Indonesia’s second largest telco shuts down its ecommerce site

By Nadine Freischlad for Tech in Asia

It’s part of the telco’s shift in strategy away from launching new business units in-house. Instead, it’s collaborating with experienced partners and focusing on core strengths, he told Tech in Asia.

Indosat Ooredoo, Indonesia’s second largest telco by revenue, says it’s shutting down its ecommerce site Cipika.

Cipika’s website now sports a thank you note to customers, saying that it will cease operations by June 1st. It has already stopped taking orders by May 22, according to the note.

Shutdown notice on Cipika’s homepage.

Prashant Gokarn, chief strategy and digital services officer at Indosat Ooredoo, today confirmed the shutdown.

Selling a wide range of products directly to consumers was not one of them.

“B2C ecommerce will take a long time to reach profitability,” Gokarn explained the decision to wind down Cipika.

Launched in 2014, the ecommerce site sold products like snacks to electronics. It started phasing out a number of categories at the beginning of this year, including food. “The category was performing well, but not scalable,” says Gokarn. Now, the service is shutting down completely.

New paradigm

The telco’s support of the SB Isat fund and startup accelerator Ideabox, which launched late 2013, is part of the shift to turn outward for innovation, which began a few years ago. It partnered with VCs who were more experienced in nurturing innovative business models.

He mentioned Indosat Ooredoo’s digital wallet, Dompetku, as an example of how the telco is changing its approach to innovation. It will soon also work with other wallets and related companies, outside of the telco’s own ecosystem.

Moving forward, Indosat Ooredoo is re-focusing on its core strengths, which lie in its consumer base and distribution network.

Working with the large amount of data and connections it has, the telco is getting into new lines of business. Gokarn gave an example: It could help ride-sharing apps match driver data with telco tower data to prevent fraud.

The discussion about what will happen with Cipika’s staff is still ongoing, he says. But he confirms that some of the people who worked on the project will likely be let go, while others could be transitioned to new roles within Indosat or its subsidiaries.