Indonesia flag Indonesia: Buying and Selling

E-commerce in Indonesia

E-commerce

Internet access
As of January 2018, there are 132.7 million Internet users in Indonesia. This figure is projected to grow to 133.39 million by 2021. As of March 2017, online penetration in the country stood at only slightly over 50 percent. By the end of 2016 there were 75 million smartphone users (29.2% of the population). Indonesia was listed as “partly free” in the Freedom on the Net index, which places the country ahead of less free Asian online markets such as China, Thailand or Malaysia but behind Japan, South Korea and the Philippines. This rating is due to blocked political and social content as well as various restrictions and violations of user rights, most notably through the governmental passing of the Law on Information and Electronic Transactions (ITE Law). The ITE law holds strong penalties such as prison sentences and high fines for anybody convicted of online defamation charges. This law has also been applied to blog posts and Facebook comments and has led to self-censorship among online writers and internet users as well as an increasingly tense online atmosphere.
E-commerce market
The most populous country in Southeast Asia by far, Indonesia is still in an early stage of development when it comes to internet, mobile and digital technologies. It is therefore one of the most sought-after market globally for e-commerce, with large local players and global heavyweights fighting for this enormous growing market. In 2017, the total e-commerce revenue amounted to US$ 8.59 billion, a figure that is expected to grow and reach US$ 16.48 billion by 2021. Still accounting for less than 1% of all sales in Indonesia, e-commerce is expected to expand in high double digits in the coming years. There are still issues with inadequate infrastructure, poor payment systems, and logistics that have to be addressed. For instance, although the number of credit card users jumped 60% in the past five years to around 15 million, 70% of e-commerce payments are completed with bank transfers and only 15% with credit cards. Also, delivery is too slow and expensive due to challenging geography paired with poor infrastructure, and absence of high-tech logistics companies. This represents valuable opportunities for e-commerce technology, applications and other supporting products and services.
E-commerce sales and customers
In a country of 255 million inhabitants with over 382 million active SIM cards, mobile devices are the main means with which Indonesians carry out e-commerce. There are currently 31.65 million e-commerce users in Indonesia, with an additional 22.24 million users expected to be shopping online by 2022. In 2017, e-retail sales accounted for 3.1% of all retail sales in Indonesia, this figure is expected to reach 3.9% in 2018. The most popular segments were fashion, gaming products and services, electronics and gadgets, beauty products, books, sports and entertainment, health supplements and automotive accessories. Although the Indonesian e-commerce industry has been thriving, there is plenty of room for further growth, as it only accounts for less than 1% of total Indonesian retail sales. Although the market is not as mature as e-commerce in Malaysia or Singapore, the Indonesian population of more than 260 million, makes the absolute numbers of growth in the country highly attractive, with millions of new online shoppers every year.
Social media
According to a survey by WeAreSocial, there currently are 130 million social media users in Indonesia. According to Statista, as of the third quarter 2017, 49% of the total population of Indonesia were active social media users. The most popular social platform was YouTube with a 43% penetration rate, followed by Facebook (41%), WhatsApp (40%), Instagram (38%), LINE (33%), BBM (28%), Twitter (27%), Google+ (25%), Facebook Messenger (24%), LinkedIn (16%), Skype (15%) and WeChat (14%). Indonesia has the 4th highest number of active Twitter users and the 4th highest number of Facebook users in the world. According to eMarketer, almost 90% of Indonesia’s social network users are under the age of 34 (54% of them between 16 and 24).

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Latest Update: November 2022

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