E-commerce Workshop “Policy and Implementation Ecommerce in Indonesia subtopic “Role of Ecommerce in marketing and trade promotion Jakarta, 3-4 May 2000 Rudy Rusdiah / V.P or

Introduction on Mastel n Mastel (Masyarakat Telekomunikasi Indonesia or Infocom Society of Indonesia ) established in 1 Dec 1993 n Mastel supported by 14 association in IT, Telecom and MultiMedia, 173 individual members and some nonprofit organization (university, lsm)

Background n Internet revolution - new economy n a new way of doing business by using electronic means to interact and do transaction n B2B - retailer, wholesaler, supplier, SP n B2C - Business to customer relations

Background n Ecommerce: n 1. Netcitizen - eSociety - Global Information Society n 2. Commodity: Bitify and Non bitify n 3. Payment System:Convention banking system, Credit Card, digital signature, CA? (related to Cyberlaw)

Background - netcitizen n World wide Netcitizen 95.4 million(1998) and million(2000) and 350 million(2003) n Asia Pasific 375 million in Important region for ecommerce n China 40 million internet user 2001 n Indonesia netcitizen ? n Internet Café: Portal for entry for netcitizen

Background n First generation: n Homepage present and for transaction with customer and vendor n payment using conventional banking/credit card n Second Generation ecommerce - online order/web order and payment using conventional banking/credit card/CA and secure web transactions(verisign)

continue n Future Third Generation:customer centric- closely integration customer and vendor also integrated intelligent application with backoffice processes. n IDC B2C important from early adopter to 2001, B2B then become important n Internet revenue USD 150 billion 2000 and USD 1.4 trillion in 2003

FOCUS ON B2C ECOMMERCE n For Indonesia and less developed countries B2C is more significant n Focus on B2C to empower SME local dotcom company

Opportunity of Ecommerce n 1st generation: Low barier of entry for SME : USD 35/monthly for webhosting services. USD 150/month for webprogramming n More advanced secure webhosting for ecommerce starting for USD 300/monthly and startup capital about USD 7,000 in hardware, human resources ) n

Opportunity for SME n Increase efficiency of company: - doesn’t need to rent outlet space & large inventory - doesn’t need to rent outlet space & large inventory - less worker (showroom, sales) - less worker (showroom, sales) - always open and access from anywhere - always open and access from anywhere n Increase efficency in economy: - faster response - faster response - new paradigm of distribution: eliminate - new paradigm of distribution: eliminate intermediatry in the supply chains intermediatry in the supply chains

Benefit Ecommerce n E commerce increase efficiency in economy n Ecommerce increase competitive advantage for SME

Mastel view: opportunity for Indonesian SME n Small local SME -> Global prespective Deperindag must socialize ecommerce n Singapore: Association of Small Medium Enterprise (ASME) launch SME portals n China MII(Ministry of Information) launched IT website for SME n promoting SME products and online store => eMall and SME Portal

Continue : Mastel view: n Related Government departemen help reduce high cost, bureaucracy and license for startup dotcom company n Easier for Startup company to get listed and IPO n venture capital to empower startup dotcom

BARRIER FOR ECOMMERCE PLAYER n Bandwidth n difficult to get ISDN, no Broadband n only dialup analog available currently n Tariff of telecom is still expensive, need subsidy for warnet/internet café to increase the no of netcitizen n Low Computer Literacy: PC penetration less than 1% compared to 36 % in USA

Conclusion n Technology will progress very fast n Government and regulator must be accommodative and make the environment conducive for SME n (consumer protection act, IPR etc..) n Thank you for your attention n