Empowering Indonesians through C2C Trading: An Interview w/ OLX CMO, Edward Kilian Suwignjo
The OLX Group is a network of leading classifieds platforms in 45 markets, including the OLX brand. We spoke with Edward Kilian Suwignjo, Chief Marketing Officer at OLX in Indonesia, about the OLX brand in the Southeast Asian nation.
The OLX Group connects local people to buy, sell or exchange used goods and services by making it fast and easy for anyone to post a listing through their mobile phone or on the web.
OLX WAS FOUNDED IN BUENOS AIRES AND NEW YORK CITY IN 2006 AND YOU’RE NOW PRESENT IN ALMOST 100 COUNTRIES. WHAT IS THE STORY BEHIND WHERE OLX IS TODAY?
Well, the journey for OLX Indonesia started in 2005, actually. We are the earliest online classified in the market. We invested in mass communication, and we were maybe the only ecommerce advertised on TV back in 2010, focused on building awareness and forming a habit of trading second-hand goods. We have been on a trajectory of hyper growth ever since. In 2015, we merged with our closest competitor and that truly makes us the dominant online classified in Indonesia. Today we have 20M unique visitors every month; we are facilitating more than 1.4M transactions, with a total value of IDR 31 Trillion (app. $2.33BN).
I’VE HEARD OLX CO-FOUNDER ALEC OXENFORD SAYING THAT OLX ACTS AS A “WEALTH CREATOR” IN EMERGING MARKET. HOW IS THAT?
I can’t comment on Alec’s quote, but OLX across the globe do share the same purpose, which is to “improve people’s lives by bringing them together for a win-win exchange”. What we do is really empowering people. We let them connect with each other for mutual benefit and support and thereby making progress in life through the value exchanges that happen consequently.
HOW DO YOU THINK MARKETING STRATEGIES DIFFER IN EMERGING MARKETS TO THAT OF MORE MATURE MARKETS?
In the emerging market, I think price is one of the top priorities, while service usually takes the backseat. It can be the other way around for mature market where service comes first and people are willing to pay more for a better service.
ONE OF THE MOST INTERESTING EMERGING MARKETS FOR MANY ONLINE COMPANIES IS INDONESIA. WHAT ARE THE FACTORS BEHIND INDONESIA BEING SUCH A KEY MARKET FOR OLX?
Definitely size! Indonesia has a large and growing middle class with significant buying power. A strong development of digital infrastructure and a low price of internet access from the telco operators also help a lot when it comes to adopting new technology or applications. All of these factors make for a huge potential market for a lot of online companies.
OLX.CO.ID IS ON THE TOP 20 OF THE MOST VISITED WEBSITES IN INDONESIA. FROM A MARKETING PERSPECTIVE, HOW HAVE YOU ACHIEVED THIS SUCCESS AND HOW DO YOU INTEND TO MAINTAIN THAT?
At the end of the day, the most powerful thing is to provide real value to our users. Sellers at OLX can sell their goods within days, sometimes even hours! And buyers have millions of great second-hand deals to choose from. This is the reason why people are coming back to OLX and sharing the word of mouth. Advertising campaigns will definitely always be a critical factor in building the brand and becoming the “crowd puller”, but word of mouth is the definitive driver. It’s really all about whether we can deliver on our promise or not.
HIGH MOBILE USAGE SEEMS TO BE AN INTEGRAL PART OF OLX’S SUCCESS. WHAT ACTIONS HAVE YOU TAKEN TO MAKE YOURSELF A MOBILE-FIRST “PRODUCT” FOR CONSUMERS FROM A MARKETING PERSPECTIVE?
Mobile gives us a broader access and provides us with a lot of data to understand our users. It really helps us to be much more relevant to our current and potential users. On the technical part, it has a large impact on how we optimize the user experience. We have to deliver a great small screen experience; it has to be light in order for it to accommodate various levels of mobile internet download speed. On the marketing part, the data we collect from mobile behavior gives us a robust understanding of our users. It helps us in regards to how we talk to our users through their lifecycle with us. What message to send by when and on what subject can thus be based on specific user moments. In digital advertising, it’s not a question of communicating with the masses; you have to adopt a one-to-one approach.
UNLIKE MANY OTHER ONLINE BUSINESSES, OFFLINE MEDIA CHANNELS LIKE TV AND OOH HAVE BEEN KEY MEDIA CHANNELS EARLY ON FOR REACHING OLX’S GROWTH TARGETS. WHAT IS IT THAT OFFLINE CHANNELS, SUCH AS THESE ONES, OFFER YOU THAT YOU CAN’T GET WITH DIGITAL ADVERTISING?
TV is still the media with the highest penetration in Indonesia. Almost every household in Indonesia own a TV set. Thus, it makes TV the best media to reach Indonesians across the country. The sight, sound and motion of TV ads enable us to better inspire people to conduct C2C trading and experience the benefits that it brings to their lives.
THERE’S A LOT OF COMPETITION IN INDONESIA TO BECOME ONLINE SHOPPERS’ DESTINATION OF CHOICE. HOW DO YOU STACK UP AGAINST YOUR COMPETITION AND DO YOU EVEN SEE YOURSELF IN THAT CATEGORY?
Well, the most important thing is to differentiate yourself. There are several things that set OLX aside from the competition: we have a unique position as a C2C trading platform, i.e. second hand goods market. Then, with the scale of OLX, users’ trade success is really high. In our main category, more than 70% goods are sold in less than one week. This is the main strength of OLX that will be difficult to follow by others. Also, we have more than four million fresh goods every month. This provides huge opportunities for people to shop at OLX. Finally, by being classified, we provide the simplest ecommerce model to match the way Indonesians want to transact: by meeting up.
YOU HAVE BEEN WITH OLX FOR ALMOST TWO YEARS, HAVING COME FROM THE TELCO INDUSTRY. WHAT’S THE BIGGEST DIFFERENCE YOU’VE WITNESSED WITH YOUR SHIFT TO ECOMMERCE?
I see more similarities than differences, actually. The two industries are in fact connected. Telco provides the access points; e-commerce provides the purpose. Both are digital-centric, data-driven company. Both telco and e-commerce capture comprehensive user data which makes us understand our users very well. These data are then used to make ourselves more relevant to them.
WHAT DOES THE FUTURE HOLD FOR OLX IN YOUR OPINION?
The future will depend on how strong your position is today, and – especially – how different and how relevant you are for the market. I believe OLX has a unique position which empowers Indonesians to make progress in their lives, faster. Our growth is driven by this promise. Indonesians can sell goods they no longer need as a starting point to acquire new goods that they may need more. And they can get high quality goods to improve their life quality at a cheaper price because it’s second-hand goods. Therefore, I believe OLX has a strong sustainable position for the future. In addition to this, unlike others, we don’t do discounts or freebies to drive our growth. We can’t do it because of the simple fact that we don’t facilitate payment, and it’s also a very short-term way of acquiring new users as it educates the market solely on price which is not sustainable, in my opinion.
YOU’VE BEEN WORKING SOME 15 YEARS IN THE MARKETING INDUSTRY IN INDONESIA. FOR MARKETING PROFESSIONALS FOR COMPANIES ENTERING INDONESIA, WHAT’S YOUR BEST ADVICE FOR SUCCESS IN THE INDONESIAN MARKET?
It is a highly competitive market with a huge potential for those who get it right. For new market entries where growth is the key objective, it’s really easy to get trapped in a price war situation. With a typically price sensitive Indonesian middle class, price war will quickly deliver growth, but, as we all know, it’s not sustainable in the long run. Your competition will follow your price promotion strategy and you can quickly end up in a situation where you need spend even more or you will die. Of course, it’s also very important to address cultural issues and become relevant and meaningful to the local market.
EDWARD, THANK YOU VERY MUCH FOR SPEAKING WITH US.
This blog post is an adapted version of an article that featured in Leverate Media’s company magazine ‘Leverate ONE‘.