CORRECTION-Alibaba’s Ma will be a boon for Indonesia e-commerce but onus still on gov’t to drive policy - industry leaders

Photo: NEW YORK CITY, USA - September 19, 2014: Sign at the New York Stock Exchange marking the Initial Public Offering of the e commerce company the Alibaba Group in New York City / Christopher Penler / Shutterstock.com

(Corrects to say that Daniel Tumiwa is former chairman of the Indonesian E-commerce Association)

JAKARTA – Alibaba Group chairman Jack Ma’s know-how and experience will be a boon for Indonesia’s e-commerce development if he comes on board as adviser to the country’s e-commerce steering committee, industry leaders told Salaam Gateway.

Reuters reported on Monday that the Indonesian government had invited Ma to act as adviser to the new committee, which is currently being set up. An Alibaba spokeswoman declined to say whether he had accepted the offer, said the report.

Alibaba has a keen interest in Indonesia's e-commerce development. In April, the company bought a controlling stake in Singapore-based Southeast Asian B2C retailer Lazada Group for about $1 billion. Lazada operates in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, according to its website.  

Daniel Tumiwa, former chairman of Indonesian E-commerce Association (IDEA) and CEO of the country’s biggest C2C online marketplace OLX Indonesia, said the appointment would be “strategic” for both Indonesia and Alibaba.

“Ma has extensive experience and is good at strategizing for e-commerce,” Tumiwa told Salaam Gateway.

Such a collaboration between the state and the private sector will benefit both parties, said Tumiwa.

“At the present time there are no e-commerce companies in Indonesia with the same kind of dominance that Alibaba has in China, which is why it would make sense to learn from Ma. With a rapidly growing middle class that is slowly becoming more comfortable with online shopping, the potential market here is huge,” said Tumiwa.  

He added that Indonesia’s e-commerce companies still face major hurdles, namely the logistical nightmare of delivering products to all of the archipelago’s far-flung corners, as well as a consumer distrust of credit cards and e-payments in general.

Ilham Habibie, the head of the working committee of Indonesia’s National ICT Council and vice chairman of Information Technology at the Indonesian Chamber of Commerce and Industry (Kadin) said that Ma has the right skills to be adviser to the country’s e-commerce steering committee.

However, the success of the collaboration will depend on President Joko Widodo and the government, as Ma will only serve in a non-executive capacity, said Habibie.

“It will work but for the next steps, will they (the government) hear Ma’s suggestions and turn them into national policy?” asked Habibie.

Last month, Indonesia’s communications and information minister Rudiantara said his government was eyeing an overall $130 billion in e-commerce transactions by 2020, as it opens the sector to foreign investors. Estimated transactions in e-commerce were $12 billion in 2014, according to a Reuters report in March citing the minister.

Rudiantara also revealed that the Indonesian government is mulling plans to include halal business in the new presidential decree on e-commerce to spur the sector’s development.

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