Jeffrey Bahar, Deputy CEO of Spire Research and Consulting, addresses the best practices in Retail, Distribution, Intra-Indonesia Logistics & Multi-Modal Transportation. Jakarta, 27 July 2017

1. The Rise of Integrated Lockers
in e-Commerce Business
Indonesia
By Jeffrey Bahar, Deputy CEO Spire Research and Consulting
Retail, Distribution and Logistics Forum
Jakarta, July 27, 2017

2. 27.65%
26.70%
16.85%
14%
7.90%
4.92%
1.89%
Lazada Others Tokopedia Bukalapak Zalora Elevania BliBli
Competitive Landscape
Dominated by top-six players, with 73.2% market domination of those six
2Source: various source, processed
Estimated Market Competition Size 2016
(Consumer Only, in Billion USD)
$5.28
Billion
• Total consumer-segment e-commerce in
Indonesia is estimated to be around USD 5.28
billion in 2016. The market size will grow at
around 32% YoY to become USD 6.96 Billion in
2017.
• The market is dominated by several big players,
while other competitors shares some number of
shares from the rest. However this share would
be very dynamics in the future, especially from
its huge total growth and the rise of new players
such as Shopee, Mataharimall, etc.
Key Summary

3. Indonesia e-Commerce Market Development
Source: MENKOMINFO, Statista, Processed
+255 MILLION
4th Largest Population in The World
POPULATION
+110 MILLION
INTERNET USERS
e-Commerce Market Size (in $ Million)
2017
2018F
2019F
2020F
2021F
2022F
$6,963
$8,349
$10,020
$12,037
$14,475
$17,400

4. Consumer e-Commerce Market Size
• Started small, growing highest. People
started to switch their toys, hobby, and
DIY purchases through online platform
Growing ~20% to reach about USD 17.4 Billion over the next 5 years
CAGR
2,471 2,997 3,634 4,407
5,328
6,4561,278
1,544
1,780
2,052
2,333
2,712
592
635
734
848
1,080
1,255
1,183
1,456
1,717
2,023
2,398
2,861
1,439
1,717
2,156
2,707
3,336
4,115
2017 2018f 2019f 2020f 2021f 2022f
Fashion Electronics Food & Personal Care
Furniture & Appliances Toys, Hobby, DIY
Consumer e-Commerce Market Size / Category ($ Million) Description
21.18%
16.24%
16.22%
19.32%
23.39%
• Growing mainly from Cosmetics.
Online Buy Prescription Drugs and
Foods will also grow but with several
limitation
• Largest segment, keep growing high.
Online purchasing journey are getting
better over the next years; lower
constraint from global logistics will help
this segment grow high in the future
Source: Statista, processed
4

5. Market Value Share per Segment
Consumer e-Commerce Product Segments
• Fashion:
― Shoes & Shoe Care Products
― Leather Goods, Clothes & Acc.
• Electronics & Media:
― Physical Media
― Consumer Electronics
― Communication Devices
• Food & Personal Care:
― Food & Beverages
― Cosmetics & Pharmaceutical
― Medical Products (private use)
• Furniture & Appliances
― Furniture & Household Goods
― Electronics Households Appl.
• Toys, Hobby, DIY
― Toys, Babywear
― Sport & Garden Products
― Hobby & Stationary
Fashion products dominated the sales revenue market value
Product Lines
5
FASHIO
N
35.49%
ELECTRONIC
S
18.35%
FURNITURE &
APPLIANCES
16.99%
FOOD &
PERSONA
L CARE
8.50%
TOYS,
HOBBY, DIY
20.67%

6. Conventional Courier Service Advanced Logistics System On
Demand
Services
Pos
Indonesia
JNE Tiki First
Logistics
NEX
Logistics
Ninja
Expres
s
Pandu
Logistics
NCS J&T RPX ESL Raja
Kirim
Go Send
Mainstrea
m
Platform
Vertical
Marketpla
ce
Comparison on logistics by several channels

7. Drop Off Pick Up JNE Others
Mainstrea
m
Platform
Vertical
Marketpla
ce
Comparison on return logistics by several channels
Documenta
tion
Requireme
nt
TimeFram
e
Free Delivery
Fee
Replacement
Processing
Duration
Mainstream
Platform
3 days
15 days
14 days
Vertical
5 days 1-3 (Jakarta)
4-6 (others)
30 days 1-3 (Jakarta)
2-6 (others)
Marketplace
5 days

8. Distribution Company Delivery Scheme (Example)
8
Customer deliver
the Package to
Agent/Sub Agent
The package being
picked by the
courier
Package arrived at
branch office and
sorted based on
destination
Package arrived at
warehouse and
processed to
destination branch
office
Package arrive at
destination branch
office and resorted
based on location
Package is
distributed to
Agent/Sub Agent
Package is
delivered to
recipient by courier

9. The Shift to Digitalization Era and Its Effect to Supply Chain
Convenience
Safety
Time
Updates

10. Current Challenges in Product Delivery
Failed delivery attempts and uncertain delivery time are major issues
faced by both logistic providers and e-shoppers.
Reverse logistics are also becoming a major challenge for retailers, who
have to deal with higher return-delivery cost and complex logistical
operations.

11. What needs to be done?
The rise of intelligent lockers solutions are expected to increase the effectiveness and
efficiency in delivery service industry.
It will give an option to the customers to pickup their order directly from the lockers at
their convenient time, using a barcode scanner or a unique key sent by the company
(integrated payment

12. Explanation in details for each steps: Payment and
return logistics
OR
Picked up by courier
Self-picked up
at the nearest
Convenient locker
Self-drop the package to the
nearest convenient locker
available
in their areas
Providers
warehouse
Handover the package
Returning point
warehouse

13. Conclusion and Recommendation
Current Met Needs from
Logistic Providers
Challenges of Logistic
Providers
Possible Recommended
Actions
Wide geographical coverage
Reasonable price
Relatively fast delivery (for
certain areas)
Last mile delivery is loaded
with challenges
B2C deliveries often involve
a single package per delivery,
leads to higher fuel
consumption costs
Need 2nd attempt for delivery
when recipient not at home
Reverse logistic cost need
too much resources
Increase the number of intelligent
lockers solution by placing more
lockers at convenient locations,
like near malls, office buildings,
apartments, campus, train stations,
mini markets, hypermarkets, post-
offices, factory outlets, or any
other accessible and high-traffic
areas.
Concentrate on expanding in major
region and cities
Maximize the convenient lockers
potential not just as the place for
drop-off /pick-up point, but also as
a platform for marketing activities,
for example: media advertisement
space for rent/self-usage to have
another source of income.

14. Tel: (62-21) 5794 5800
Fax: (62-21 5794 5808
Wisma 46 Kota BNI, 25th Floor, Unit 07 & 09
Jalan Sudirman Kav. 1, Jakarta 10220
INDONESIA
indonesia.info@spireresearch.com
www.spireresearch.com