While China's e-commerce market has become fiercely competitive, Indonesia's digital marketplace remains a relatively untapped opportunity. Yet with opportunity comes challenge—how can brands establish themselves and achieve rapid growth in this emerging market? Xiong Zhen, former product executive at Baidu and Xunlei, has demonstrated the viability of data-driven localization strategies through his lingerie brand JHU Collection, which generated $150,000 in revenue within just three months on TikTok Shop Indonesia.
Entering Indonesia's Live Commerce Market: Data as the Foundation
Xiong's decision to enter the Indonesian market was based on three key data points:
1. Market Potential: As Southeast Asia's largest economy with a growing internet population, Indonesia represents one of the most promising cross-border e-commerce markets. Consumer acceptance of e-commerce is high and market maturity is accelerating.
2. Strategic Partnership: The company was founded with the intention of establishing deep collaboration with J&T Express, which boasts extensive logistics infrastructure and local resources in Indonesia. This partnership significantly reduces logistics costs and improves operational efficiency.
3. Competitive Landscape: With local players dominating Indonesia's e-commerce sector, the barriers to entry are relatively high. However, early movers who successfully establish themselves can gain significant advantages, making their accumulated experience and resources more valuable.
Choosing the Lingerie Niche: Strategic Differentiation
Rather than competing in oversaturated categories like beauty or women's apparel, JHU Collection identified lingerie as a strategic niche through careful market analysis:
1. Avoiding Red Oceans: While beauty and apparel categories are highly competitive—particularly women's clothing which demands strong branding and supply chain capabilities—lingerie offered more growth potential with relatively less competition.
2. TikTok Shop's Untapped Potential: A year ago, the lingerie category on TikTok Shop was significantly smaller than on traditional platforms like Shopee, indicating greater growth opportunities in this emerging channel.
3. Market Development Stage: Indonesia's lingerie market resembles China's 5-8 years ago, dominated by low-priced knit styles with weak brand awareness. This creates opportunities for higher quality, more stylish products.
4. Size Preferences: Indonesian consumers show stronger demand for plus-size lingerie compared to Chinese buyers, requiring product designs tailored to local body types.
Why TikTok Shop Over Established Platforms?
Despite Shopee and Tokopedia's market dominance, JHU Collection chose to focus on TikTok Shop due to fundamental differences in business models:
1. Model Differences: Traditional e-commerce sellers face significant challenges transitioning to live commerce, requiring complete overhauls in customer acquisition, content creation, and product strategy.
2. Team DNA: With deep experience in live commerce operations, content creation, and supply chain management, JHU Collection's team was naturally suited to TikTok Shop's emerging model.
3. Customer Acquisition Advantage: TikTok Shop offers relatively lower customer acquisition costs, especially in early stages, allowing rapid user growth through quality content and targeted advertising.
4. Local Seller Knowledge Gap: Many Indonesian sellers lack deep understanding of live commerce operations, creating opportunities for Chinese cross-border sellers with relevant experience.
Indonesia's Live Commerce Ecosystem: Following Trends, Not Forcing Change
The Indonesian live commerce landscape differs significantly from China's mature market:
1. Limited Influencer Effect: Local hosts lack role models for effective live selling techniques, preferring natural, authentic styles over aggressive sales tactics.
2. Relaxed Selling Approach: Indonesian hosts adopt a more "zen" approach to sales, prioritizing user interaction over transaction volume.
3. Content Simplicity: Live content remains relatively basic, often limited to product displays without deeper engagement strategies.
Contrary to some predictions, Xiong observes minimal integration of entertainment formats into Indonesian live commerce, as sellers primarily position themselves as salespeople rather than performers.
Brand Building and Marketing: Localization is Key
Regarding the much-discussed fully managed model, Xiong notes it lowers entry barriers and logistics pressures but transfers pricing control to platforms. For brand marketing, JHU Collection emphasizes:
1. Offline Channel Importance: Physical retail remains crucial in Indonesia for brand building, requiring multi-channel distribution strategies.
2. Localized Operations: Marketing must adapt to local culture, customs, and consumer habits, from advertising aesthetics to product positioning.
3. Social Media Strategy: Platforms like Instagram and TikTok are vital for consumer engagement and brand awareness.
4. KOL Collaboration: Partnering with local influencers who align with brand values can accelerate audience reach.
Overcoming Cross-Border Challenges
Xiong emphasizes two critical approaches to navigating Indonesia's complex e-commerce environment:
1. Deep Local Immersion: Founders should spend significant time in Indonesia to understand market nuances and build local team relationships.
2. Compliance Focus: Strict adherence to local regulations regarding payments, taxes, and intellectual property is essential for sustainable operations.
For product selection, JHU Collection prioritizes market demand alignment, supply chain advantages, and differentiated offerings—particularly focusing on plus-size designs tailored to Indonesian consumers.
Long-Term Brand Building in Indonesia
Xiong cautions against expectations of quick success, noting Indonesia's market size represents only about 3% of China's. Sustainable brand building requires:
1. Price-Performance Balance: Products must meet quality expectations at price points accessible to Indonesia's middle-income consumers (monthly earnings of $200-$400).
2. Channel Management: Extensive distribution networks are crucial for product accessibility and user experience.
3. Local Mindset Adoption: Successful brands must understand Indonesian consumer psychology rather than imposing Chinese market frameworks.
For brands entering Indonesia's live commerce market, Xiong's key recommendation is building localized teams that can bridge cultural and operational gaps, while recognizing Indonesia's current status as a relative blue ocean opportunity compared to China's saturated e-commerce landscape.