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Analysis

Zalora May Need to Open Offline Store in Indonesia

Avi Tejo Bhaskoro - 3 November 2014

Me and my wife once had a captivating debate. I personally tried to accommodate my wife’s desire of shopping by suggesting her to pay a visit to various e-commerce websites available rather than spending her time browsing around malls.

Instead of going along with my suggestion, she gave me an interesting response. She claimed that while online shopping indeed offers tons of advantages and facilities, there are still plenty of other things that Zalora, BerryBenka, or PinkEmma cannot replace, e.g the opportunity of trying before buying, ‘fighting’ with other shoppers to get discounted items, and bargaining with the sellers. There, I said to myself, do e-commerce websites need to open offline stores to provide such experience?

In this regard, I’d like to focus on Zalora, one of e-commerce giants in Indonesia. Even though it’s parent company, Rocket Internet, has yet succeeded in becoming the most prominent e-commerce company in Indonesia, it’s brand is quite popular among Indonesian online shoppers. Ever since its debut, the platform has put serious efforts in promoting itself. It’s not surprising, then, to see Zalora reaching a series of milestones on mobile platform. The latest report had it that Zalora is currently looking to establish its own offline store in Blok M, South Jakarta.

Despite the fact that there has yet been any further information regarding to the exact date of the establishment, it seems that Zalora is going to be the second digital player, after ShopDeca, that takes such action. Well, in Indonesian e-commerce market, Zalora indeed overpowers ShopDeca, at least in term of Alexa’s ranking which ranks Zalora as the 108th and ShopDeca as the 3135th. Given this fact, does Zalora really need to establish an offline store in Jakarta?

Apparently, Zalora’s passion of establishing offline stores is not merely a dream. In fact, in Singapore, the platform has already had opened a physical store at ION Orchard shopping center. Although it’s only in the form of pop up store and would only last until January next year, this step taken by Zalora indicates that it’s ready to enter the offline market.

I’m pretty sure that Zalora has no other reason than aiming for much better performance as well as engaging itself further to the customers by establishing the offline stores. Well, my wife was right. Zalora indeed intends to seal more consumers’ trust and acquisition, and even, probably, promote its in-house products named Ezra. This was confirmed by Tito Costa, Zalora’s Regional Managing Director. He told Wall Street Journal that Zalora’s goal in establishing an offline store in Singapore is to give customers back every little thing that has been missing from online shopping, just like what my wife described back then.

“The idea is, you may try the products, feel them, and purchase them directly at the shop before they are sent to your house. There are so many people who are not familiar yet with Zalora, and  Zalora store eases us attracting users,” Costa claimed.

According to his statement, it is implied that online entrepreneurs aren’t only attached to online stuffs all the time. I myself expect that this offline store can reach practically each and every social class in Indonesia, since online stores are not that accessible for most of Indonesian citizens. However, considering that offline stores require much much more patience and capital as well as longer BEP, online entrepreneurs should think million times before deciding to do what Zalora does. When everything has been set, then it’s time to enjoy offline successes.

[Header illustration: Shutterstock]

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