Rise of E-Tailing in Indonesia: an External Analysis

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Rise of E-tailing In Indonesia:
An External Analysis

Suryo Ariyanto Nugroho Middlesex University Business School

Rise
 of
 E-­‐tailing
 in
 Indonesia:
 An
 External
 Analysis
 
 

Table of Content

Executive Summary .................................................................................2 Introduction ..............................................................................................3 Industry Overview....................................................................................4 Country Overview ....................................................................................5 Macro Environment Analysis .................................................................9 Industry Analysis....................................................................................11 Recommendations ..................................................................................15 Conclusion ...............................................................................................17 Reference .................................................................................................17

 

 

Middlesex
 University
 Business
 School
  1
 
 


  Rise
 of
 E-­‐tailing
 in
 Indonesia:
 An
 External
 Analysis
 
 

Executive Summary
An external analysis is the main thing that the author wants to provide in this report. There are two aspects of external analysis that will be elaborated deeper, such as macro-economic and industry. Before going to the external analysis the author wants to present the overview of the e-tailing (retail e-commerce) and also the overview of Indonesia. For doing the analysis in the macro-economic aspect, PESTEL framework will be used and the analysis in the industry and sector will be done by Porter’s five forces framework. From the analysis, the author finds out that Indonesia has a lot of potential for e-tailing market, however on the other hand the regulation in Indonesia cannot support the rapid growth of e-tailing market there. By knowing those findings, a recommendation is made and it is divided into two, first is for new entrants that want to enter the industry and second is for the incumbents that have been in the industry. This report concludes with a recap from the overview of the industry, overview of the country, analysis, and strategic recommendation.

2
  M
 

Middlesex
 University
 Business
 School
 

Rise
 of
 E-­‐tailing
 in
 Indonesia:
 An
 External
 Analysis
 
 

Introduction
The rapid growth of Internet’s development has made businesses can be done in many ways without any limitations and make the world seems like it is flat by just sitting in front of a computer. One of the businesses that are developing swiftly right now is ecommerce, basically e-commerce can enable or provide people with buy and sell activity, and it also allows supplier and customer to exchange information and product, the difference is this activity takes place in an interactive virtual environment rather than in a real world store or market place (Gunasekaran and Ngai 2005). Nowadays e-commerce has become one of the most promising businesses and its revenue is forecasted to reach $963 billion by 2013 (Rao 2011) and it has changed the rule of the game in retail industry by making it more convenient for the customers to shop only by the tip of their finger. In emerging market like Indonesia, e-commerce is also growing rapidly, with the estimated business value of $500 million in 2013 and expected exponential growth of 60 – 70 percent within the next three years (Ika 2013). Although the market size of Indonesia is only 0.023 percent of global market size, while global market size for ecommerce was estimated at roughly $2.2 trillion (Jay Lin 2008), it will not make Indonesian e-commerce market unattractive, in fact that...
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