E Commerce Indonesia as the fifth largest e-commerce market in Asia

E Commerce Indonesia to potentially become the world’s third largest e commerce market

The Indonesia market is currently ranked as the fifth largest e-commerce market in Asia. Indonesia follows other Asian countries, namely China, Japan, South Korea and India.

However, according to Azhar Hasyim, director of E-Business at the Communications and Information Ministry, the e commerce Indonesia industry has the potential to become the third largest market in the global e commerce market. With more consumers located in Indonesia compared to other countries, Indonesia has the ability to rise above India and South Korea and become the third largest e commerce market in the world.

This statement was further supported by Alex Chandra, the head of education, human resources, and customer protection at the Indonesia E-Commerce Association (idEA). According to Alex, the e commerce Indonesia industry is currently gaining growth momentum despite Indonesia not yet adopting the 4G+ technology, implying its potential in possessing a larger e-commerce industry compared to South Korea.

Growth of E Commerce Indonesia and its implications towards other sectors

With growth in e commerce Indonesia, a sector that has greatly benefited from this is the logistics industry. It is believed that growth in the e-commerce industry has resulted in a sharp increase in deliveries by local courier and logistics service firms.

According to Tony Winarno, chairman of the Central Java branch of Express Couriers Association (Asperindo), with the contributions made by the e-commerce industry in the Indonesia market, the potential growth of the nation’s courier and logistics business is at 30 percent. This is higher from the original projection where Asperindo originally projected the average growth to stand at 15 to 20 percent of Rp50 trillion, 2016’s market value.

In addition to the logistics industry, the business-to-consumer (B2C) Indonesia market recorded the highest growth rate in the Asia-Pacific for 2017. As a result, Budi Hardyansyah, the chairman of Sharia financial service cooperative BMT Bahtera Pekalongan, believes that for those wishing to enter the business, the right time to do so is the present time.

Future actions for Indonesia market

Despite e commerce Indonesia currently experiencing growth, there are more that can be done in order to boost the e-commerce industry in the Indonesia market. Azhar recommends startup Indonesia and small and medium enterprises (SMEs) that have a trade value of lower than Rp50 billion to avoid from working with foreign investors. This is due to the fact that startup Indonesia companies and SMEs are only allowed to trade with foreign investors if one is trading with a minimum trade value of Rp50 billion.

Furthermore, according to Azhar, out of the various programs that can be implemented, one program in particular helps startup Indonesia companies and SMEs by providing free domains for businesses in the e commerce Indonesia industry. By doing so, this enables them to market their products online.

 

With e commerce spending in ASEAN predicted to rise by 32% to almost US$90 billion in 2025, it is imperative for member states to understand ecommerce in Asia.
Indonesia currency has recently dropped to IDR 14,700 on August 31 as a result of external factors like the Argentinian crisis and the US-China trade war.
SME in Malaysia grew from 5.2% in 2016 to 7.2% in 2017 (RM435.1 billion) for all main economic sectors including manufacturing, services, and agriculture.
© Copyright AEC Connect 2017