DANEN VENTURES Ling Daihong: Why invest in the Indonesia electronic business WOOK

2015-08-10

According to CB Richard Ellis report " A new era in the Asia Pacific retail market", in 2020, Indonesia will work among the world's top ten retail consuming demand market with China and India. It’s because the region emerged a large number of middle class, and the rise of the middle class will lead to a series of expansions of the retailers. The growing consumption ability will make people's consumption demand gradually expand from the daily necessities to the additional products, such as cars, clothing, fashion accessories and electronic products.

In the cross-border investment, Southeast Asia has always been the area concerned by DANEN VENTURES. Indonesia is Southeast Asia's most populous country with the population of 252 million and per capita GDP of $ 3,500. This is equivalent to China in 2008. Currently there are one hundred million people of Indonesia living in Java Island. The area probably is little smaller than Hebei Province. Indonesia's population is generally younger, and 60 percent of the population is under 30 years old. The concept of consumption is very advanced generally; the acceptance level of new brands and new trends is very high. The consuming finance system, credit card overdrafts and installment consumer habits make this market very active.

WOOK is a B2B mobile electronic business platform which links China’s quality branded products with Indonesia retailers. One end of the platform is China’s manufacturers and brands; they have advanced manufacturing ability, but don’t have enough resources to open up overseas markets. WOOK helps these brands to achieve rapid growth in the Indonesian region with a strong Indonesian team. The other end of the platform is the local Indonesia retailers. In Indonesia, the main channel of the small Consumer electronic products is the retailers. There are twenty to thirty thousand retailers distributed in all cities, so it’s very difficult to manage them. In the past three years, VIVAN Telecom has cooperated with more than 10000 retailers. For retail stores, they can find products with quality assurance and good after-sale services. Also they can directly dock with China’s manufacturers, get rid of the middle stages and lower the purchasing costs.

WOOK’s creation lies in that it makes the traditional B2B mode more efficient via the mobile Internet; meanwhile WOOK keeps it real, it makes innovation according to the local market reality instead of copying China’s experience. Take the flat channel for example: it removes the original retailing’s middle stages, directly goes from the manufacturer to the retail store; joins the pre-sales and group-buying modes that have been very mature in China; establishes the retailer community, makes the retailers interact to produce the user agglutinant. Currently it is the O2O mode, and it can achieve the B2B2C mode in the future.

Except for the promising of Indonesia market and business mode, it is the WOOK team that made DANEN determined to invest

WOOK team has extensive localization experience in channel management, and can put modern IT tools and management efficiency into Indonesia market which is relatively primitive and backward.” Lin Daihong said. Indonesian consumer market is highly dependent on imports, with no local manufacturing, especially consumer electronics.

So the electronics distribution channels of this small consumer market must have high-quality supply chain resources and a solid management. Integrating supply chain resources overseas while combining with local situations is the only way of all consumer electronics products in Indonesia

The supply chain and technology development team of WOOK has exceeded 40 to dock domestic high-quality products and resources, and in 2015 staff will exceed 100, which is extremely rare in Indonesian market channel .