Online vs. Offline Sales: Which Should Businesses Prioritize?
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Most growing companies, or rising brands, focus more on selling through online channels than offline channels.
This is recorded in *Beyond the Digital Frontier*, a research report from a collaboration between the Katadata Insight Center (KIC) and the social commerce service provider Evermos.
KIC surveyed 32 rising brands that contributed the largest gross merchandise value (GMV) on the Evermos application.
The results show that 91% of these rising brands market their products through e-commerce channels such as Tokopedia, Shopee, Lazada, and others.
Then 75% market products through social commerce, such as TikTok Shop, Instagram Shopping, Facebook Shops, WhatsApp, and others.
Meanwhile, the proportion using offline marketing channels such as distributors, retail stores, wholesalers, agents, and bazaars is much smaller, as shown in the graph above.
"It is clearly seen that most rising brands prioritize online channels, considering them more important than offline channels," said the KIC team in their report.
"This condition proves the importance of the online market in the current business landscape," they continued.
According to KIC, this group of rising brands prioritizes online sales because they can access a wider market without significant costs.
Online channels can also help rising brands reach specific target markets, as there are data analysis features to understand customer preferences.
However, KIC found that the number of Indonesians actively shopping online is still very small, estimated at around 33.4% of the total population.
"Focusing only on online channels means ignoring more than half of Indonesian consumers," said the KIC team.
KIC also found that local companies that are able to generate sales exceeding Rp500 billion per year generally have stronger offline marketing performance than online.
"Although online channels are important for growth in this digital era, market leaders are those with strong roots in offline channels," said the KIC team.
"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."
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