E-commerce sites selling food and drink were already available in the Indonesian market prior to the COVID-19 crisis, but the marked shift to online shopping seen during the pandemic has made consumers significantly more inclined to turn to online channels for their groceries. During the pandemic, Tokopedia and Shopee, two of the main e-commerce players, recorded an increase in sales transactions, especially for food and beverages, as consumers increasingly turned to these platforms to do their grocery shopping.
Supermarkets and convenience stores have offered home delivery during the COVID-19 crisis, but their own services are often limited to nearby residents within a radius of several kilometres and for orders of a minimum amount (IDR 100,000 purchases, for example). This limits the retailers’ capacity to reach their core consumers who visit their physical stores.
Indonesian families are used to buying their groceries frequently, either by going to the pasar (wet market) or from vegetable and fruit sellers that regularly come to neighbourhood areas. To minimise the risk of viral transmission through social contact, it has become quite common for consumers to place orders to their regular vegetable sellers for specific days via WhatsApp and for cash payments to be made on delivery at the consumers’ homes.
The online purchase of food and beverage products is set to become increasingly popular during the forecast period. The shift to online shopping seen during the COVID-19 crisis has significantly expanded the e-commerce consumer base, extending it beyond its original core demographics, and assured consumers of the channel’s reliability, as well as its convenience.
Improvements to infrastructure, cold chain and logistics capabilities will benefit food and drink e-commerce during the forecast period, as perishability is a key constraint on the development of online grocery shopping. Shorter delivery times and lower shipping fees will also encourage more impulse e-commerce purchases of food and drink beyond scheduled grocery deliveries.
The COVID-19 crisis has seen significant interest in foreign products and food from other countries as travel opportunities have been severely limited. Given the high penetration of hallyu (Korean wave – the strong rise in popularity of Korean culture), Korean food products are likely to see a significant increase in demand in Indonesia, and e-commerce has the opportunity to target this trend before store-based availability expands sufficiently to meet demand.
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Internet retailing sales of food and drink (all packaged and fresh food and drink (hot drinks, soft drinks and alcoholic drinks).See All of Our Definitions
This report originates from Passport, our Food and Drink E-Commerce research and analysis database.
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