Thursday, February 25, 2021

[Infographics] 16 Indonesian E-commerce Companies That Have Died Since the 2000s

The Indonesian e-commerce industry looks very prospective, but not all players in it have managed to reap the benefits.


The handicraft e-marketplace platform called Qlapa finally closed its operating services after being active for almost 4 years in the country's e-commerce industry. Qlapa is not the first to come out of this internet-based trading industry. In fact, there are many companies that have passed in the realm of Indonesian e-commerce. Using recorded data from the Wayback Machine, the iPrice team summarizes e-commerce companies since the 2000s that have existed but have collapsed.



MULTIPLY


In the 2008-2010 period, Multiply was able to become a very popular social media network in Indonesia. With the intense user activity, Multiply tries to apply the e-commerce business strategy on its website. Moreover, Naspers, which is Multiply's main investor, wants to develop the e-commerce industry in Indonesia.


A marketplace platform called Multiply Commerce was released in 2011. To show its commitment to e-commerce development, Multiply also moved its office from Florida, U.S.A. to Jakarta, Indonesia. Unfortunately, the change in business strategy to become a marketplace platform did not bring any significant benefits.


One of the reasons is because Multiply is unable to respond to the problems that arise among users in the transition from the social networking business model to e-commerce. Until then Naspers stopped all investment in Multiply and switched to Tokobagus. Multiply inevitably closed its operations on May 31, 2013.


On June 10, 2014, it has filed for corporate rehabilitation to seek protection from its creditors. The company filed the petition for rehabilitation before the Pasig City Regional Trial Court (RTC). At that time, the website's social networking portion had a network of 18 million users. Liquidity problems, however, affected earnings. Sales declined from its peak of P20 billion in 2013 to just about P1 billion in July 2020.


It had suffered from a drop in new orders amid a slump in the E-commerce and social networking sector. Multiply also reportedly laid off some 12,000 workers on February 28, 2014.


GOOD STORE

Tokobagus is a buying and selling site that initially used the concept of consumer to consumer (C2C) classifieds. This means that each user can immediately upload sales posts or search for goods. Starting operations in 2005, this online buying and selling site is one of the pioneers of the e-commerce industry in Indonesia.

In 2010 this site received investment from Naspers, which at the same time owns a trading site in the global market called OLX. 2013 marked Tokobagus' golden moment. Reporting from e27.co there are 1 billion visitors per day on the site. This achievement has earned Tokobagus one of the five largest classified ad sites in the world.

Because of this glorious achievement, Naspers finally acquired Tokobagus and changed its name to OLX Indonesia in March 2014. However, OLX's popularity in Indonesia is not unlike when it was named Tokobagus. This site is less competitive with local e-commerce platforms that have emerged recently, such as Bukalapak, Tokopedia, or Blibli.

RAKUTEN

Rakuten was officially present in Indonesia's e-commerce industry in 2011 by partnering with MNC Group as a local business partner, aka a joint venture. According to Daily Social records, Rakuten has 51% shares, while MNC Group has 49% shares. The total initial investment of the two parties is around IDR 60 billion.

Rakuten's activities in the local e-commerce industry only lasted 5 years. This Japanese company stopped its activities in Indonesia in March 2016. Reporting from Reuters, Rakuten's withdrawal from the local market in Indonesia was due to a shift in the business model that was not in accordance with the original concept. The e-commerce company wants to focus more on the C2C business model.

PLASA.COM

Plasa.com started to focus on e-commerce in 2010 after previously operating as a webmail service. Funding for this shopping portal was initiated by the government through the state-owned company Telkom. A year later, Plasa.com announced its partnership with eBay. With this collaboration, products sold on Plasa.com can appear on the eBay site so that they can be widely recognized by global consumers. But in 2014 eBay bought 49% of Plasa.com's shares and followed the name change to Blanja.com.

VALADOO

Valadoo is a travel-only e-commerce site that was founded in 2010. When this company emerged, the travel-only e-commerce industry was still lacking in players. Two years passed, Valadoo managed to get early stage funding from a similar company from Singapore called Wego.

Even though it has received seed funding, Valadoo has not been able to make a clear business direction. Therefore, this company finally decided to merge with Burufly, which also received funding from Wego. But finally in April 2015, Valadoo stated that it closed all its services due to differences in culture and business models.

Also Read: [DATA] 5 Trends in Indonesian Online Consumer Behavior in 2018

SCALLOPE

Scallope is an e-commerce portal that provides a variety of fashion products from well-known young Indonesian designers. Reported by Daily Social, this company was founded in 2012 and is financed by Suitmedia Group. At that time, Suitmedia Group also oversees Bukalapak and Hijup.

However, in its development, Scallope was unable to compete with other e-commerce companies that also focused on fashion. Moreover, Suitmedia Group sees Hijup's position as more potential than Scallope. Finally Suitmedia Group went downsizing by closing Scallope in 2016.

PARAPLOU

Paraplou is a fashion-specific e-commerce site that was founded in 2011. The company received a Series A investment of US $ 1.5 from Majuven, a venture capital firm from Singapore.

In October 2015 Paraplou announced that the company was closing. In Tech in Asia's notes, factors such as an unformed market, uncertain financial conditions, and difficulties in obtaining sustainable funds forced Paraplou to leave the e-commerce business.

CIPIKA

Cipika has been managed by Indosat Ooredo since 2014. This e-commerce site adopts a business to consumer (B2C) business model with superior products in the electronics and food categories.

However, Cipika did not last long because the development of the B2C model at that time was considered slow. Indosat Ooredo officially closed its Cipika service in June 2017.

LOLALOLA

Lolalola was launched in 2015 as an e-commerce site that targets underwear products specifically for women. Funding for Lolalola was obtained from Ardent Ventures from Thailand. Unfortunately, companies that were present for this specific market were forced to stop operating in January 2017.

KLEORA

Initially, Kleora was here to accommodate the shopping needs for special products for women. This company had received funding from Rebright Partners and angle investors. But because he was unable to attract market enthusiasm, Kleora finally transformed into an e-commerce specifically for buying and selling used goods called Prelo since October 2015.

BEAUTYTREATS

Beautytreats is a beauty product online selling site that has been operating since 2013. According to Daily Social records, the company was able to deliver 3000 beauty products within 6 months of its operation. Beautytreats also managed to attract 8000 members from various regions in Indonesia. But this company didn't live long. In March 2015 Beautytreats officially stopped operating.

LAMIDO

Lamido was founded in 2013 by the incubator company Rocket Internet which also raised Lazada. This customer-to-customer (C2C) type of e-commerce site focuses on middle to lower class sellers who distribute merchandise through social media networks such as Facebook or Instagram.

The types of products that are common in Lamido include the electronics and fashion categories. But in reality, the marketplace platform presented by Lamido was less popular than local e-commerce companies such as Bukalapak and Tokopedia, which were both C2C concepts at that time. Moreover, Rocket Internet saw that Lamido and Lazada's positions overlapped in the local market. Because of this, Rocket Internet chose to merge Lamido with Lazada in March 2015.

BERNIAGA.COM

Berniaga.com is a classified ad site that focuses on doing customer to customer (C2C) business. According to Kompas.com's records, this site was first operated in 2009 with funding support from 701 Search Pte Ltd, which is a joint venture company between Singapore Press Holdings (SPH) and Schibsted Classified Media (SCM). Berniaga.com in January 2014 was actually acquired by OLX Indonesia because of the same business concept. Reported by CNN Indonesia, at that time the parent company OLX wanted its brand to become the sole ruler in the Indonesian market.

SEDAPI

Sedapur is a marketplace platform that focuses on culinary products. This company was founded in 2011 and is supported by the incubator Nokia Enterpreneurship with a capital of IDR 200 million. However, Sedapur could not operate for long. In August 2013 the company closed its operations due to a business strategy that was not working properly.

Soegianto Widjaja, who at that time served as CEO of Sedapur, admitted that his company's strategy was only focused on merchants and did not prioritize buyers. In addition, the failure to get new funding also made it difficult for Sedapur to survive in the e-commerce industry.

MATAHARIMALL.COM

MatahariMall.com officially operates in 2015 as a subsidiary of the Lippo Group. An investment of around US $ 500 million becomes the initial capital for its operations. This e-commerce site adopts online to online and offline to offline (O2O) business models that allow buyers to transact in various branches of the Matahari Department Store physical store. This business concept is inspired by Walmart which also used O2O first.

However, in November 2018, MatahariMall.com merged into the main online business unit of the Matahari Department Store, namely Matahari.com. Reporting from Bisnis.com, this consolidation step aims to make Matahari.com the sole online shopping channel for the Matahari company.

QLAPA

Qlapa is an online platform for selling handicraft products that has been operating since 2015. The company received a Series A investment from a company called Aavishkaar from India.

However, in early March 2019, Qlapa announced a complete shutdown of operations. In per caption s Qlapa, this company stopped operating for business reasons that were considered unprofitable and sustainable.

List of top e-commerce companies in Indonesia in numerical statistics


Indication of Company Downfall

As is well known, there are 16 e-commerce companies that have collapsed since the early 2000s. There are two kinds of indications for the downfall of a company; first, namely the complete cessation of operations, second, namely by changing the name due to the acquisition.

There are five e-commerce companies that died due to being acquired by other parties and then changed their names, namely Tokobagus, Kleora, Berniaga.com, Plasa.com, and MatahariMall.com. Meanwhile, 11 other companies collapsed because they completely stopped operating.

Highest Number of Establishments of Companies in the Same Year

2011 and 2015 were the birth periods of most e-commerce companies. Each year it contributes to the birth of 3 companies. In 2011 there were Sedapur, Rakuten, and Paraplou. In 2015 there were Lolalola, Qlapa, and MatahariMall.

The numbers that are striking in each of these years are suspected due to various factors. Reporting from Digital News Asia, Indonesia's economic growth in the 2010-2011 period reached 6.2 percent. This significant growth is predicted to be the basis for a number of investors to develop e-commerce companies in 2011.

Meanwhile for 2015, the increasing number of internet users in Indonesia, as reported by Kontan, helped accelerate the growth of the e-commerce industry, which is based on the wireless universe. Therefore, many companies started operations that year.

Average Age of E-commerce Companies Before Collapsing

Indonesian e-commerce companies that have collapsed in Indonesia so far have an average life span of 4 years. Even so, there are companies that can last very long above average. Multiply is able to exist for up to 10 years. Likewise with Tokobagus which was able to maintain its operations for up to 9 years before being bought by OLX, a global company with the ambition to monopolize the C2C type e-commerce business.

About 94% of the companies that collapsed were actually able to survive in their first year of existence. Only one company, Kleora, failed to maintain its core operations after a year of existence.

The most number of company losses in the same year

Five companies were forced to end their activities in the Indonesian e-commerce industry in 2015. These companies are Valadoo, Paraplou, BeautyTreats, Lamido, and Kleora. The general cause of the company's downfall is thought to be due to the type of product that was too specific so that it was unable to find suitable consumers.

Most Companies Close in One Financial Period

Many companies often use financial calendars to track business achievements. This financial calendar generally consists of four periods each with a term of 3 months.

Quarter 1 (hereinafter abbreviated as Q1) refers to the first three months (January-March) of the 12 months of the year, Q2 is the second 3 months (April-June), Q3 is the third 3 months (July-September), and Q4 is 3 last month (October-December).

Presumably, Q1 is the most crucial period for e-commerce companies. In the early quarter of this year, the company must formulate a mature strategy for business continuity for the next year.

And of the 16 listed companies, there are seven companies that decided to stop operating in that period because they did not see bright possibilities with their own business models. The companies in question are Berniaga.com, Lolalola, Tokobagus, BeautyTreats, Lamido, Rakuten, and Qlapa.

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