Indonesia's e-commerce market is expected to reach a total output value of US$130 billion in 2020

As one of Asia's emerging economies, Indonesia's e-commerce market is growing rapidly, and it is expected that the country's total e-commerce market output will reach US$130 billion in 2020, second only to China and India in Asia. With the support of the country's "mobile first" strategy, Indonesia's e-commerce market will grow by an average of 50% per year in the future, greatly increasing opportunities for retailers.

Indonesia will become the third largest e-commerce country in Asia

Today, Indonesia's e-commerce market is at a stage similar to the start-up stage of China's e-commerce market. Platform construction has not yet been completed, and a large number of dealers recommend their products through social networks. In addition, it is also very similar to the start-up stage of American e-commerce, because users are still cautious about online payments and sellers. Therefore, in the future, Indonesia's e-commerce market may become a hybrid test field for the e-commerce experience of China and the United States.

"Mobile First" Strategy

At present, Indonesia has become one of the countries in Asia that has achieved the most significant results in implementing the "mobile first" strategy. Data from research institutions show that 70% of Indonesia's Internet traffic came from mobile devices in 2015.

In addition, Indonesia has the highest usage rate of Facebook mobile version in the world, with 63 million users in 2015. It is estimated that by 2018, 99% of Indonesian Facebook users will rely on mobile devices to log in to the social network.

Why is Indonesia the lucky one?

At present, Indonesia's retail market is relatively fragmented, and the growth rate of the traditional retail model is only half that of e-commerce. Therefore, a large number of small retail investors have gradually begun to embrace the e-commerce model, and the entire e-commerce market has expanded rapidly.

In fact, there is no dominant retailer in the Indonesian retail market, so the relatively scattered small and medium-sized retailers can go their own way. Coupled with the open nature of the e-commerce market, the market has become a place where a variety of flowers bloom.

As the country with the most islands in the world, Indonesia's urban development is relatively backward, and the government is somewhat inadequate in infrastructure construction. Therefore, large offline shopping malls are not popular in Indonesia, which leaves ample opportunities for e-commerce. Through e-commerce, people in rural and semi-rural areas can buy things that are difficult to buy at home.

Indonesia’s “mobile first” strategy is also a booster for the e-commerce market. The extremely high penetration of mobile devices allows e-commerce companies to obtain a large amount of data, so that they can promote their products in a targeted manner according to different users.

In addition, unlike other "mobile-first" countries, Indonesia's social network is relatively simple, with Facebook being the only dominant one (92% of Indonesians have a Facebook account), which reduces the difficulty of promoting e-commerce. In contrast, in China and India, various social networks are in a state of flourishing, and it is difficult to say which one is the market leader.

What are the disadvantages of developing e-commerce in Indonesia?

Although Indonesia's e-commerce market is growing rapidly, it still has many loopholes to be fixed. One of them is the lack of online payment tools. Indonesians are still resistant to online payment and think it is not very reliable.

In addition, due to the large number of islands in Indonesia, the logistics and express delivery systems of e-commerce are under tremendous pressure. As a developing country, it is simply a fantasy for Indonesia to complete infrastructure construction overnight.