Read the title of the article, many people have questions, which country e-commerce market growth rate of the world’s first? Is it China？the United States？Russia？Australia, or the United Kingdom? So now come to the fore: this country is Indonesia.
Indonesia’s e-commerce sector is undoubtedly an exciting one.
Indonesia’s large population, with the increasing penetration of mobile phones and the growth of the middle class, have provided fertile ground for the development of e-commerce in Indonesia.
During Indonesia’s national online shopping day (Harbolnas) on December 12, 2018, online shopping transactions reached 6.8 trillion rupees ($486.5 million), 2.1 trillion rupees more than last year.
According to PPRO group’s global study last year, Indonesia has become the fastest growing e-commerce market, with its e-commerce growth rate growing from 45% to a staggering 78% in just one year, worth $7.2 billion.
A variety of e-wallet cashback services from Indonesian e-commerce companies have also boosted consumer enthusiasm for e-wallets, pushing the country’s use of e-wallets from 11% in 2017 to 15% in 2018.
Amid this growth, the top three regional e-commerce companies Lazada, Shopee and Tokopedia managed to expand their market sevenfold from 2015.
Mobile e-commerce users account for the highest percentage of users in the world
Indonesia is the fourth largest country in the world by population. Indonesia has a population of more than 265 million and is a young country, with an average age of 29 and 60% of the population under 40.
Indonesia is also one of the world’s most mobile-wide countries: 95% (142 million) of Indonesia’s 150 million Internet users are mobile phone users. Currently, 60% of Indonesian adults own a smartphone.
When these demographic factors are combined, Indonesia represents a large, young, mobile-savvy digital indigenous population.
Such a set of data can also be seen from the side of the development of e-commerce in Indonesia
Indonesians spend 206 minutes a day on social media, compared with the global average of 124 minutes;
More than 80% of indonesians use social platforms such as Youtube, Whatsapp and Facebook.
76% of Indonesian Internet users shop on their mobile phones, the highest percentage of mobile e-commerce users in the world.
Indonesia’s Internet economy has exploded over the past few years. In addition to e-commerce, online games, advertising, subscriptionmusic and video, as well as online travel and car/delivery services are well received by young Indonesian consumers.
Indonesia’s “digital archipelago” is moving at full speed, according to an in-depth report released last year by Google and Temasek.
Indonesia has the largest Internet user base in the region (150 million users in 2018), the largest Internet economy in the region (us $27 billion in 2018) and the fastest growing (49% cagr 2015-2018).
The government supports the development of e-commerce
Of Indonesia’s more than 200 million people, 24 percent are millennials, and 88 percent want to start a business. The Indonesian government needed to develop digital infrastructure and create opportunities for them.
Indonesian President Joko Widodo will continue to focus on infrastructure, focusing more on digital infrastructure to support e-commerce opportunities and stimulate economic growth, the Jakarta post reported.
E-commerce is considered a good way for Indonesia to meet its 2025 GDP growth target (7 per cent). This target is not necessarily fancied, as some predict that Indonesia could account for 46 per cent of e-commerce value in South-East Asia by 2015.
The mobile economy boosts demand for online shopping
For Indonesia, the introduction of smartphones is nothing short of a revolution. The launch of the mobile economy has opened up a number of opportunities for consumers in the country and has boosted the growing demand for online shopping.
The bank of Indonesia says shopping online transactions in Indonesia reached $5.3 billion in 2016-17. Online shopping transactions are expected to reach $130 billion by 2020, which is considered to be a very promising and optimistic amount. No wonder local and international e-commerce firms are vying for the lion’s share of Indonesia’s e-commerce market.
Tokopedia is one of the most successful start-ups to emerge from this trend. The platform, launched in 2009, comes at the right time to connect a growing online consumer base with retailers and third-party sellers. The e-commerce platform received a $1.1 billion investment from Chinese e-commerce giant alibaba in 2017.
Platforms like Tokopedia also fuel the country’s enthusiasm for entrepreneurship. Traditionally, as one of the most resource-rich countries in the world, Indonesia’s labor force is concentrated in the copper, tin, oil and gas industries, or the agricultural sector, Indonesia’s largest source of employment. Today, among young people who are proficient in digital technology, the idea of starting an online business is becoming more and more popular.
The most popular shopping websites and products
In addition to Tokopedia, popular Indonesian e-commerce sites include Shopee, Lazada, Bukalapak, Blibli, Orami, jd.id, Bhinneka, Sociolla and Zalora.
The most popular categories for indonesians are clothing, accessories, bags, shoes, personal care products and cosmetics. In terms of market share, fashion was the main product category, with sales of $3.05 billion, followed by Toys, Hobbies and DIY, with sales of $2.36 billion.
Clothing and footwear drove sales growth, with 93% of respondents saying they had bought such items online in the past 12 months, according to the Morgan Stanley survey. The study also noted that changes in customer behavior could affect their interactions with traditional brick-and-mortar stores. Three-quarters of consumers said they would check promotions or prices online before buying anything offline.
Seven out of 10 said they would continue to be shopping online, even if it meant they had to pay shipping fees. This reflects consumers’ willingness to pay for convenience, and fast delivery is the main reason people prefer a site.
Indonesia’s payment system is not perfect
Bank transfers remain the most popular payment method in Indonesia when shopping online. The use of this payment method in developed countries and regions such as Singapore and Hong Kong has been relatively low or not.
This is because Indonesia’s level of financial literacy remains low. Only about 36 per cent have bank accounts. In addition, credit card penetration is the lowest in South-East Asia, at 1.6％.