JAKARTA (TheInsiderStories) – The Indonesian e-commerce industry performance continues to show a positive trend along with the development of digital technology. Predicted, the trend of the e-commerce industry in Indonesia this year grew by 31.3 percent and reached profits of up to US$3.8 billion, developer Saas Anchanto data released last week.
This raises optimism that the adoption of credit cards, debit cards and e-money will continue to rise with the encouragement of banks and cellular operators as service providers. Moreover, online transaction are still one of the main choices of consumers in Indonesia.
This growth is certainly in line with the growth of the logistics industry in Indonesia, which has improved performance from year to year. Based on the World Bank logistics industry performance index in 2018, Indonesia jumped 17 to rank 46 in 2018, from previously ranked 63 of 160 countries in 2016.
Logistic industry players will certainly see this as an opportunity to provide excellent service by utilizing the development of e-commerce technology to answer people’s logistics needs. In fact, McKinsey predicts that there will be more than 1.6 billion packages sent every year from the e-commerce sector in 2022.
The Hinrich Foundation released titled “The Digital Komodo Dragon: How Indonesia can capture the digital trade opportunity at home and abroad,” on February 12, estimates the economic value of digital trade-enabled benefits to the Indonesian economy to be worth Rp 125 trillion, representing 0.9 percent of its GDP.
If digital trade is fully leveraged, it could help Indonesia’s domestic sector to grow by more than 18-fold by 2030.
While, PT PP Properti Tbk (PPRO), a European payment service company reported that in 2018 Indonesian payments and e-commerce had the highest growth of 78 percent per year.
Mary Meeker also reported that internet trends for e-commerce showed no signs of slowing down until 2018. Online sales rose and grew faster than the previous year. It is estimated that more people will use cellphones to shop online.
Frost & Sullivan, a business and management consulting company, estimates that the size of Indonesia’s e-commerce market in 2019 can reach US$ 3.8 billion (equivalent to Rp 52 trillion) with growth of 31.1 percent. In addition, online transactions (cashless, usually credit and debit cards) will overtake COD as a standard payment method in Indonesia.
Previously, the Indonesia E-commerce Association (iDEA) itself had estimated that Indonesia’s e-commerce market could reach 130 billion US$ in 2020.
Meanwhile, McKinsey predicts penetration of Indonesian people’s online shopping will increase to 83 percent of total internet users, or increase by around 9 percent compared to penetration of online shopping in 2017-2018.
Similarly, ShopBack, a lifestyle platform that curates e-commerce and encourages people to shop online in a frugal and meticulous way, seeing the e-commerce industry in Indonesia in 2019 will be more focused and growing.
ShopBack transaction data shows that the mobile application accounts for 75 percent of the order volume online. This proves that people are increasingly dependent on their mobile devices not only in socializing the media but also conducting online transactions.
Online transactions outside Java also get an increase, according to research conducted by AC Nielsen (2018), which said that there was an increase in online shopping transactions by 6 percent outside Java compared to the previous year.
As we know, Indonesia is a mobile-first country where more than 94 percent of the people are connected and access the internet through smartphone devices (Google & Temasek data). The average community spends 4 hours accessing the internet through mobile devices.
So more, around 68 percent of the connected community is an online shopper, who uses a mobile device or smartphone to find the desired product.
However, this potential has not been maximally utilized by business people from the retailer and Micro, Small, and Medium Enterprises (MSMEs) sales community because they do not have maximum access to the e-commerce system. In fact, MSMEs are the most promising sector for the Indonesian economy.
Therefore, optimizing this potential can be done by making a digital transformation for small and medium economic actors to adopt smarter technology platforms. In addition, this e-commerce system also needs to be adapted to the warehousing business to meet the needs of rapidly growing online buyers in Indonesia.
Written by Daniel Deha, Email: email@example.com