Valued at approximately 62 billion U.S. dollars,
, far outpacing other countries in the region. The global coronavirus (COVID-19) pandemic became a catalyst for the rapid growth of the e-commerce market in the country. Due to social distancing measures and other health protocols imposed by the government throughout the pandemic, Indonesian consumers turned to e-commerce to get products and services. This also prompted many businesses to refocus their business operations online to stay afloat during the global health crisis. With the
and improved digital infrastructures, the outlook for the e-commerce market in Indonesia remains positive.
Indonesia's e-commerce market landscape
E-commerce could be the key to not only giving citizens in remote areas the opportunity to benefit from a wider range of consumer goods and services but also to increase the pool of potential customers for businesses. Therefore, providing platforms to boost online retail is one of the most sought-after business opportunities in the country. Even though signs of a successful e-commerce market have been visible for a long time, the industry is still at an early stage of development. However, the
gross merchandise value (GMV) of the e-commerce market in Indonesia is forecast to reach approximately 160 billion U.S. dollars by 2030, indicating the strength of the market. One of the main contributors to the promising market outlook is the growing
number of e-commerce users in Indonesia, which is expected to reach approximately 131 million by 2028.
Tokopedia, Shopee, Lazada, Bukalapak, and Blibli are currently
the most popular e-commerce sites in Indonesia. They all offer a wide range of products and compete to take the market leader position. Their success can be primarily attributed to the country's improved internet infrastructure, allowing for ease of internet access among Indonesian consumers. Nonetheless, each company’s marketing strategies, such as bringing in new shipping and payment methods, also contribute to their popularity among Indonesian e-commerce users. In terms of digital payment, digital wallets were the
most preferred e-commerce payment method in Indonesia, making up around 39 percent of all e-commerce payments in 2022.
Barriers to e-commerce adoption
Although the market has great stability and potential, many barriers still slow down the adoption of e-commerce in Indonesia. A recent survey indicated that delayed or slow delivery, high shipping costs, and lack of product quality assurance were some of the
main challenges when shopping online for many Indonesian consumers. In addition, there are also
growing concerns regarding data privacy breaches and data protection policies among online shoppers in the country. While a great portion of consumers do not mind sharing basic personal information, many consumers are unaware of the personal information collected and kept when they shop online. Transparency from e-commerce companies and stricter cybersecurity laws are necessary to build trust between consumers and businesses. This will create a safe e-commerce environment and may accelerate the adoption of e-commerce in the country.
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