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Optimise channel management with advice from the e-commerce veteran

e27 sits down with Hadi Kuncoro, COO of aCommerce, amidst the hustle and bustle of the startup enabler’s 15,000-square metre warehouse in Halim, East Jakarta.

We discuss how brands are looking online for new opportunities since offline retail has been showing signs of slowing down.

“Brands do not only use this opportunity to penetrate into a new channel, they are basically using it to penetrate into a new, untapped market,” he says.

“There are definitely advantages in putting your product online. It only takes 36 hours from the moment the pricing is set until the product goes on display. Imagine how long it’ll take if you go to a supermarket,” he explains.

However, getting a license to distribute online in Indonesia is never an easy feat, which is where aCommerce jumps in with its channel management pillar.

Channel management involves performing order management, inventory management and delivery management under one platform. The company has been strengthening the service in the past six months to aid local and international clients look for the best place to sell their product.

Solidified by past experience that includes the founding of Zalora Indonesia and Muslim fashion e-commerce company Saqina, check out the top advice Kuncoro has for those who want to get e-commerce right.

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You need to believe in it

Before brands begin their move to the online platform, the first thing they need to do is to convince their own strategic management that going online is indeed their vision of the future.

In the past five years, Indonesian consumer behaviour has changed drastically. The country’s middle class is growing,  with 75 per cent of its population now at that level of income. The change also happens horizontally, with more consumers coming from provinces outside of Java.

Kuncoro mentions that while 60 per cent of e-commerce shoppers used to reside in Jakarta, nowadays, only 40 per cent of them actually live in the capital city. About 60 per cent of shoppers are outside of Jakarta, with more than half of them coming from Sumatra and Borneo.

“One thing I noticed is that though the number is very clear, brands are often reluctant to embrace [e-commerce]. You can’t. You need to really believe in it before you begin,” Kuncoro says.

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You need to beware of cannibalism

No, not that kind of cannibalism.

Kuncoro mentions cases where after a brand successfully transforms itself into an online channel, the company receives protests from its offline store employees who fail to achieve their targets since resources and supplies are being allocated to online stores.

“Once you decide to go online, then you need to carefully manage pricing and marketing strategy. Not only that you need to prevent cannibalism, but you need to strengthen your presence across different markets,” Kuncoro explains.

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You (still) need to promote

“Just because you now have an online presence, it does not mean you can just sit around and wait for God to send customers flocking to your site!” says Kuncoro passionately.

He gives the example of Matahari Mall, which receives 200,000 visitors on a daily basis. While it is true that products have a chance to be viewed by 200,000 people without any promotional effort, brands still need to step up their promotion game to optimise their online presence.

In this context, the benefit that an online channel can give is the relatively lower capital needed compared to setting up an offline store.

“When you open a store, be it in Pacific Place (a high-end mall in South Jakarta) or Cilandak Mall (a small suburban mall), you have to communicate with the public, ‘Hey, guys, I’m now available here.’ You need to create promotional events such as midnight sales or discounts for the first 50 customers,” he says.

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You need to know where to do it

It is very easy to get carried away with trends, especially with the current euphoria for e-commerce. But brands need to be mindful of their target market, and, eventually, the platform they choose to sell in.

“You can’t possibly sell milk in Zalora. For high-end fashion brands, they have their own platform such as Bobobobo. But still you can’t sell with discounts the way you sell [middle and lower-end brands],” he says.

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You need to prepare your customer service team

Back in the day, whenever a customer had any complaint about a particular product, they usually wrote a letter to the newspaper, with a very slim chance of getting it published. But in the era of social media, brands have met their downfall only by a click of an angry customer. Brands should no longer take customer service lightly.

“Change your mindset in how you deal with complaints. Not only [because] the platform will be affected, it can also destroy your brand,” Kuncoro says.

“Remember, e-commerce is all about trust, apart from convenience,” he warns.

Image Credit: Stephany Josephine – aCommerce

Disclaimer: aCommerce is an Ardent portfolio company. Ardent Capital is an investor in Optimatic Pte Ltd, the parent company of e27.

The post e-Commerce is all about trust: aCommerce COO Hadi Kuncoro appeared first on e27.

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