Home  › Social › Social Media
ecommerce

Is Indonesia Ready for E-Commerce?

  |  March 10, 2014   |  Comments   |  

Indonesians love social, mobile, and online shopping, so it's no surprise that e-commerce is growing in the country, but is the market ready?

Whenever I think about Indonesia’s development into a digital economy I’m always reminded of that scene from the movie Shrek 2, when they’re on the way to the kingdom of Far, Far Away. The donkey keeps asking: "Are we there yet?" (Fiona: no) "Are we there yet?" (Fiona: NO!) "Are we there yet?" (Shrek: Yes) "Really?" (Shrek: NO!).

In a very similar way to that journey, it feels that we’re nearly there, with Indonesia on the verge of maturing into a digital empire. We keep on getting closer, but there is always a bit more road ahead.

Many of my friends from Hong Kong and Singapore who travel to Indonesia for business, return very impressed with how fast the digital world has progressed recently. My customers that operate in Indonesia are also posting very fast growth results and the start-up scene also plays a big role there. I’m all excited ahead of the first SES in Jakarta, and in this post would like to review what makes this country perhaps the next digital country in Asia.

It’s well known that Indonesians love social, mobile, and also digital, and that the e-commerce world is growing. Let’s review these topics one by one.

250 Million People, 73 Million Online Users

The sheer size of the population provides many opportunities for digital companies to grow. The fourth largest country in the world today has about 73 million online users and this is expected to grow to 93 million users by 2015, of which about 58 percent are estimated to be of the younger generation who were born into the Internet world. Here are a couple of statistics to illustrate this true potential: More than 50 percent of the users are working people who belong to the middle class, and with a staggering GDP increase of 5.72 percent. Indonesia is growing fast!

179 Million Mobile Users by 2015

With challenges in infrastructure and high-speed Internet not being available in this large country, Indonesians are using mobile phones, and a lot! It’s expected that by 2015 more than 71 million people will be using smartphones. Indonesians mostly use gaming apps and surprisingly only 4 percent of mobile users have Apple devices. The rest are using Android (53 percent) and, wait for it, Blackberry at 35 percent! The regional marketing manager of RIM came to talk to my MBA class and said that Indonesia was the only country in which RIM opened dedicated Blackberry shops.

Facebook Rules

Social network numbers are big in Indonesia. Just to illustrate the power of this country, the same report from eMarketer says that this year close to 80 million users will use social networks. This represents about 95 percent of the total Internet users of the country. The majority of users are visiting Facebook and YouTube is also an important social network. In terms of instant messaging, BBM has achieved great market share there whereas competitors like WeChat, Line, and WhatsApp are still trying to make inroads into the market. (An interesting rationale for the reasons WhatsApp will not be successful in Indonesia can be found here.)

Are We There Yet With E-Commerce?

Apart from the group-buying companies that, like any other country in Asia, boosted the e-commerce spend, there are players like Kaskus.co.id, TogoBagus.com, Berniaga.com, and bhinneka.com that are stand-alone operations or are operating as part of a joint venture with companies like Singaporean SPH and others. Other international players that have put Indonesia on their radar are Rakuten, eBay, and the giant start-up incubator Rocket Internet that operates there with Zalora (their Zalando Lounge copy cut) and Lazada (an Amazon-style website).

With many islands and a middle class that doesn’t have any online shopping awareness as yet, as well as limited credit card availability and logistical issues, payment and creating a culture of shopping online are the greatest barriers in turning this nation into a very big online shopping hub. However, everything has its time and I personally think we’re 18 to 24 months away from seeing a real change in this area. Despite the relatively small order sizes, online purchasing is growing rapidly, with expected revenue of US$10 billion by 2015, up from an estimated US$1-3 billion today.

To overcome the payment challenge, online retailer Tiket.com offers more than 14 different payment methods. An interesting related read from the Financial Times can be found here.

So, keep your eyes open for the updates coming from SES Jakarta - it’s going to be interesting and until we reach the Kingdom of Far, Far Away, as usual stay tuned!

Subscribe to ClickZ Asia to receive your weekly dose of the region's latest trends, tips, and insights straight to your inbox.

ClickZ Live New York What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!

ABOUT THE AUTHOR

Ohad  Hecht

Ohad Hecht is the chief operations officer at Emarsys and in his role he builds operations, placing and training people, assisting with customer acquisition and client management and supporting marketing across the business. With an outstanding track record of successfully starting, growing and managing a number of businesses, Ohad is an accomplished leader. He has cross-industry experience in marketing, sales, operations and manufacturing, supported by a deep understanding of digital marketing and e-commerce. 

Click here to contact Ohad. Ohad is responsible for managing some of company’s highest profile international clients. Prior to joining the Emarsys, he was leading Marketing at Superfund Asset Management in Asia, and leading the global operations of luxury company, Dalumi. 

With international experience acquired by living and working in Asia, Europe and the Middle-East, Ohad, holds a BA in Management and Marketing, and an M.B.A. He speaks four languages including English, German, Hebrew and Chinese. Ohad frequently speaks and visit digital marketing events, writes and publish columns in ClickZ ,Mashable and in other publications, he won the loyalty award in Marketing Magazine’s “agency of the year awards” 2014.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Social newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

    Information currently unavailable

Jobs

    • Lead Generation Specialist
      Lead Generation Specialist (The Oxford Club) - BaltimoreThe Oxford Club is seeking a talented writer/marketer to join our growing email lead-generation...
    • Health Marketing Editor
      Health Marketing Editor (Agora Inc.) - BaltimoreCome flex your intellectual muscle as part of Agora, Inc’s (http://agora-inc.com/) legal team...
    • Technical Business Analyst
      Technical Business Analyst (OmniVista Health) - BaltimoreOmniVista Health is looking to add a Technical Business Analyst to our expanding team...