravhengigeavåkjøpefraandreetablertebrands.Enannentingsomerenannenressursvihar,somerveldigviktigånevne,erSEO.SEOharvigjortsidendagen,ogdeterjoetskikkeliglongtermgame.DettarveldiglangtidåutviklebraSEO,ogvierantagelig,sammenmedLazada,deenesteiIndonesiasomergodepåSEO.Detkommertilåtaårførnoenklareråtaossigjenpådet.Såhvisetselskap

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starteridagsomerkjempebra,såklarerdeikkeåtaossigjen,ogdekommertilåbrukeårpååidetheletattfåbraSEO.Sådeterenkjempekonkurransefordelsomnyetablerteselskaperernødttilåkjøpesegtil.Mankanjokjøpeadssomerveldigkostbartoglitebærekraftigpålangsikt.Viharetliteteaminhousesomsitterogjobbermedcontentogoptimererhvertenestebrandoghverenestebrandingpage,ogdeterfullstendiggratis,ogdeterjokjempebraåha.Jegerikkesikkerpåomduerklaroverdet,menZaloraerdelavenstørregruppesomheterglobalfashiongroup.Denkonsolideringenskjeddeveli2015mendetharalleredebegyntåskjeganskemyegreier.Vifårveldigmyelæringfraandreland,regioner,tilogmedfraRussland,frasørAmerika,fraMidtøsten,fraandreventuressomprøveråbyggenøyaktigdetsammesomoss.Såvifårutroligmyelæringfradem,ogdethenderogsåatvifårtalentfradem.Deterjoenstorkonkurransefordeliforholdtillokalespilleresomkunharsegselvogingenandreinettverketsitt.Vierjotilstedenåi28landtrorjeg,ogalleharbådefeiletoghattsuksessmedforskjelligetingdeharprøvdågjøre,sådetfårvijomyeutav.Plussatdetermyelettereårekruttereforossfordivikanselgedrømmenominternasjonalerfaring.DetfinnesmangesuksesshistorieromIndonesieresombarereisertilvidtforskjelligelandogplutselighardeenkjempebrajobbiIndia,sådeterjotingsomlokalespillereikkekantilbysineansatte.HvemerdetdereserpåsomderesstørstekonkurrenteriIndonesia?MankanjonestenikkesiatLazadaikkeerenstorkonkurrent,fordideselgerfashionklær,ogdeerallerstørstiIndonesiapåsalgavaltonline,såjegvilsiatdeharstørstmarkedsandeletterosspåonlinefashion,jegviltrodet,deerganskestore.Hvameddesombaredrivermedonlinefashionretail?Deteregentligingensoleklarestorekonkurrenteridagpåfashion,sådetergeneralmerchandiserssomselgeraltsomerdestørstekonkurrentene,ogdaforeksempelLazada,mendeerfortsattlangtunnaoss.MenkanskjedetjegvilsepåsomdenstørstelangsiktigekonkurrentenerensomheterMAPeMall.Grunnentilatjegserpådesomdenstørstekonkurrenten,ikkefordideerstoreenda,mendekanpotensieltblienganskestortrusselforossfordidetere-commercesatsingentilenveletablertdepartmentstore.DeteretselskapsomharværttilstedeiIndonesiai50årsikkert,ogdeharlisensenforsalgavnestenalledestoreinternasjonalebrandssomTopshop,H&M,Zara,Mango,osv.Absoluttalledemerkevarenesomvihardrømtomåha.Detvilsiatdekanbestemmesegforåhafulleksklusivitetavsalgavalledissebrandseneognekteåselgeviaoss,sådaervijoienlittekkelsituasjon.Foreløpigserdetutsomviklarerfintåholdedepåavstand,mendetkanblidenstørstekonkurrentenvårpåsikt.HvamedBerrybenkaforeksempel?Deerganskesmå.Devarveltilstedeførvistartetfaktisk,menvitokganskerasktposisjonenfrademsomdenledendefashione-commerceretailer.Deharvokstganskemyesaktereennoss.Viervelsikkertfiregangerstørreenndem,sådeerabsolutttilstedemendeharikkepålangtnærlikestorfundingsomoss,såvikommernokbaretilåvoksemerogmerfradem.Menja,deterkanskjedenmestlignendekonkurrentenmedtankepåbrandpositioningogsortiment.InntilMAPeMalletablerte.Deeretganskeliktselskapiformatdebareselgeronline,deharsinegenprivatelabelsomikkegårspesieltbra.Deharjovistseg,menjegtrorfortsattvier4gangerstørreenndem.

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Vildusiatkonkurransenerstor,generelt?Ellerharderekontroll?Genereltsettviljegsiatkonkurransenerganskestor.2015vardetåretdadetbareeksploderte.Detkommernyekonkurrenternestenhverenesteuke,mendetsomerinteressanteratdetkommerstortsettselskapersomprøveråtahelee-commercekaka,deerlitefokuserte.DetvilsiatdekonkurrerermedLazadabasically.Sålengeviklareråholdeenbrandpositioningsomdifferensierersegfraalledeandresåtrorjegvierienveldigbraposisjon.Detsomblirhovedfokusetvårtnåeråfokuserepåfashionoghadetbestesortimentetmeddenbestemarketingen,såtrorjegfortsattviklarerådistansereosssåpasmyefradenvoldsommekonkurransenogalleinvestorersombarepumperinnpengerilandet,tilatviskalklareåkommeossgodtutavdet.JegtrorLazadaslitermerpådensiden.Deerfortsattkjempestoreogersoleklartstørst,mendekommeralltidtilåmåttekrigemotnyestart-ups.Harderenoenspesiellemetoderforåholdepåkunder?Typmedlemskapellerlignende?Viharabsoluttmyeoppleggpågang.Viharingenlojalitetsprogramenda.Viharvurdertdet,menforeløpigharviikkelaunchetetegetlojalitetsprogram,mensomjegtrorerveldigviktigfordidetskaperenkulturforåbeholdekundenepåenheltannenmåte.Deterjoenlitenandelavkundenevåresomutgjørstørstepartenavordrene,ogdeteregentligbaredekundenesomharhøyre-purchaserate,somerlønnsomtfoross.Detkommernoktilåkomme.Kanmantilmeldesegnyhetsbrevoglignende?Viharetegetteamsomdrivermedcustomerrelationsmanagement,somihovedsakbetyrnyhetsbrevogpushnotifications,fordesomharinstallertappenvår,ogaltsomharmede-mailmarketingågjøre.Kundenesomfårnyhetsbrevervellittover1million,1,2milliontipperjegkanskje.Rundt700tusenaktivebrukere,detvilsidesomfaktiskåpnernyhetsbrevetogsjekkerdetutiblant.Vibrukerganskeavansertemetoderforåsegmenteredatabasenslikathverenkeltkundefårmerellermindreskreddersyddepakker.Viblirbedreogbedrepådet.Viernokenavdebedrepåmarkedet.Visenderutnyhetsbrevbasertpåfrequencygroups.Visegmentererheledatabaseninnifrequencygroupssombetyratjooftereduåpnere-posteneogjooftereduhandlerhososs,joofterefårdunyhetsbrevene,fordidetbetyratduerveldiginteressert.Såsegmenterervibasertpåhvormyefolkfaktiskhandlerforoghvilketyperbrandsmanhandler.Dererviganskeavanserte.Detfunkerveldigbra.Deterenstortrafikkdriverogekstremtbraforstorehappeningsogkampanjer.entingsomerveldigspennendeogsomskjeddeifjorvaråprøveåflyttesåmangesommuligkunderovertilappenvårfordidaharviutroligmyebedrekontrollpådem.Detersomåløseennyhetsbrevkabal,fordisenderduenpush-notificationsåerdetekstremtverdifullt,duminnerdempåatvieksisterer,dukansendetailoredpushnotifications.Vigikkfraåha15%avtransaksjonenepåapptilrundt70%påsluttenavåret.Sånåerdeallerflestkundenevårepåapp,ogdeterdritbra.Utroligmyelettereåfåfolktilåkjøpemerogdeterlettereåengasjerekundeneogså,sådeterbra.ErdetmangesomharsmartphoneiIndonesiaiforholdtilhvormangesomharpc.Ja,absolutt.Deungeharvelkanskjehoppetover”pc-tiden”

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Ja,deallerflesteharhoppetoverogdenyesomkommerinnpåmarkedetsomhartilgangtilinternettgårrettinnpåtelefonensittinternett.Deterganskefasinerende,ogdetvardetviinnsåogså;atskalduvinnemarkedetiIndonesiasåmåmanværestørstpåmobil.Sådeterderviputterinnmestepartenavkruttetvårt.Jegtror80%avdesomhartilgangtilinternettkunhartilgangfraensmartphone.DeterifølgeGoogle.Ellerssåerviganskestorepåsocialmediasomogsåaktivererkunderogerenkanalderfolkseratvihargodetilbudogsånneting.Hvorstorfareerdetfornyekonkurrenter?ErdetnoenetableringsbarriererforåkommeinnpåonlinefashionretailmarkedetiIndonesia?Neiegentligikke.Veldiglitebarrierer.Deterbareååpneennye-commercesideimorgenomdevil.Demåbarehaetteamsomkangjøredetogetnettverkforåfåtilgangtilleverandørersomselgerdebrandsenesommanvilselge.Detgjelderbareåansettefolksomhardetnettverketfrafør.Detharjogjortatdetharblittveldigcompetitiveidetsiste,fordeterganskeenkeltåstarte.Hvamedthenegativelist?Detervellettereetteratonlineretailblefjernetfrathenegativelist?Ja,selvfølgelig,detvarenetableringsbarrierefør.Denetableringsbarrierenharblitttattbort.Detsomerviktigåmerkesegeratie-commercesåmåmanhaskalaforålykkesogblilønnsommehvismandriverretailihvertfall.Detfinnesnoenmodellersomkanlykkesutenåværemassivtstore,menmanmåblistore,ellersgirdetingenmening,manmådekkeallefastekostnadervedåhaetteam:kontorogvarehusogalledegreienesomkreveratmanerganskestore.Vijobbermedåfåskala,ogharikkekommetditenda.Vikunnenokværtlønnsommenåhvisviville,menvivelgeråvoksevidereoginvesterevidereiselskapetforåkunnegjøredetenklereåblilønnsommeifremtiden.SådaerdetlittvanskeligåstarteoppensuksessfullnettshoppingsideiIndonesia?Ja,deterlettåstarteopp,mendetervanskeligåfåsuksess.DeterjoingensomerlønnsommeiIndonesiaenda.jegtippervikanskjeikkeernærmest,menvierhvertfallikkeblantdeverste.Lazadaerjoforeksempelsinnsyktlangtfraåværelønnsommefordidebaregårforåværestørst,ogsåfårdetenkepålønnsomhetsenere.Deterjolittsånnsomvitenker,vimåbareblistørstoghavolumenesomkangjøreresten.ErkundeneiIndonesiaspesieltprissensitive?Ja,ogdeteretstortjamedutropstegn.Deerekstremtprissensitiveogekstremtopptattavdiscountsogsalgsådeternestenetstortproblem.DeersåopptattavdetatdeallerflestelokaleleverandørenedrivermedenprisstrategisomikkeengangerloviNorge.Nårdetkommeretheltnyttproduktpåmarkedetsåerdetalleredepåsalgfradagén.Sådetvilsiatdeterikkeektesalg.Vifårjonewarrivalsmed50%avslagfordidetersånnalledriverher,sådeteretveldigdiscountfokusogveldigprissensitivt,ogdetmerkerviogsånårvigjørprising.Vitrengerikkeengangåsetteoppenkampanjeforetbrandnårvisetternedprisenforatfolkskaloppdagedet.Viharhattetparfeilmedprisingdermanplutseligharsattnedpriseneutenatdetvarmeningenpåetparbrandsogsåfinnerviutavdetvedatsalgetgårvanvittigopp.Deterveldigfåsomhandlerutenåhadiscountkupongerellervouchers,deteretveldigdiscountfokusDifferensiererderederemedprodukteriforholdtilkonkurrentene?

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JaviharjodetbesteutvalgetavfashioniIndonesia,detmestkompletteutvalgetviljegsi.Vihardetmesteavinternasjonalebrands,ogsåharvideallerflesteavdestorelokaledepartmentstorebrandssomermyebedreenntypberrybenkasitt.TilogmedMAPeMallharfortsattveldigdårligutvalgavlokalemerker.Dehardestoreinternasjonale,mendeharlangtifrasåmangeandremerkevarersomerlokaleogmerkevarersomdeendaikkeharisinportefølje.Viharganskemyebedreutvalgenndeandre,mendetervårstørsteutfordring.Deterderviharmestpotensialepååforbedreoss.VijobbermedMAPdaginnogdagutforåprøveåfåtilgangpåflereavderesbrands.Deterenongoingprosess,ogviprøverhverenestedagpååfådetbedre.Merkerdereatkundeneerfornøydmedutvalgetavmerker?EllerfårdereforespørsleretternyemerkerVifårforespørsleretternyemerker.Deerjoganskefornøyd,viharjonestenalltidværttheplacetoogforfashion.Deterditdegårhvisdevilhaetstortutvalgavmerkevarerogbrapriser.Detviljegabsoluttsi,menviharjoenbrandwishlistsomviberalleomåfylleutiforbindelsemedetkjøp.DaerdetmangesomsvareratdeskulleliktåsettZaraforeksempel.Deterdensomergjengangeren,ogetparandre.Deterstoretterspørseletternyebrands,menvijobberpåsprengforåfådeminnpånettsidenvår.Hvemerderesleverandører,ialleformer?Detjeghartenkterklesleverandører,leverandøreravpakkeleveringstjenesterogdesomlevererderesonlinepaymentsystemer.Erdetsååsiriktigåsiatdeterdetrestørste?Ja,jegvilsidet.Vårestørsteleverandørererjobrandsenevijobbermedogsupplierspåproduktsidenogdehartradisjoneltsetthattmaktoveross,mendeterjoiferdmedåsnufordiallebegynneråinnseate-commercekommertilåblistort,ogvierdestørstekundenderespåsalgpånett,såjostørreviblirjomermaktfårviogdetmerkerviveldigstorforskjellpåiforholdtilfortoårsiden.Vikanveldigmyeletterereforhandleogvikantilogmedkreveenhøyeremarginforproduktenesomviharsolgtheletiden,barepågrunnavatviharblittganskemyestørremedårene.Deharjoselvfølgeligveldigstormakt,spesieltmerkersomNike,Adidas,Mango,NewLook,Factory,alledestoreinternasjonalebrandsharjovanvittigmakt,deerdetjovanskeligåknekke.Veldigmangestorelokalebrandsharvimerilommavårsidendebegynneråbliganskeavhengigeavoss.Ogdetsammeegentligpålogistikksiden.Viharjo,pågrunnavatviikkeønskeråværeforavhengigeavdemmedviljeeskalertoppvåregneoperationsorganisasjon,rettogslettfordidehaddemyemaktogdårligkompetansepåe-commerce.Detvarendårligkundeopplevelsevifikkgjennomdemfordidettokforlangtidogdetvarnulloversikt,ogdekunnekreveganskehøyeprisersidenviikkehaddeetalternativ.Mennåharvibygdvåregenoperationforåunngååbliprisetavlogistikkselskapeneogplussatviharøktvolumeneganskebetraktelig.Vifårbedreogbedrebetingelserderog,sådeterabsoluttmangefordelervedåvokse,detmerkervi.LeverandørerkanogsåværeFacebookogGoogle,daviinvesterermyeipaidonlinemarketinggjennomderesadvertisementplatformsForderebliretterhvertmerviktigefordemenndeblirfordere?Ja,ibegynnelsenhaddevijoingentingåsi,ogtakketgudforatdeidetheletattgaddågjøredetfoross,mennåerdetblittsånnatdeeravhengigeavoss.deharskalertoppsinvirksomhetforåleverepakkerfoross,oghvisviplutseligflyttervolumovertilenannenleverandørsåmisterde

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enstordelavvirksomheten.Jostørremanerjostørreforhandlingskraftharman.Vibegynnerjoåkommeditatdeeravhengigeavosslikemyesomvieravhengigeavdem.Erdetnoenandregrunner,trordu,tilatdereerdetledendeonlinefashionretailselskapetiIndonesia?Kortoppsummertkanjegsitreting:vivartidligute.Haddevikommetnåhaddeviantageligikkelykkes.Detandresomerganskeconnectedmeddeteratvigjordemyefeiltidligiprosessenoglærteavdet.Startermanidagsåbegynnermanjomedågjøreendelfeil,manvetjoikkehelthvamanbegirsegutpåogmanmågjørefeilforålære.Detgjordevijounnaførdestørstepotensielletrusleneetablerteseg,såvierferdigmeddenstørstelæringsperioden.Viharhattenganskebramarkedsføringogbrandpositioningstrategi,vivartidligutemedtvreklamerogblesponsetavAsia’sNextTopModelogmassesånnegreiersomikkebaregjordeatviblesynlige,menatviblesynligepåenlittannenmåteannetennåbaredriveadvertisement.Viersynligeoveralt,såjegtrordeterdetreviktigstetingene.Ellerplussoperationsbitenderviharfrykteligbraleveringsbetingelseriforholdtilkonkurrenter,ogdetharmyeåsinårviskalleverevarerfort.Hvismanklareråleverepådetsåerdetdefinitivtenbrabrandpropositionforkunden.Overtilmarkedsføring.Hvaerderesmålforselskapetiforholdtilmarkedsføring?Påmarkedsføringensåhardetheltklartsidendagenværttodelt.Detførsteerfokuspååvoksevoldsomtfort,ogdetharværthovedfokusetfradagéntilZalora,ogspesieltiIndonesiaderviskjønteatdetkomtilåblicompetitivesåvimåttebarevokseogblistoresånnatdetblevanskeligforandreåkommeinnpåmarkedet.Såvekstharværtdetstørstefokusetheletiden,menpåenannenmåtesåerdetjoåetablereosssommerennbareenonlineretailermenogsåetfashiondestination,ogåvære”thegotoplaceforfashionclothing”,oghøykvalitetmenbrapris.Harderenoenfremtidigemålderestrekkerdereetter?Visjonenvåreråvære”theleadingfashiondestinationiSoutheastAsia”,åværedetførstestedetfolktenkerpånårdetenkerpåfashiononline,åværeenGoogleforfashion.IstedenforågooglevilviatfolkskalgådirektetilZaloraforåfinnedetdeleteretter.Derharvikommetganskelangtallerede,menvimanglernokmyeavproduktsortimentetførvioppnårdetmålet.Hvamedmålgruppenderes?Jegvillekanskjesagtatmålgruppenermerentypografiskgruppeellerposisjonennendemografiskgruppeidenformavatvivilikkenødvendigvisfåpåossatvitargeterfolkmellomenvissalder.Kundenevåreerjotypiskmellom18og35år,deterderca80-90%er,menvivilikkenødvendigvishadetsånnatvibareselgertildendemografiskegruppen.Viermeropptattavåhakundersomerfashionfocused,someropptattavfashion,atdeerteknologiskutstyrt,iformavatdeeierenmobiltelefon,ernetthandlere,ogatdesetterprispåbrakvalitetiklærtilbrapriser.Menmålgruppenvår,ellerkundegruppenvåridag,er18-35år,ogerinteressertihighstreetfashion,someraffordablefashionkandusi,somsikkerttopp10%avIndonesia’srikesteharrådtilåhandlehososs.Hvamedkjønnsfordeling?

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Viharvelkanskje65%kvinnerog35%mennviljegsi,tiltrossforatmenneneikkevilinnrømmedet.Deterjomeransettsomenjentesideennengutteside,littpåsammemåtesomZalandotidligere,mensomnåharklartåre-brandedettilåblilittmerforbeggekjønn.Manvillekanskjetroatmennliktebedreåhandleonlinesidendedaslipperågåibutikk.Deteretveldiggodtpoeng.TilbaketilhvasomskillerIndonesiafraandrelandiforholdtile-commerce:etviktigpoengåleggetildereratdetersettpåsomenpositivaktivitetådratilkjøpesentreihelgene.HvisduspørhvafolkgjørihelgeneiJakartasåsiermangeatdehengerpåkjøpesentre,deterderdemøtervennerogdeterdetdebrukerhelgensin.Deterjoenstortrusselfoross,detmåviprøveåendre.Vimåfådettilåvirkesomatdetermerconvenientåhandlepånett.Deflesteutenlandskeherhaterjoågåpåkjøpesenterfordideterveldiginconvenientådraditfordidetervanskeligåkommesegdit.Determassivtstortogbarekjasogmas,såmanvilletenktatdetskulleværeenkeltåoverbeviseIndonesereomåhandlepånett.Problemeteratdetertrendyåhengepåkjøpesenter.Folkforetrekkerådratilkjøpesenterfordideterkult.Dehargjerneikkeetstedåmøtevennenesinefordifolkerjogenereltsettganskefattigeherogborhosforeldrenesine,sådetervanskeligåbevenneroverogdamøtesdehellerpåetkjøpesenter.Deterenlitenutfordring,mensålengeviklareråoverbevisedemsågårdetjogreit.Hvamedprissegment?Vierkanskjefortopp10%rikesteiIndonesia,somkanskjeer25millionermennesker,ogdeteraffordablefashionvilikeråomtaledetsom.Deterikkespesielthighend.DeterhøyereennH&MiIndonesia,fordidetergenereltlaverekvalitetpådetmesteher,menkanskjelittsånnZara-aktig?Deter10%sombetalerinntektskattiIndonesia,restenharikkehøynoklønntilåkunnebetaleskatt,sådeteretveldigfattigland.HvoroghvordanreklamererdereforZaloraiIndonesia?Detertodelt.Viharonlineogofflinemarketing.Derharviflereteamsomjobberpåhveravdetotingene.Hvisvistartermedonlinemarketing;folkkjøperjoutroligmyemarkedsføringgjennomsosialemediersomGoogle,Facebook,Twitter,Blackberrymessenger,somerganskestorther,ogGoogleAdwords,Googledisplaynetwork.Debrukermyere-targetingidenformavathvisduharbesøktnettsidevårogsågårduinnpåenannenside,foreksempelenbloggelleravispånett,såfårduoppZaloraadsder.Erdetbrukavcookieselleralgortimerda?Ja,brukavcookies.Searchenginemarketing(SEM)erdenformatdukjøperdegplassforeksempelpåGoogleøverstellerpåsiden,sånnathvisdusøkerpånoesomerrelevantfordenadiGooglevildufåoppenZaloraad.Manbyrpåkeywords.Vibrukerveldigmyepengerpåonlinemarketing,paidmarketing,ogdeterjofordideterekstremttargeted,dutrefferjofolksomeronlineogfolksomtypiskhareninteressefordet.Detkansegmenteresganskebrapåbakgrunnavgeografioghvadukjøperpånett.Detbrukermyeinfofordelaktigforåtargetederiktigefolka.Viblæsterganskemyecashpåonlinemarketing-altmede-mailmarketing,sosialemediaogsånnetypeting,ogsåharduSEO.SEOharvijobbetaktivtmedi4årogviharenpersonsomerekstremtgodpådet,somerskikkeligontopofthegameogharfåttossien

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posisjonsomdetkommertilåtamangeårforandreåtaossigjen.ForallerelevantesøkeordfolkputterinniGoogleogandresearchenginessåskalvikommeheltøverst.Hvaersåforskjellenmellomdenøkkelordenederebetalerforåfåhøytopp,påGoogleforeksempel,ogSEO?DetertoforskjelligeformerforSEM.SEOerdengratisversjonensomerdenabsoluttviktigsteogmestbærekraftigedelenavSEM.DetfungererpådenmåtenatviharetteamsomsitteroglasternedGooglesinsearchhistoryforIndonesia,altavsøkeord,ogdetergratisforalleålastened.Såbrukerdeallsearchhistory,gjerneforenspesifikktidsperiode,foreksempelenhøysesongsomjulellerramadan,ellernoesøkesjoogsåpåkonstant.OgsåbrukerdedensearchhistorientilåsamlemassepopulærekeywordssomerrelevantefordennettsidenpåZalorasomdeharlysttilåoptimere.LaosssiNikesinbrandpageinnepåZalora.Såprøverdeåfinnepopulære,relevantesøkeordogsåskriverdeenartikkelomNikemedbrukavmangeavsøkeordenesomdepublisererpåNikesinbrandside.OgsåharGoogleenheftigalgoritmesombaresøker…såmedengangdupuncherinnnoeiGooglesåvildensøkegjennomekstremtmyedataforåfinnedetmestrelevantesøkeordetfordetduhartastetinn.EnavtingenesomGooglegjøreråsveipegjennomaltavrelevantenettsidersomfinnes,ogsåblardegjennominformasjonensomviharskrevetogavgjørhvorvidtdeterenlegitartikkel.Dukanikkebarepuncheinnmassekeywordssomikkegirmeninghvisenbrukerskallesedet,detmågimening,ellerkandublistraffet.SåvimåleseossopppåallereglenehvergangGoogleendreralgoritmensinforåpassepåatvifortsatterihenholdtilreglene.DetersånnGooglevilatviskalsetteoppnettsidenvårforatviskalfåtrafikk.SåhvismanfølgerGoogleregelverketsåfårdumassegratistrafikkfraGoogle.HvisdusøkerpåGoogleetterf.eks.Sepatufashion,sombetyrfashionskosåfårmanoppenZaloralinkmedadsymbolpå.Detbrukervioftepåallerelevantesøkeord.Vibrukerdettilogmedpåkonkurrentenevåre,hvisvimeneratdeterrelevantfoross.Harderenoennøkkelordsomdukanavsløreatderebruker?Vibyrjopåkonkurrentenevår,littavhengigavhvordandetliggeranperformance-messig,menviharjobyddpåLazada,berrybenkaosv.Allebyrpåhverandresnavninnimellom.Detersyktirriterende,mensånnerdetbare.Fornyesdissenøkkelordeneheletiden,ellerhvorlengeharderedissenøkkelordene?Detsitteretteamsomkonstantprøveråfinneuthvasomfungereroghvasomikkefungerer.Debyrpåsøkeord,ogserhvasomerdyrtoghvasomerbillig.Ogsåserdepåomdetfunkerellerikke,ommanfårreturnoninvestmentellerikke.Hvorlengestårenadderhvisdereharbyddpåden?Deteraltetterhvavibestemmer,vikankjøpeforenukeellerendagellerenmåned.Harderenoenspesielltaktikkbaktilbudeneogkampanjenedereharforkundenederes?Detertredelt.Førstogfremstpushervistortsettkampanjersomharhøyperformance.Vivillealdritattoppetbrandpushpånettsidenvårsomikkeharetbrasalg.Viputterbareopptingsomselgerbra.Detmåværeenganskehøyverdiforossåputtedetopp.Denandredelenavdeteratvibrukerinventorymanagementtools,typisknårviharutroligmyevarerfraetbrandeller

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fraenkategori,ellertingviikkeklareråselge,såprøverviålageenellerannenformforpromotionsomfårdettilåselgeraskere.Dentredjeeratviselgerplassenevåre,bannerenevåre,tilsuppliersenevåre.F.eks.medNikesåkanvigåtilNikeogsiatvivurdereråpusheNikefradenogdendatoentildenogdendatoen,sienuke,hvisderevurdereråsettenedprisenogsendeensalgskampanje,såkanviværevilligetilåpushedere100%ogsåhardeflestelysttildet,såpådenmåtensåselgerviikkeiformavpenger,menvitraderdetmotbedretilbudfraleverandørenevåre.Men,planenogtankeneratviskalbegynneåselgedetforenpengesumsånnatNikekankommetilossogkjøpehovedkampanjenvårforenuke.Måletvårteråegentligselgeellerhaallebannerepånettsidenogpåappentilsalgs,slikatdekaninngåenforhandlingmedossforåkjøpebannerspace.OgdervilvinoksnartvurdereåsetteoppenZaloraadservicetjenestehvorbrandskankjøpekampanjer.Kunforbrandssomviselger,ogkunbrandssomperformerganskebra.Vivilikkeselgeplasstiletbrandsomikkeselgerbraellersomhardårligkvalitet,sådetblirjoenvissformforsegmenteringavbrands,derkanskjekuntopp30-50brandsfårlovtilåkjøpeplass.Hvisingenkjøpersåpushervibaredetvifølererbest.Vivilikkeofregrowthmotåpushedårligebrandsfordetskaderpåenmåtebrandetvårthvisvibegynneråpushedårligebrands.Detviktigsteforosserjoåvokseognåservipådetsomenmulighettilåpushebrandssomviegentligellersogsåvillepushetogitilleggfåbetaltfordet.Fordetvisersegatdeterganskestoretterspørseletterdetogviseratvikanselgetilbrandsviuansettvillepushetmye.Detblirjoennybrandingindustrifoross,åbegynneåselgespace.Avslutningsvis,erdetnoedukunnetenkedegvilleværenyttigforZaloraåundersøkemer?Deterjoganskemyeforskjelligetingoghjelpemidlermankanbrukeforåforbedreinternettmarkedsføring.Viharnokprøvdutdeallerflesteformeneforpaidmarketing.Engreiesomjegtrorerdenallerviktigstedelenfremovererdetsomkallescontentmarketing,somviikkeersåveldiggodepåenda.ViharSEO,somercontentmarketing,mendetermestinternalcontentmarketingidenformatvibyggercontentpåvåreegnenettsider.Mendetviburdesatsemerpåimineøyneerexternalcontentmarketing-bareværetilstedeabsoluttoveralt.FornårmanbetalerforadsgjennomGoogleogFacebookosv.,sålånermanadspaceogdendagendustopperåbetaleforsvinneralleassetsfraFacebookogGoogle,menhvismanbetalerforåblipublisert,typiskgjennombloggcommunitiesellergjennomåbetalefornyheter,altmuligsånt,ermanbaretilstedeoveralt.Istedetforåleieadspace,såkjøpermanadspace.Dettrorjegerdenviktigsteogmeststrategiskekonkurransefordelenvikanbyggepålangsikt.Forhvisenbloggerellerenavispubliserernoeomosssåvildetværetilstedeiallfremtid,ogjomertilstededuerjoletteresynligerduogjovanskeligereerdetåtaposisjonendin.ErbloggingstortiIndonesia?Villemarkedsføringgjennombloggingværtlønnsomt?Ja,deterfrykteligstort,ogdeerveldigmottakeligforåpubliseresålengevibetalerellersenderetprodukt,såvigjørdetveldigmye.Menikkeienstornokgradimineøyne.Budsjettetburdenokblittøktganskebetrakteligdersynesjeg.Grunnentilatviikkegjørdeterfordideteretsåpaslangsiktiggameatvitenkermerpåvekstidagogdaerdetmyebedreåbrukepengenepåpaidmarketingsomtriggerraskvekstfortere.Duskaljoikkesebortifraatviforsøkerågåpåbørsomikkesåaltformangeår,ogdalønnerdetsegåkunnevisetilhøyvekstogpositivlønnsomhetsutviklingoverflereår.Contentmarketingviljoselvfølgelighjelpetilpåveien,men

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dettarveldiglangtidåbyggeetskikkeligstortnettverkavinformasjonomZalora,sådeterlittderforvifokusererlittforlitepådetidag.Såifremtidenvildetværemerfokuspåcontentmarketing?Ja,dettrorjegabsolutt.Hvismanskalvinnemarkedetpålangsiktsåtrorjegcontentmarketingerdetabsoluttbestekortetåbruke.Såimineøyneburdedetbrukesmindrepengerpåpaidmarketingogmyemerpååkjøpeadspacesidendudablirderievigtid,hvisdupubliseresoveralt.Detervelenavdestørstestrategiskevalgenevikanta.Hvamedforskjellenpåinventorymellomdereogtradisjonellebutikker?Ja,viharveldigmyestørrelager.Nåharvi1,2millionerenheterpålager.Enstorklesbutikkharvelkanskjeetpartusenprodukterogviharvel110tusenunikeprodukterkanskje.Detblirjoenkostnadfordere,hvisderevilexitemarkedet,atdereharsåmangevarerpålager.Ja,absolutt,ogdeterlittderforviikkeharaltpålager.Businessmodellenvårderertredelt.Detførsteerdirectpurchasesomerdentradisjonelleretailmodellen.Dakjøpermanfraenleverandørdirekteogfårdetinnpålager,ogsåkommerdetopppåbalansendinsomenliabilitysånnatforåkuttedenmåduentenselgeelleravskrivedetpåetellerannettidspunkt,sådererdetjoganskehøyinventoryrisk.Derprøverviåværelittsparsommeogikkekjøpeproduktersomikkeer”provenwinners”,såvikjøperstortsettgodeproduktersomvivetselger.Såharduenannenformsomheterconsignment.Consignmentbetyratleverandørereierproduktet,menputterdetpåvårtlagerforatdetskalværelettereåfåshippetdettilkunden.Ogleverandørenbeholderproduktetpåsinbalanse,slikatviikkeeierdet,menselgerdetpånettsidenvårogtarcommissionellerandelforatviselgerderesprodukter.Deterenmåteåredusererisikopå,fortingviikkeselger.Mendafårmantypisklaveremarginerennhvismanselgersomdirectpurchase.Detersomregeltingsomikkeselgerlikebra.Dentredjemodellenermarketplacesomerheltfrittforrisikooverhodet,detvilsiatleverandørenbeholderproduktenepåsittvarelager,såviseraldriproduktet,kunnårvifårsamplesforåsjekkekvalitetentilproduktene.Vieierikkeproduktet,vibareselgerdetpånettsidenogtarenandelhvergangviselgeretprodukt.Deterjoenveldigbramåteådiversifisererisikopå,menogsååfåbedresortimentpå.Utenåleggetilmerkompleksitet,iformatmanmåskalereoppoperationsogvarehusogsånt,såkanmanfåbedresortiment,menderfårvijoveldigmyemindremarginennpåconsignmentogdirectpurchase.Directpurchaseerdenstørstedelenavvirksomheten,ogsåerconsignmentlittmindre,ogsåermarketplacedenminste

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Appendix2

IllustrationofcurrentOVPontheentrancepageofZalora.co.id(Zalora,2016c).

E-commerce in Emerging Markets

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