Jakarta. MatahariMall.com, Lippo Group’s e-commerce arm, has appointed Credit Suisse and Bank of America Merrill Lynch to lead its first round of financing worth $200 million, a move that could help the conglomerate dominate the growing domestic online retail industry.

Rothschild was also appointed to serve as financial advisor to the Lippo Group in the deal, which could crown MatahariMall.com the most valuable e-commerce company in the country.

“We have received active interest from investors. Over the past few months we have made good progress and now is the right time to explore this,” John Riady of the Lippo Group said on Monday.

“We are excited to be working with Credit Suisse and Bank of America to find partners who share our vision.”

Lippo, with which GlobeAsia is affiliated, announced earlier this year its $500 million investment plan for an e-commerce unit, building on the group’s strong retail penetration across the country to tap into the online retail market.

The conglomerate targets to earn $1 billion in sales through the web-based business — set to be the largest in Indonesia — and become “the country’s Alibaba,” it said in a statement, referring to the Chinese e-commerce giant.

“E-commerce has the power to transform the retail industry, and Indonesia represents a huge market opportunity,” said Jan Metzger, managing director and head of technology, media and telecommunications for Asia Pacific at Credit Suisse.

“Given Lippo’s track record in building leading companies in various sectors, such as property, retail, healthcare and pay TV, the group has the scale and expertise to position itself as a leading player in the e-commerce space.”

Proceeds from the funding round will be used to execute MatahariMall.com’s business strategy.

“This is the single largest opportunity in the region. Having this capital will allow us to execute our business model without distraction to achieve the output we believe it will: to dominate e-commerce in Indonesia,” said MatahariMall.com president director Hadi Wenas.

Chris Gammons, head of Southeast Asia investment banking at Bank of America Merrill Lynch, saw burgeoning potential in the archipelago’s web capabilities, saying: “Southeast Asia’s most populous country is increasingly active online and there is significant momentum across Indonesia’s e-commerce landscape.

“This is being driven by the three powerful trends of strong economic growth, growing urbanization and rapid technology adoption.”

This year Internet penetration is expected to exceed 30 percent of the country’s 250 million population, MatahariMall.com said in the statement.

Online retail contributes to only 1 percent of total retail sales, but the figure is projected to grow at least 10 times over the next five years, it added.

And “with the key elements for an e-commerce platform already in place, Lippo Group is well positioned to be at the forefront of this compelling sectoral dynamic,” Gammons said.

GlobeAsia

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Source: The Jakarta Globe