My Story on Lazada and E-Commerce in Indonesia

2014 11 23 indoecomm

My newest story focuses on a rapidly expanding startup, Lazada Indonsesia, that’s aiming to be the country’s Amazon.com. The piece also looks at the promise of e-commerce in the populous country.

It begins:

JAKARTA—Executives at Lazada Indonesia, a fast-growing e-commerce startup aiming to be the Amazon.com of Southeast Asia, faced a couple of unexpected challenges when they opened a cavernous new warehouse outside Jakarta last year.

The executives, who hail from Europe, were forced to build a special, refrigerated room after realizing that some perfumes they stocked were evaporating in Indonesia’s tropical heat.

Then there was something even more surprising: Staffers were forced to hold a special ceremony to rid the warehouse of what the staff feared was a ghostly presence lurking in the facility.

Challenges are par for the course at Lazada Indonesia, founded in Jakarta in 2012 and partly funded by Rocket Internet AG , a Berlin-based tech incubator that went public last month. Indonesia’s e-commerce market is still small, and Lazada had to build a lot of what it needed from scratch. But the company is plowing ahead so it can get a head start in the country over international giants like Amazon.com Inc., Alibaba Group Holding Ltd. and eBay Inc.

Meanwhile, I wrote an accompanying post for our Digits blog about some of the local competitors Lazada is battling in Indonesia:

E-commerce startup Lazada is moving quickly in its quest to become Southeast Asia’s Amazon.com.

But as the company expands its operations in populous Indonesia — which analysts say is on track to be the region’s most lucrative market — it’s battling not just big multinational players like the Seattle-based behemoth. It’s also competing with some popular homegrown sites, too.

Lazada Indonesia, a business-to-consumer site founded in 2012 that offers everything from Xiaomi smartphones to bedding and badminton rackets, sees more visitors than the likes of Amazon, Alibaba and eBay in Indonesia, according to data from research firm SimilarWeb.

But several local shopping sites, little known outside Indonesia, are also hugely popular in the country of more than 240 million people.

At the top of this post: An image I snapped inside Lazada’s warehouse outside Jakarta.

Consumers in India Can Now Pre-Book Their Whoppers — on Ebay

That’s the subject of a story I wrote today:

Indian consumers have in recent months shown a penchant for ordering goods like smartphones in short-lived, online sales called “flash sales.” Now Burger King is trying to get them to pre-order its sandwiches — on eBay.

In an apparent attempt to tap into the popularity of flash sales — Chinese smartphone maker Xiaomi says it has sold more than 500,000 of its low-cost handsets in India using such methods since July — Burger King is allowing customers to pre-book its Whoppers via online marketplace eBay.

The world’s second-largest burger chain after McDonald’s is set to open this month for the first time in the populous country. Cognizant of the religious practices of Hindus and Muslims who comprise the majority of the country’s population, Miami-based Burger King late last week said it would offer chicken, mutton and vegetable versions of its signature Whopper sandwich.

Through Wednesday, customers can pay a promotional price of 128 rupees ($2.08) with a credit card, debit card, or online bank transfer for a Whopper. (It’s unclear how much of a discount the price represents.) Buyers then receive a voucher via courier that they can redeem at a new Burger King shop in New Delhi’s Select City Walk Mall when it opens on Sunday. Those who order the sandwich also receive a T-shirt.

Apart from the discounted price and the shirt, however, it is unclear why consumers would buy the sandwiches online ahead of time, when they could presumably be bought quickly in the restaurant.

Click through to read the rest.

Embedded above and online here: A video in which I talk about Burger King’s campaign and flash sales in India.

A Warning for Southeast Asia’s Brick-and-Mortar Retailers

I wrote a recent WSJ Digits story about how e-commerce in Southeast Asia is set to boom, according to a UBS report:

Message for Southeast Asia’s brick-and-mortar retailers: E-commerce companies could soon be eating your lunch.

That’s according to a recent study by UBS , which showed the region’s consumers are already flocking to e-commerce sites at the expense of traditional retailers’ platforms.

Internet penetration in the populous region is higher than many assume, and will soon skyrocket thanks to the increasing use of low-cost smartphones and the availability of mobile Web connections, according UBS’s head of research and strategy in Thailand, Raymond Maguire, who authored the report.