Photo of Esra Martiliany, PT L’Oreal Indonesia and Debopama Sen, Citi.
PT L’Oréal Indonesia has embarked on a digital transformation as it looks to tap into fast growth in online retailing and the potential of new technology to generate efficiencies across the company’s operation. One of its initiatives uses its employees as a pilot customer base to test a new website portal before it is rolled out to the general public.
Jaehyeok Shin
CFO
Jakarta, Indonesia
PT L’Oréal Indonesia operates as a subsidiary of L’Oréal SA, a French personal care company headquartered in Clichy, Hauts-de-Seine with a registered office in Paris. It is the world’s largest cosmetics company with products ranging from skincare, sun protection, make-up, perfume and hair care. L’Oréal SA employs 82,600 staff in 150 countries.
in partnership with
L’Oréal Indonesia embarking on its digital transformation
The challenge
PT L’Oréal Indonesia is currently operating in a highly digitised world where online sales are beginning to make a real impact in terms of revenue generation for the company globally.
In Indonesia, to reflect this growing importance of online sales, it was decided the company would transform their offline company shop into a web-based digital platform. Citi Indonesia referred payment gateway partner (and also L’Oréal client), Doku, to help build this platform, with all collections sent to Citi.
The solution
The company understands the need to digitise, not just in response to the growing demand for digital retailing solutions from the general public, but also the needs of its internal staff and business vendors. It is convinced that addressing these digital demand drivers will help with the company’s broader objective of generating greater efficiency across the entire organisation and supply chain.
As well as digitising for its customers, the company has also built an accounting portal for its over 400 suppliers to upload their invoices instead of sending through emails. This enables the company to digitally archive them with ease. By putting an approval matrix inside the system, it can be easily checked whether the tax invoices are also included alongside the commercial invoices. This helps to neatly mitigate problems that frequently arise when the supplier does not input VAT details and the company is unable to reconcile during tax audits.
The company is also building a legal digital platform by importing a solution from a USA vendor. It will allow users who want to engage a vendor to easily generate a standard L’Oréal contract via the system. This will greatly improve communications internally in relation to back and forth emails between vendors and the legal team and so help shorten the long lead times for contracts to be signed.
Best practice and innovation
The company has developed a novel solution that uses its employees as a pilot customer base to test the collectivity and payment module of the new website portal in real-time, with Citi as the collections bank. Aside from that, the company is achieving improved efficiencies across all measures relating to customers and internal ‘clients’ with the help of the digital solution.
More broadly, the solution is expected to become increasingly popular with users overall and help increase company revenues. It will achieve cost efficiencies in the process and void the need for manual support in both payments and legal advice.
Key benefits
- The resulting website portal solution will be PT L’Oréal’s primary gateway for supporting expansion of its digital footprint in the Indonesian market and its reach more generally across the region.
- With regards to its accounting and legal initiatives, they amount to one of the first instances of a company using such solutions in a country where cheap labour means using large headcounts instead.
- By undertaking these initiatives, the company is demonstrating it is very keen to be ahead of the curve with the application of new technology in its industry. Digitising internal procedures is expected to achieve cost and general human resource efficiencies generally, as well as support external suppliers and internal clients in areas such as legal, tax and audit.
Key learning points
Digital is evolving much faster than we think, not only selling our products through e-commerce but on the supporting functions of the company as well. Driving efficiency with the help of technology development will give our employees room to focus on more added-value tasks.
