E-Commerce in Indonesia

PROSPECTS

Demand fuelled by improving internet access and tech awareness

The online shopping boom cannot be separated from the active role of e-commerce players offering a solution for people who want to save money and time. Congestion is the main reason why residents in densely populated areas such as Jakarta, Bandung and Surabaya choose to shop in online stores rather than visiting offline outlets.

Sales remain concentrated in more developed urban areas

The penetration of e-commerce in the country is still concentrated in the Java area, which accounts for about 76% of buyers, followed by Sumatra (14%) and Sulawesi (4%). Based on the age of consumers, around 88% of digital shoppers in the country are millennials, between the age of 20 and 37.

Shift towards online shopping to continue

Over the forecast period, e-commerce sales will continue to rise strongly in Indonesia, with the market still offering very strong growth potential given its early stage of development compared with overall retailing. There is still a great deal of untapped potential due to Indonesia’s large population and rapid rise in the number of middle-income consumers, the large number of millennials, as well as infrastructure developments.

COMPETITIVE LANDSCAPE

Focus on working with logistics companies to boost competitiveness

Strong logistics is key to successful e-commerce operations, with growth in this area thus boosting third party logistics providers. E-commerce players are aware of this potential, with some starting to develop their own logistics to complement online sales.

Gradual adoption of mobile wallets impacting sales

The number of smartphone users in Indonesia is increasing rapidly, with the country having the fourth most active smartphone user base in the world, after China, India and the US. Due to the high dependence of the population on smartphones, this is said to be the key to e-commerce.

Strong demand attracting new players

When it comes to e-commerce sales in Indonesia, fashion is the highest selling category in terms of volume sales. In almost every online marketplace (Lazada, Blibli and many others), the highest selling product category in volume terms is apparel.

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