Indo Lotte Makmur, a 50-50 joint venture between Lotte and Salim Group, has been officially launched to join the e-commerce foray in Indonesia. Harnessing on the strength of Salim Group’s distribution network, the new company will likely have an edge over its competitors.
iLotte shopping to launch in July
A new shopping platform, targeting women between 20 to 39 years old, is expected to launch as early as July. It will carry brand-name cosmetics from South Korea and other products from Lotte’s existing online platform. Philip Lee, president of Indo Lotte said, “Salim has a lot of infrastructure, we can bring the know-how and technology.” Lee was former executive in Lotte’s e-commerce business in South Korea.
Overcoming logistical challenges
The company will invest in building infrastructure over the next few years. Indo Lotte CFO, Dani Sumarsono, is confident the company will achieve economies of scale required for ecommerce. Indonesia is an expensive market to service, due to lack of basic infrastructure on far-flung islands and congestions in major cities. Nonetheless, Salim Group has more than 13,000 Indomaret convenience stores which can be used as pick-up locations after goods are ordered online. It is also linked to more than 30,000 small towns nationwide via group member Indofood Sukses Makmur, which delivers instant noodles.
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