This is the comparison between Lazada and Matahari Mall Business Model specifically for Indonesia market.

1. Business Model
vs
Group 2
Iman M.G. & Indah Sari M.
May 2016

2. Background
 Lazada Group was founded by Rocket
Internet back in 2011 with the intention of
establishing the Amazon.com business
models in South East of Asia
 As of 2012, Lazada operates site in Indonesia
and introduce themselves as an ecommerce
platform
 For 2014, Lazada's net operating losses were
$152.5 million on net revenues of $154.3
million. However its percentage of losses
relative to its Gross Merchandise Volume -
the value of all the products sold through the
site - was smaller in 2014 than in 2013 due to
growth in its GMV from $95 million in 2013
to $384 million in 2014, driven by
marketplace sales.
 As of 2015, Lazada's challenges for growth
were the preference for brick and mortar
shopping among customers, with just about
1% of people buying online compared to 10%
of US shoppers; the lack of credit cards and
concomitant requirement to arrange cash on
delivery systems, reliable delivery especially
in less developed rural regions, and the
threat of competition from Amazon and
Alibaba.
 In March 2016 Lazada claimed it recorded a
total of $1.36 billion in annualized GMV
across its six markets in South-East Asia,
making it the region’s largest e-commerce
player.
 In April 2016, Alibaba Group announced that
it intended to acquire a controlling interest in
Lazada by paying $500 million for new shares
and buying $500M worth of shares from
existing investors
 Site Rank in Indonesia refer to Alexa.com
: 22

3. BACKGROUND in-Store (1)
 PT Matahari Dept. Store Tbk is a listed Public Company at IDX (LPPF) having 140 retail
stores in 66 cities all over Indonesia.
 Selling women, men & kids clothing, accessories, cosmetics and household product for the
growing middle class segment and known for its own brands that are fashionable &
affordable. Since 1972
 Supported by >1,200 local suppliers and >90% direct purchasing from sources across
Indonesia under own exclusive brands
 Company ownership: 77.52% Public, 20.48% PT Multipolar Tbk (Lippo Group) & 2% Asia
Color Company
 Net Profit 2015 IDR 1780.8 bio compare to 2014 IDR 2014 IDR 1419.1 bio, average year on
year increment from 2010 is 41%
 Current Price shares IDR 18.600 (May 26, 2016) compare to IDR 11.000 (Mar 1, 2013) and
IDR 2.500 (Feb 1, 2013)

4. BACKGROUND (2)
 WHY Lippo considering going online while the offline stores doing very well?
i. Leveraging its existing in-store unit businesses (matahari, hypermart & books & beyod)
ii. Developing omni channels to accommodate the change in customer behavior that is
empowering them for purchasing decision making and executing their purchase in any channel
as per their convenience
iii. To tap info Indonesia’s online transaction fastest growing from US$ 14 bio in 2014 into US$ 135
bio in 2020
 Officially launched by September 9, 2015 under PT Solusi Ecommerce Global (Lippo Group) with total
investment up to US$ 500 million
 Adding new inventories for its selling catalogue from its in-store : gadget, laptop, electronics, hobbies,
lifestyle, books, groceries (under Hypermart), entertainment, automotives, vouchers & more
 Hybrid mode starting day 1, market place and own products
 Target sales : US$ 1 bio in next 2 or 3 years (2016 – 2018)
 Target revenue: 20% of US$ 25 bio after 5 years from online
 Vision: to be Alibaba of Indonesia as the 1st e-commerce in Indonesia
 Site Rank in Indonesia refer to Alexa.com : 39

5. Business Model Blocks

6. 1. Customer Value Proposition (1)
No Item Lazada Mataharimall
1 Target Segment People who wants to purchase items online People who wants to purchase items through omni
channels
2 Offering:
a. Pricing Relatively lower price Higher Price then Lazada
b. Delivery & its Cost i. Delivery to registered address
ii. Free delivery with paid option for faster
delivery
i. Delivery to registered address, Pick-up at in-
store (O2O), & e-locker at PT POS Indonesia
counters
ii. Free delivery
c. Interface Web application
Native apps (ios, android, bb, microsoft)
Web application
Just recently launch its natvie apps for ios and
android
d. Payment Option
* Selective goods
i. Standards: COD, Bank Transfer, Credit Card, BCA
& Mandiri, click Pay
ii. 0% Installment by 3, 6 or 12 months with credit
card (minimum trx IDR 1 mio)*
iii. Installment without credit card 7 days process
with DP*
iv. Hello Pay with Indomaret
i. Standards: the same
ii. All goods available for 0% installment with
credit cards without minimum trx amount
iii. Installment without credit card 3-4 days
process with DP*
iv. Pay at in-Store (O2O)
v. Pay at PT POS Indonesia counter
e. Products i. Multiple Categories, variety of own and
Sellers/Merchant’s product products
ii. Exclusive distribution channels for several
Brands (eg. Motorola Moto G, Xiaomi Redmi 1s,
Relatively same with additional co selling products
from Hypermart and Books & Beyond (under Lippo
Group)

7. 1. Customer Value Proposition (2)
No Item Lazada Mataharimall
2 Offering:
f. Customer Care & after
Sales Service
i. Contact via call center, e-mail, social
media, & live chat
i. The same
ii. In-store (O2O)
g. Program/Promotion i. Daily discount or voucher from
different Credit Card’s bank issuer
ii. Promo Gajian
iii. Flash Sale
iv. Clearance Sale
i. The same
ii. Give of the Day: Free daily gift by
submiting customer own e-mail
iii. Super selamat: live insurance for a year
for buying motorcycle
iv. Super cintaku: installment without
credit card
v. Super sakti: voucher IDR 100K for
electronic purchasing plus a year
product insurance
vi. Hot deals & Deal of the Day: offering
special discount based on time limit
3 Benefit i. Convenience online shopping
experience; fast, save, trusted
ii. Having feature to track order
i. The same
ii. Accommodating customer’s purchase
decision making via its omni channels

8. 2. Key Resources
No Item Lazada Mataharimall
1 Funding i. Kinnevik invests $40m on Nv 2012
ii. Summit partners invests $26m on Dec 2012
iii. Tengelmann invests $20m on Jan 13
iv. US$ 1 bio from Alibaba Group by paying $500
million for new shares and buying $500M
worth of shares from existing investors
US$ 500 mio from Lippo Group
2 Management &
Employee
i. Supported by Rocket Internet which have world
class reputable management in the industry*
ii. Hiring from the local experts
* See appendix 1
i. Supported by Lippo Group business
conglomeration
ii. Hadi Wenas (CEO), prev. set-up e-comm
platform for Lazada
iii. Emir Satar (Chairman), former Garuda
Indonesia’s CEO that made Garuda as world
class airline.
3 Digital Engine
Technology
i. Real-time optimization
ii. A/B Testing Models and prototypes
iii. Agile development method (focusing on speed,
security and stability)
iv. Unlimited inventory and category
v. Computing Resource, scalability and reliability
The same with slightly different specs & capacity
4 Customer Centric
Innovation
i. Customer reviews
ii. Recommendations
iii. 1-Click Ordering
iv. Tokenized cards
v. Personalized offering
vi. Detailed description over sale product
miMMi – personal stylisth, give fashion tips and
advice to customer

9. 3. Key Process
No Item Lazada Mataharimall
1 Catalogue
Production
The process to put detail of good sold available into
the market for customer selection
Relatively the same
2 Specific Own Process
for Product delivery
Fulfillment by Lazada (FBL):
Help sellers/merchants to conducts:
Stock management: ensuring availability, packing,
Reporting : daily sales report, returned, cancel and
delivered order
Fast delivery by utilizing network order fulfillment
supported by 4500 specialist and more than 40 hub
across asia
The 1st eCommerce in South Asia that provides
"O2O" (online-to-offline and offline-to-online), that
enable customers to pay, pick up, and return the
product at hundreds of matahari in-store across
Indonesia.
3 Supply chain i. Best selling products are kept in stock by
Lazada
ii. Long tail items are provided by merchants
iii. Lazada can easily identify best selling products,
as all sales go through the platform
Collaboration with in-store and group member
(Hypermart & Books & Beyond) as well as UKM and
big sellers/merchants
4 Customer centric
user experience
i. Monitor seller ratings posted by user
ii. Discontinue seller/merchant with bad ratings
See point 2 above

10. 4. Profit Formula
No Item Lazada Mataharimall
1 Revenue: Ads Off-Deck Ads paid by data network provider to
Lazada
Off-Deck Ads paid by data network provider to
mataharimall.com
2 Cost of Customer
Acquisition
Cost to generate traffic coming to lazada site: ads
placement, SEO, SMO, bonus, promotion
Relatively the same
3 Operational Cost
Structure
i. Server
ii. Warehouse
iii. Employee Salary
Relatively the same
4 Commission Fee At least 2% of Seller Price, depend on the category Relatively the same
5 Sales Margin Relatively lower sales margin with higher traffic Relatively higher sales margin with lower traffic

11. 5. Key Partnership
 Site Rank in Indonesia refer to Alexa.com : 39, need to boost
more traffic to attract sellers/merchant
 Sellers including SMEs (Small Middle Enterprises)
#JOA (Jual Online Aja) section in market place for SME with education
to develop SME product and selling skills
 Collaboration with the national postal service PT POS
Indonesia to :
1. allow shoppers to reserve an item online, then pop down to
selected local post offices to pay for it, before shipping
commences. “Pickup & Pay COD” feature will launch in 199 cities
across Indonesia
2. install MatahariMall.com “eLockers,” allowing customers to
physically pick up their items purchased online from lockers
located in 10 post offices in the Greater Jakarta area and
Bandung.
3. Pos Indonesia will provide logistic and delivery services to
Mataharimall.com for domestic shipments.
 MatahariMall Affiliate Program
Sites owners are invited to put mataharimall banner and goes to its
landing page to create more traffic & pay commission to site owners
based on click.
 Site Rank in Indonesia refer to Alexa.com : 22, attracts 4
millions visits a day
 Partnership with Baidu browser allows users of Baidu to
access Lazada via a shortcut, an icon on its home page. In
return, Lazada provides a special page that displays special
deals for Baidu users in Indonesia
 Direct cooperation with principal for exclusive selling
program e.g. with OnePlus android, Redmi
 Lazada Affiliate Program
Sites owners are invited to put mataharimall banner and goes to
its landing page to create more traffic & pay commission to site
owners based on click.

12. Conclusion
1. While the business of in-Store Matahari is doing well it needs new business model going online for:
i. Leveraging its existing in-store unit businesses (matahari, hypermart & books & beyod)
ii. Developing omni channels to accommodate the change in customer behavior that is empowering them
for purchasing decision making and executing their purchase in any channel as per their convenience
iii. To tap info Indonesia’s online transaction fastest growing from US$ 14 bio in 2014 into US$ 135 bio in
2020
2. Lazada leverages its digital advantage to optimize supply-chain in a Key Process. Reducing inventory and
logistic cost are the most important key to be competitive and be able to lower price than Mataharimall
3. Funding is one of the most important Key Resource to get ahead with technology advantage in e-com business
but creativity and innovation in serving the market will determine the leader. Both Lazada and Mataharimall are
being challenge to proof this.

13. Appendix 1
Who are they?

14. What’s their mission?

15. Where are they?

16. What is their Key Focus?