In a freewheeling interview with e27, Indrasto Budisantoso, CEO, Groupon Indonesia, a global deals website, talks about Indonesia being one of the important emerging markets for the company – referred to as a growth angel, uniqueness of the Indonesian market, Groupon’s global ‘One Playbook’, and addressing the payment channel challenge. Budisantoso took charge in January 2013, replacing Jason Lamuda and Ferry Tenka, previous owners of Disdus, an Indonesian group buying site that was acquired by Groupon in 2011. Excerpts from the interview:
How does Groupon look at the Indonesian e-commerce market? Is it poised for growth?
Indonesia is being seen as one of the markets with the most potential. The country has a population of more than 200 million with more than 50 million internet users. However, in comparison, our subscribers are still very less. Additionally, our percentage of market penetration is also low. This means potential for growth is huge.
The number of subscribers has doubled from last year to 2.5 million. With a total of 5,000 merchants already partnering with us, the number of deals at any given time is 200 – again doubled as compared to last year.
What is unique to Indonesia?
A survey from Boston Consulting Group rates Indonesians as the most discount hungry. Groupon is a website that gives discount, but there are still many people who are not aware of the portal. Imagine a scenario when everyone knows about it!
From a merchant point of view, Indonesia is now in the middle of an economic boom and many new businesses are opening. There are always new cafes, restaurants, spas, workshops, etc. – all businesses that can be assisted by our service.
How does Indonesia fare as compared to Groupon’s other markets globally?
Markets in most of Groupon’s 48 countries are more mature compared to Indonesia. They are more developed in terms of infrastructure and have higher internet usage; however, the growth potential is lower than Indonesia.
Indonesian e-commerce boom is yet to come. One day we will see e-commerce companies at par with Amazon or eBay coming out of Indonesia!
What is the kind of transition taking place in the company’s Indonesia operations after the acquisition of Disdus?
After Groupon acquired Disdus in 2011, there’s been a gradual management change. The difference between the previous Groupon (Disdus) and the current one is mainly in the way we run the business. Now we have guidance from Groupon global.
Are you emulating the global best practices?
We have what we call ‘One Playbook’. It is a compilation of Groupon’s best practices from all over the world. Each of the various Groupon companies – some built organically and others acquired – has its own best practices.
Groupon’s annual revenue is beyond $2 billion and the company’s size by market cap is beyond $6 billion. It has more than 10,000 employees, and Forbes has called us the fastest growing company ever. With such exponential growth, there are many innovations taking place in various Groupon companies. The knowledge of one company can be useful to other. Groupon has created a knowledge sharing system so that all best practices can be accessible to the various companies.
How do you plan to exploit the mobile phenomenon?
Groupon International has a very heavy focus on mobile. Currently, we have mobile apps for Android, Apple and Blackberry. The apps feature ‘Find your nearest deal’, which informs users of deals that are available near their current location.
How are you tackling the payment channel challenge?
There is no denying the lack of mature supporting infrastructure, especially in terms of payment. This is why we have a heavy focus on payment processes. They have to be seamless and as easy as possible for customers.
The Indonesian market is unique. For example, the number of mobile phone cards has exceeded the population of the country. And there are still a lot of our customers who don’t have bank accounts. This is why we are giving them various alternatives; one of them being Indomaret.
Indomaret is a popular convenience store chain with more than 6,000 outlets all over Indonesia. After a customer chooses a product and is ready to pay, he/she can click on the Indomaret button and get a code from Groupon. Customers can then walk into a nearby Indomaret store, mention the code and make the payment.
Another option is Mandiri e-cash, which is a mobile payment facility provided by Bank Mandiri, the largest bank in Indonesia. This channel helps make payment with just one click. Along with Mandiri e-cash, we wish to make payment as easy as buying music on iTunes!
Photo by: Ira Siagian