Digital Economy Opens Opportunities

KOMPAS/KARINA ISNA IRAWAN

Alibaba Group Holding Ltd (BABA) posted sales of US$4.9 billion in the first 10 minutes of the opening of the 11.11 Global Shopping Festival on Sunday (11/11/2018). The world\'s largest 24-hour online shopping festival offers more than 180,000 local and international brands.

SHANGHAI, KOMPAS —  Five Indonesian products are featured in the Alibaba Group’s shopping festival. Selling products on the digital platform has opened an opportunity to grow trade.

Indonesia is striving to increase its exports to China to reduce the trade deficit with the country. One of its ways, among others, is by strengthening digital economic cooperation to open market access and technological transfer.

This is the first time Indonesia is participating in the world’s biggest 24-hour shopping festival, based on the gross merchandise volume (GMV). Alibaba’s shopping festival targets the Chinese population in several countries in the region and has been held every year since 2009. At least 180,000 local and international products are traded through the group’s Tmall Global website and application.

Indonesia is one of 25 countries and regions that can promote up to five products in the 11.11 digital and physical pavilion of the Global Shopping Festival. Digital promotions through the platform are important to penetrate the Chinese market, as the Chinese population is unfamiliar with Indonesian products, even though China is one of its main export destinations.

“Breakthroughs through digital platforms are needed. Thus far, China’s biggest digital platform is Alibaba. This is the reason (for this cooperation),” said Indonesian Ambassador to China Djauhari Oratmangun in a media briefing on Sunday (11/11/2018) in Shanghai, China.

The five Indonesian products participating in the festival are Indomie instant noodles, Kapal Api instant coffee, Yan Ty Ty bird’s nest, Papatonk prawn crackers and Richeese wafers.

Tmall Global deputy general manager Qian Yi said it was not difficult to enter the Chinese market. The only requirement was that companies were able to map their targets and consumers’ specific needs. As a business-to-computer (B2C) market with the largest number of buyers in China, Tmall has traded more than 180,000 trademarked import products in 3,900 categories from 74 countries and regions.

“About 70 percent of buyers are women. The most desirable products are beauty products and baby equipment. Data and research are keys,” said Qian.

In the 2018 shopping festival, the most in-demand import products among Chinese consumers include health supplements, formula milk, facial serums, nutrition products for children and facial cleansers. This year’s sales exceeded 2017 figures of US$25.3 billion in 24 hours.

KOMPAS/KARINA ISNA IRAWAN

Bags containing merchandise ordered online are ready to be sent by RT-Mart to the location of the buyers in a radius of 3 kilometers in Shanghai, China (11/11/2018). Alibaba Group promoted the new retail concept by combining the online and offline shopping experiences in several shopping places, like RT-Mart and robotics restaurant Freshippo (Hema).

Export opportunity

Djauhari said that Indonesia could take advantage of the opportunity to increase exports amid the trade war between China and the United States.

Data from the Trade Ministry’s Trade Assessment and Development Agency indicates that Indonesia has an opportunity to fill the $7.9 billion gap in exports the US has left in the Chinese market.

Reza V Maspaitella, the permanent domestic investment development committee chairperson at the Indonesian Chamber of Commerce and Industry (Kadin), said collaboration between government and business world be strengthened to grow trade and investment. The Chinese market was unique, so large companies and micro, small and medium enterprises (MSMEs) needed to understand various aspects, including packaging, brand creation and enhancing the quality of export products destined for China.

Statistics Indonesia (BPS) data shows that Indonesia’s non-oil exports to China in January-September accounted for about 15.14 percent of all non-oil exports.