Tokopedia Marketing Strategy-Understanding Marketing in Indonesia

The Tokopedia platform is a creative venture aimed at optimizing the e-commerce opportunities of the Indonesian market. Indonesia has the 4th largest online user database in the world, with an online penetration of approximately 70% in the country, and marketers have leveraged the opportunity these numbers provide to their fullest. Tokopedia is Indonesia’s largest online mall that allows local businesses, medium enterprises, and even industry leaders to become sellers on their platform and reach their ideal consumer base. 

E-commerce in Indonesia has allowed companies to expand and take their businesses online to reach their target audience. Keep reading with us to understand how Tokopedia’s marketing was strategically constructed to be attractive to the Indonesian population. If you’re looking to join hands with Tokopedia to reach more Indonesians, this will serve as a comprehensive introductory guide to how Tokopedia evolved to what it is now and how it can help your business grow.

What is Tokopedia?

Tokopedia is Indonesia’s e-commerce giant, even called “Indonesia’s Amazon!”. Initiated with the plan of democratizing commerce, Tokopedia is an Indonesian-made technology organization with a great focus on e-commerce. Tokopedia’s roots as a tech company have helped it go from a simple shopping platform for sellers to reach buyers into a super ecosystem that offers over 42 different digital services for its users. Tokopedia has a website and a functional app that can be downloaded on all devices. It has over 10 million sellers and 100 million monthly users from the country’s population of 260 million people! In a 2019 overview, Tokopedia’s economic contribution to the country was estimated at 1.5% of the country’s GDP.

Tokopedia has been a super ecosystem for over a decade, and in order to move forward, Tokopedia partnered with Gojek via GoTo Group to provide more customers with an all-in-one experience, fusing together e-commerce, on-demand, financial, and payment services. Below are some of the amazing features Tokopedia provides for any type of business to optimize its platform and attract other Tokopedia users. 

Products

Tokopedia’s diverse range of products and services Tokopedia fulfillment is a service that allows merchants to use Tokopedia’s warehouse and logistics facilities to organize deliveries to customers. Small businesses run by couples can sell their products through Mitro Tokopedia. Tokopedia Salam is personalized for Indonesia’s large Muslim community, providing Islamic financial options, products, and services. 

The app also provides financial services like digital wallets and credit cards for customers, and insurance and credit for business owners. Their commitment to life is evident with their initiatives like Tokopedia Academy, which has resources like courses and boot camps with a range of topics from technology, data, and product development.

Market

McKinsey reckons e-commerce is estimated to support at least 20% of Indonesia’s workforce in the upcoming years. Given Tokopedia’s large scale of business and its existing impact on Indonesia’s economy, this is great for the future of the company in the market. Merchants achieve more channels of growth as the market share grows and more users engage in internet usage and online sales and purchases.

Competitors

Tokopedia’s largest competitors are Sea and Lazada. Lazada is currently struggling because it has not been able to recover from the impact of COVID-19. However, Sea, a conglomerate of Southeast Asia based in Singapore, is an eCommerce giant, with two divisions contributing to its large scale of business: Garena, a successful 500 million user mobile-gaming business, and Shopee, Sea’s marketplace for sellers and buyers. 

Using the funding from Garena, Shopee has been able to secure channels that reach eight countries, of which Indonesia is a huge part. Shopee’s growth in Indonesia was proven when it overtook Tokopedia in terms of monthly user visits in the middle of 2020. However, Tokopedia’s logistics and delivery capabilities to Indonesia cannot be matched by Shopee as it deals with eight countries. Using this advantage, Tokopedia can improve its brand by streamlining its campaigns to deliver users their needs and wants efficiently.

Growth Opportunities

Mergers and acquisitions are great growth opportunities for brands. GoJek is a Southeast Asian Uber, facing fierce competition with Grab, both apps offering ride-sharing and on-demand delivery. Tokopedia and GoJek of the Goto group are in talks to merge and strengthen each other’s initiatives. Tokopedia will benefit greatly by focusing on GoJek’s payment solution, GoPay, in particular. Similarly, Tokopedia’s extensive merchant network and market dominance are critical assets to GoJek, allowing it to make the best use of its logistics and infrastructure.

Indonesian eCommerce

eCommerce is an extremely vital and profitable sector of the Indonesian economy. In 2020 Indonesia contributed to 29% of the worldwide growth rate, as the 11th largest market for eCommerce. The pandemic further pushed the needs of consumers, with every marketing campaign focusing on “staying home, staying safe, and getting goods delivered to them directly.” While this sort of campaign caused consumers to engage more in online shopping to purchase their goods, it also helped companies use the media to create a brand for themselves as either “quick delivery services” or “have it all stores”.

Challenges of Indonesia’s Ecommerce Industry

Indonesia consists of 17,000 islands, for which it is extremely difficult to establish logistical infrastructure. Despite Indonesia’s high internet penetration, it has one of the slowest internet speeds in the region, which can be frustrating for sellers and buyers. Indonesians also prefer to pay via bank transfer instead of directly applying their card details on websites, but low literacy rates contribute to fewer people having bank accounts. This reluctance also stems from their low level of trust in online marketplaces and their preference to have more social involvement with social media apps like Facebook. 

Tokopedia’s Approach

Tokopedia introduced personalized approaches, analyzed and understood the different phases of the customer onboarding process, and constructed campaigns, messages, and push notifications through various channels. The key was to implement personalization that appealed to Indonesian consumers. This worked! From downloads of the app to first purchases and customer retention, Tokopedia addressed all the phases of the consumer’s purchase journey, created the impression of a 1:1 personalized experience, and became successful.

Localization Strategy for Tokopedia

The biggest challenge for businesses online in Indonesia is catering to consumers all over the country. It is a humongous market, with great diversity, so much of which is more of a threat than potential. Tokopedia mastered this by implementing a localization strategy. The company started off by identifying the changes it needed to ensure the effectiveness of the plan. 

The strategy focused on online and offline marketing. The online sector was already localized, conducting deep learning on consumers’ preferences through their searches. The company also conducted the campaign “MAKER FEST”, a curated marketplace for small businesses to showcase what they sell in eight cities in Indonesia. This gained a lot of media attention and encouraged merchants to use the platform for their operations. 

Tokopedia’s Marketing Strategy

Tokopedia cannot function in a versatile archipelago like Indonesia without the right marketing strategies. These marketing strategies help the company gain traction and are necessary to retain the customers of the app, both buyers and sellers.

Social Media Presence

Tokopedia’s social media admins are active on Instagram, TikTok, and other networking sites, creating innovative and engaging content, advertising special offers and promotions, and consistently hosting live events. 

Providing Loyalty Gifts to Customers

The app has many cashback offers and giveaways for loyal customers, and this keeps them coming back for more.

Making Use of Brand Ambassadors

A brand ambassador influences customers to use Tokopedia. Selecting the right brand ambassador known for being ethical also builds a sense of trust in the business.

From Fluency

Taking part in national holidays is considered a national movement for businesses, which impresses locals. Tokopedia’s biggest events are collaborations with BTS and Blackpink, which have drawn in Korean fans.

Conclusion

Tokopedia’s marketing strategy is a combination of the complete understanding of the Indonesian population, from their purchase journey to their favorite brands, and providing a tailored, personalized Tokopedia experience with everything customers need, from fashion to education. Tokopedia also enhanced their localization strategies, overcoming the challenges they pose to any business trying to supply the Indonesian market.