E-commerce in Indonesia is experiencing substantial growth, from sale and purchase transactions via Facebook to the growing presence of Indonesian versions of international online shops.
A wide variety of payment methods also serves to reassure consumers, ranging from bank account transfers to credit cards, mobile credit, and the traditional cash on delivery. The potential in the country of 240 million has encouraged international online merchants to set up shop, among them Zalora, one of the many brands of the German company Rocket Internet.
The boom in e-commerce in Indonesia is being fuelled by rapid growth in internet penetration — up 32% last year alone, according to research by MarkPlus Insight. Currently, there are about 55 million internet users, both mobile and fixed-line.
According to research by Frost & Sullivan, the total transaction value of e-commerce in Indonesia in 2011 was estimated at US$1 billion.
The biggest challenge for e-commerce in Indonesia, as in many developing countries, is to gain the trust of consumers. Unfamiliarity with English is also a barrier, although
almost all leading sites, such as Tokobagus.com and Bukalapak.com, offer Indonesian language services. Even international sites have Indonesian versions, such as Groupon (with Disdus.com) and eBay, through Plaza.com
Ichwan Sitorus, manager of public relations with Tokobagus.com, said education is needed to increase the number of visitors and turn them into buyers.
“The goal is to increase page view traffic, which will have an impact on ads,” he said. “It is important that we create more revenues which usually come from advertisements placed by third parties.” Most online shops do not charge fees to sellers or buyers, so they rely heavily on ad revenue.
“The tip is an intensive educational activity such as offline activity without forgetting the online activity,” he said.
Online shopping has become a regular habit for the most Indonesian people, especially in big cities such as Greater Jakarta, Bandung, Yogyakarta, Bali, to Makassar.
The two main online shops, with hundreds of millions of page views per month, are Tokobagus.com and the online shopping forum Kaskus. Local sites also average thousands of page views per month.
“Online shopping is common. What is new in Indonesia is the online transaction in which payment is made through a payment gateway,” said Edward K. Suwignyo, assistant vice-president for marketing communications with Multiply, one of the world’s largest online malls.
Multiply is so bullish on Asia that it even moved its headquarters to Indonesia from the United States.
E-commerce sites are not just serving as providers but also are involved in regulating the system, including ensuring the security of transactions, as operators are aware that trust is the key to their success.
One of the local sites that accommodates online transactions is Multiply Indonesia. A buyer can pay using mobile banking such as Klik BCA, a system provided by PT Bank Central Asia Tbk, one of the largest banks in Indonesia. There is also a direct payment using ATMs of large banks such as BCA and Bank Mandiri.
Also significant is that fact that the future of e-commerce in many developing countries doesn’t involve computers. Infonetics Research noted that mobile broadband users worldwide grew nearly 50% to 846 million last year, which will have a huge impact on the way people buy, sell and pay.
In Indonesia alone there are an estimated 100 million internet users who connect via mobile devices including phones and tablets. The rapid growth of mobile channels has put the country ahead of schedule for internet connectivity. Policymakers earlier had set 2015 as the deadline for having half the population, or 120 million people, online.
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