JAKARTA (TheInsiderStories) - The Indonesian e-Commerce Association (idEA) is optimistic that the number of transactions and volume of National Online Shopping Day will pass last year’ valued of Rp9.1 trillion (US$650 million), said the chairman. The 11.11 and 12.12 online shopping festival was made by e-commerce player to encourage economic activity the country.
The chairman of idEA, Bima Laga, in an official statement, explained although purchasing power has decreased, the purchase of staple products such as food and clothing is still in the highest sales category. Not only that, the purchase of goods that support school and work from home was also high, followed by plants, cycling, beta fish by middle class society.
In the latest report, JP Morgan sees Indonesia’ online shopping industry is forecast to expand at an impressive compound annual growth rate of 34.6 percent to 2021, driven by increasing internet penetration, which currently sits at a lowly 32.3 percent, and an ongoing trend of steady gross domestic product growth. The scale of this development is clearly also a result of the industry’ immaturity. At present, annual per capita spend is low, standing at $344 a year.
Last year, when Indonesians do shop online, they tend to spend on travel. This is far and away most popular e-commerce market segment, taking a 58.9 percent share of all online sales. Local sites Tiket and Traveloka are the major travel platforms.
Clothing and apparel is Indonesia’ second most popular online shopping category, taking a 14.6 percent slice of the domestic e-commerce market. Local online marketplaces, which allow both brands and individuals to sell products, dominate as the sites generating the most traffic of the’ top three e-commerce sites by visitor numbers are sales platforms Lazada, Tokopedia and Bukalapak.
This could change, however, as international merchants begin to target this relatively untapped opportunity. Online shopping giants Amazon, Alibaba and JD.com all have plans to expand their presence in Indonesia. The agency said, e-commerce market growth in Indonesia will also be driven by a youthful population with the average age is just 30.5 years.
In addition, Indonesia is a country of smartphone devotees, with penetration is only at 40 percent, those that do own mobile devices use them constantly. Shopping on the move is already the country’ primary e-commerce mode, accounting for 52 percent of all completed transactions.
The Southeast Asia largest economy is one of the fastest-growing mobile commerce markets in the world, now worth $7.1 billion, a figure that is projected to rise rapidly as smartphone penetration increases. Indonesia’ mobile commerce market is expected to grow at a compound annual growth rate of 45.2 percent to 2021 and sales via this channel will be worth a projected $31.5 billion.
JP Morgan also reported, apps are the primary mobile sales channel, taking a 74.8 percent share of the mobile commerce market or $5.3 billion in sales. YouTube, Facebook and WhatsApp are the most popular social media channels, and, as in other countries, e-commerce merchants in Indonesia are using the power of influencer marketing.
Social media represents a highly effective way to reach consumers: capital city Jakarta, for instance, has the highest number of active Twitter users in the world. Selling via social media sites such as Pinterest and Instagram’ stories function is a key trend.
As a result of micro-enterprises selling via social media. Social commerce is now estimated to account for 40 percent of all e-commerce sales in Indonesia. These more informal sales platforms, which are dominated by micro-enterprises. They also represent an exciting opportunity for larger merchants to engage with young, technologically advanced Indonesian online shoppers.
Then, cards are the dominant payment method in Indonesia when shopping online, taking a 34 percent share of the market. This is in spite of low card penetration, which sits at just 0.59 debit cards per capita and 0.07 credit cards per capita. JP Morgan rated, cards will continue to hold the pre-eminent position in the marketplace, growing at a compound annual growth rate of 39 percent to 2021.
While, bank penetration in Indonesia is 48 percent, leaving significant room for growth in the debit card market. Despite this low penetration, bank transfers are the second most-used e-commerce payment method in Indonesia, accounting for 26 percent of sales. This method is expected to decline slightly to take a 24 percent share of the market by 2021, by which point it will be overtaken by digital wallets.
Currently, the third most-used e-commerce payment method, digital wallets are rapidly increasing in popularity. Aided by rising smartphone penetration, digital wallets are used for one in five of all online shopping in Indonesia. Popular brands include PayPal and domestic brand Go-Pay, the digital wallet arm of owned by tech firm, Go-Jek.
Cash still makes up 14 percent of the Indonesian e-commerce payments space, likely due to the fact that more than half the population remains unbanked. Cash on delivery is a widespread payment option, although this method is predicted to decline to take a six percent share of online payments by 2021.
US$1: Rp14,000
Written by Editorial Staff, Email: theinsiderstories@gmail.com
