Increasing tokopedia market share in concern of rural areas in Indonesia
Introduction
Living in globalization era, people start to find countless ways to connect with each other through internet ever than before. According to APJII (Indonesia Internet Service Provider Association), more than half people in Indonesia are populating the internet. Therefore, there is a large market potential for e-commerce and online marketplace in Indonesia. Online marketplace enterprises, including Tokopedia, have even larger potential to grow their industries especially in rural areas as they could engage more sellers and buyers.
Almost all of internet population are aware of e-commerce, nonetheless there is a significant amount of them which have never involved in e-commerce neither online marketplace doings. In this case, people in rural areas are less affected with internet even with e-commerce awareness. It is a concern that people in rural areas don’t have any knowledge in operating the internet. Knowing that three out of five Indonesians live in rural areas means we should put more effort in educating people for using the internet properly. Hence, Indonesian online marketplaces are suggested to produce trained agents for rural areas with intention to alert the people to trust and elaborate in online shopping industry.
Objectives
· To understand and educate rural people behavior in internet activity especially in online shopping industry
· To increase Tokopedia’s market share in rural areas market
· To make good impressions of Tokopedia as a trusted online marketplace in rural areas
Principals
Tokopedia is the biggest online marketplace in Indonesia. It was founded by William Tanuwijaya and Leontinus Alpha Edison in 2009 until it becomes a C2C (Customer to Customer) retail with very high volume growth. It provides a platform for individual and small/medium sized business to open online stores. By 2016, there are 16.5 million items sold on Tokopedia per month and 80% of its visitors come from mobile device[1]. Looking at Tokopedia user demographic, rural area will be a new concern for Tokopedia market share to grow.
Rural area is a land where the population density is very low. Throughout the world, more people live in rural areas than in urban areas. In Indonesia, there are about 60% people live in rural areas and their most common occupation is farming. According to research in India, rural markets reach more benefits and grow faster consumption rate than urban markets[2]. Henceforth, the theory can be applied in Indonesia seeing that both India and Indonesia are rural life majority countries which create a potential for business by way of Tokopedia to increase its market share. Nevertheless, rural area, generally, lacks transportation infrastructure and internet access to support industries grow their businesses. This will be a challenge which Tokopedia, as a business player, should encounter to increase its market share to rural areas.
Teman Tokopedia
With lots of problems and challenges for increasing market share in rural areas, we offer a business marketing strategy based on dropshipping affiliation. Dropshipping is a retail fulfillment method where a store doesn't keep the products it sells in stock. This strategy consists of providing job opportunities for whom lived in rural areas to act as a dropshipper and seller assistant for potential buyer and seller with no internet access and further knowledge of Tokopedia. The dropshipper-and-seller-assistant later will be known as Teman Tokopedia who has missions to persuade rural people to trust and involved in online shopping on Tokopedia while educating them with internet access. The similar marketing strategy has been practiced in another online marketplace, but with missing important consideration it would lose interest.
We, of course, consider this strategy thoughtfully with looking up to the people’s opinions on the similar dropshipping strategy at numerous online forums and articles. Thus, we come up with several details of the strategy as the followings:
· Tokopedia will train some people as an initiator of Teman Tokopedia with basic marketing and technical skills, then they will be spread to several major rural areas.
· Beside dropshipping knowledge, Teman Tokopedia could help potential sellers to turn their conventional stores to be online stores.
· The trained Teman Tokopedia will do his/her missions and persuade other rural people to be a new Teman Tokopedia by training them.
· Tokopedia will give a reward (could be an extra commission) to Teman Tokopedia who has succeeded at persuading a new seller and/or a new Teman Tokopedia.
· Teman Tokopedia will have a different Tokopedia account including a panel to handle orders and commission receiving.
· Seller will be responsible to give Teman Tokopedia a commission and has the right to deny order from Teman Tokopedia.
· Seller will be given choices to set the commission percentage with allocated minimum percentage as followings,
o For product values ≤ 2 million rupiahs, minimum commission is 3%
o For product values > 2 million rupiahs, minimum commission is 1% with the very minimum is 60 thousand rupiahs
The details above are necessary to avoid repeating failure as another online marketplace has done.
Creating a strategy that will be applied in national-level market, we are aware of possible wanted and unwanted future events. Hence, SWOT analysis is required to make sure that we could achieve our objectives.
Strengths
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Weaknesses
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1. Teman Tokopedia should know what they are selling and could help potential buyer and seller to make the right decisions.
2. Teman Tokopedia will offer one-stop shopping to avoid unnecessary objects on the internet.
3. Teman Tokopedia could reach Tokopedia’s market share to rural area.
4. Teman Tokopedia could gain income without investment required and could choose his/her own working hours.
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1. If a Teman Tokopedia couldn’t learn quickly, he/she will be overpowered by other competitors.
2. Teman Tokopedia will possibly lack skills and resources.
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Opportunities
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Threats
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1. Teman Tokopedia could educate rural people especially teenagers about internet and Tokopedia.
2. Similar strategy has applied in only a few online marketplaces with a few agents, so the actual competitors are other Teman Tokopedias.
3. Teman Tokopedia could increase market demands in rural areas.
4. Everyone with all ages (with Kartu Tanda Penduduk) could be a Teman Tokopedia.
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1. Teman Tokopedia can’t inform the customers what you offer.
2. Economic conditions such as inflation, exchange rates, taxes, etc.
3. Potential buyer and seller could lose trust to Teman Tokopedia.
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Conclusion
· We offer a market share increase strategy with Teman Tokopedia. He/she could be one of the rural people and could educate rural people about internet access and online shopping industry.
· With lots of Teman Tokopedias spreading online shopping knowledge and assistance to rural people, they could increase Tokopedia market share in rural areas.
· With Teman Tokopedia mouth-to-mouth marketing, it could build trust in Tokopedia as an online marketplace for rural people without hesitation to buy or sell.
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