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Indonesian Lippo Group bets big on ecommerce with US$500M launch of MatahariMall

February.25.2015 0 Comments

Indonesia’s Lippo Group announced today the launch of its massive ecommerce venture MatahariMall – the online version of one of the nation’s biggest mid-priced department stores. Lippo Group is one of the archipelago’s largest and richest conglomerates, and has invested US$500 million into the initiative.

Lippo plans to spend the money over the next two to three years in hopes that the site can create US$1 billion in sales. The firm claims this would also make MatahariMall the largest ecommerce site in the nation, and that it would be on its way to becoming “the Alibaba of Indonesia.” Lippo hopes MatahariMall will bring the firm’s consumer retail division (online and offline) to US$25 billion in revenue after five years. 20 percent of this is expected to come from online retail. Until today, the largest investment into an ecommerce company in Indonesia on public record was Tokopedia’s US$100 million from SoftBank and Sequoia Capital. Following today’s announcement, MatahariMall will also be in direct competition with Rocket Internet’s ecommerce giant Lazada Indonesia.

“Online commerce is a US$100 billion opportunity,” explains Lippo Group representative John Riady. “MatahariMall will be number one […] There is nothing like it in Southeast Asia. Our vision is to build the most powerful ecosystem that brings together buyers and sellers to do business anytime and anywhere.”

MatahariMall will offer the largest selection of goods spanning fashion, beauty, electronics, home, groceries, books, entertainment, and more, according to the firm. Riady claims MatahariMall is the first online-to-offline ecommerce site in Southeast Asia. This means that people can buy stuff online, then waltz into a Matahari department store to pick up the goods later.

CEO of Matahari Department Stores Michael Remsen believes Indonesian ecommerce will grow tenfold over the next five years. “Together with MatahariMall, we are committed to the future of ecommerce. All of our suppliers and partners are 100 percent behind us,” says Remsen.

Indonesia’s tech minister Rudiantara says the government is fully supportive of MatahariMall, and that he too believes ecommerce is the way forward for Indonesia. “We are thrilled […] to see Lippo take this bold step into ecommere,” says Rudiantara. “May this venture be a great success and benefit the country.”

Family-owned Lippo is one of the most powerful and prolific businesses in Indonesia. It has seen success with Matahari in department stores, Hypermart in groceries, First Media in cable and internet, Siloam hospitals in healthcare, Bolt 4G in telecommunications, Big TV in Pay TV, and a total of 60 shopping malls across the archipelago. The firm claims that all its ventures combines have generated annual revenue of Rp 60 trillion (US$4.7 billion) and has growing by 20 percent annually in recent years.

While today was the official unveiling of MatahariMall, Lippo says the site won’t actually go live until March. Lippo believes Indonesia’s internet penetration will reach 30 percent this year, and that online businesses are growing fast outside Jakarta, which is where the firm claims its businesses dominate. “Indonesia is the last remaining, large underpenetrated ecommerce market in Asia,” explains Riady. “MatahariMall is the single largest ecommerce opportunity today.”