PT Bank Danamon Tbk (BDMN) said transactions using D-Cash – a newly introduced feature that allows customers to transfer funds using mobile banking app D-mobile without an ATM card – are estimated to reach Rp1.2 trillion ($88 million).
D-cash is projected to bring in $88 million worth of transactions per month, according to Danamon E-channel and Consumer Lending Head Djamin Nainggolan. He said his company targets 100,000 new D-cash users a month. To attract customers, Danamon will provide the service for free, for now.
“We will also develop more ways to add cash withdrawal points. For example, withdrawal could later be done in the nearest post offices or minimarket,” explained Nainggolan.
Nainggolan added that the introduction to D-cash is one of Bank Danamon’s contributions to support the government’s plan establishing a cashless society.
“Besides, developing the digital banking division has always been part of the bank’s strategy to strengthen its network,” he said.
Bank Danamon launched D-mobile banking application for its customers in 2014, as part of its effort to boost the growth of e-channel transactions. The application offers a feature named ‘SosMed D-Cash’ that would enable customers to perform retail transactions and transfer funds to their Facebook friends instantly.
Last year, the Temasek-owned bank recorded a net interest margin (NIM) drop to 8.2 percent, a new record low after a 8.4 per cent margin in the previous year. Prior to that, the bank’s NIM had never been below 9 per cent.
Nevertheless, the bank will pay Rp717.9 billion of dividends or Rp74.9 per share. The figure represents 30 per cent of the company’s net profit last year, totalling Rp2.5 trillion.
Danamon is controlled by Temasek through two subsidiaries, Asia Financial ( Indonesia ) Pte, Ltd., which owns 67.37 per cent of shares, and JPMCB-Franklin Templeton Investment Funds, which holds 6.81 percent. In total, the Singaporean company holds 74.18 per cent ownership, with the remaining 25.82 per cent owned by the public.
Sumber Alfaria has entered the heating up battle in Indonesia’s e-commerce industry by launching Alfacart.com, an online marketplace platform that will offer a wide range of products in the fashion, lifestyle, electronic, and daily necessities categories.
Alfacart will replace the company’s existing shopping site Alfaonline, which used to sell limited groceries.
Alfacart CEO Catherine Hindra Sutjahyo said the company is targeted to grow five to six fold with the fresh concept, utilising Alfamart’s 7,000 offline stores to increase its presence in the market. Using Alfamart’s stores to pay and pick up purchases is one of Alfacart’s strategy to distinguish itself from existing players such as Lazada and Tokopedia.
Known for its distinctive red and yellow logo, Alfamart is of the top two convenience store chains in Indonesia with about 11,000 stores as of last December. 1,200 stores are expected to be added during 2016.
“We will be very strong in the daily necessities category given our background. We are optimistic that Alfacart could be the top three e-commerce platfrom in the country,” she told DEALSTREETASIA, on the sidelines of Alfacart launching ceremony.
Parent company Sumber Alfaria said it aims to list one million products from third party sellers, and generate online transactions worth roughly one trillion rupiah ($70 million) this year. The firm is investing $2 million to upgrade its IT system.
“We understand there are some players in the market but the high cost of last mile [delivery] is still a concern,” said Sumber Alfaria president Hans Prawira, at a press conference on Friday. “We have presence in the market very close to shoppers.”
Logistics are a significant challenge in Indonesia’s archipelago of more than 13,000 islands. In addition to poor infrastructure, home addresses are often chaotically numbered and unorganized, causing major headaches for courier companies, said IT director Bambang Setyawan Djojo. “We know the address of every Alfamart, so it will make delivery easy,” he said.
Data show that e-commerce boom in Indonesia will only grow larger, despite its current minuscule contribution to GDP which sits at less than 1 per cent. Smartphone users are estimated to reach almost 75 million in 2017, while internet users will be about 88.1 million.
However, e-commerce it is a costly business. Lazada recently received an investment of $1 billion from China’s Alibaba Group Holding, while Japan’s Rakuten shut down its online shopping site in the country. Sumber Alfaria only generated 451 billion rupiah in net profit on revenue of 48 trillion rupiah in 2015, a margin of less than 1%.