TOKYO -- Japanese trading house Mitsui & Co. will take a minority stake in an Indonesian online retailer to gain a foothold in the country's fast-growing e-commerce market.
Mitsui will spend a few billion yen (1 billion yen = $9.6 million) to purchase a roughly 10% stake in Global Ecommerce Indonesia in a deal set to close in November. GEI runs MatahariMall, a digital retailing platform that went live in September last year.
Indonesian conglomerate Lippo Group controls GEI and, in addition to the online platform, runs 150 Matahari department stores in the country. The chain enjoys wide name recognition and MatahariMall has become a top-ranking Indonesian online retailing site.
MatahariMall warehouses and ships products from the roughly 5,000 affiliated sellers the web portal hosts. The online retailer also procures goods directly and sells them independently. Home electronics are currently seeing robust demand. MatahariMall also handles apparel, clothing accessories and food. Monthly sales are reportedly outpacing year-earlier figures by 10%.
The virtual mall also serves as a delivery and pickup depot for Lippo Group's Hypermart, a supermarket chain with over 100 domestic outlets. MatahariMall boasts about 680 pickup locations, including lockers at stations and universities.
For its part, the Japanese company brings its wealth of expertise in mail-order sales to the table. Mitsui is a shareholder in the Mercari flea market app back home and in Naaptol, an Indian home shopping network. Not only will Mitsui send staff to join GEI's management team, the trading house will also procure sought-after toys, electronics and other goods from Japanese companies. Mitsui's funding will go toward stepping up MatahariMall's advertising and marketing and enhancing its systems.
Indonesia's e-commerce market will expand to $46 billion by the 2020s, according to Google and others. China e-commerce giant Alibaba Group Holding invested in Lazada Group, a Singapore-based startup that operates a top online retailing platform in Indonesia. Japan's SoftBank Group is backing major Indonesian rival Tokopedia. However, a source at Mitsui said that no clear winner has emerged so far.