Digital sales offer long-term opportunity to automotive aftermarket in Indonesia, says GlobalData

Following the news that auto part suppliers in Indonesia are turning to online platforms to weather the COVID-19 crisis;

Bakar Sadik Agwan, Senior Automotive Consultant at GlobalData, a leading research and consulting company, offers his view:

“Indonesia currently leads Southeast Asia in terms of the number COVID-19 cases and the country continues to practise large-scale social distancing measures. This in turn has kept customers away from the market and e-Commerce is expected to become new normal for the public to cater their all possible essential and non-essential needs.

“Automotive industry, which is amongst one of the deeply impacted industries by the COVID-19 in Indonesia, is expanding its presence in the digital retail as the market looks far from recovery with the current rate of rising cases in the country. Both OEM and aftermarket have been responsive to the situation. Majority of the OEMs are turning up to online enquiries, bookings and virtual tours to get new vehicle sales. The players in the automotive aftermarket, including the e-Commerce companies, are also ramping up their presence in the digital space through availability of consumables, wear and tear parts, accessories and others through their online portals and also offering services home delivered.

“Astra Auto Parts, Tokopedia, Alibaba, Ubuy are some of the key existing e-Retailers in the automotive aftermarket in Indonesia and there are new players entering/expanding their presence as well. Carbatama, a manufacturer of lubricant for the Exxon Mobil launched its online store in April 2020. Tokopedia, which already markets parts and components has now partnered with Carro – a leading used car platform in Southeast Asia, to expand its business to used cars.

“Diversifying revenue stream through online sales of parts and services is the right move by the aftermarket players to balance the declined sales from the brick and mortar stores. Additionally, digitization of sales means more than a mere response to COVID-19 pandemic, as the local market was already undergoing digital transformation due its growing Internet penetration, which stands at over 60% of total population, as of January 2020. Expanding presence in the digital sales will offer sustainability to local players and will act as long-term opportunity to the automotive aftermarket in Indonesia.”

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