Indonesia’s e-commerce market continues to surge amid COVID-19 pandemic: GlobalData

Must Read

Indonesia is a promising e-commerce market in Asia-Pacific, with several local and global players competing in the market. Rising Internet penetration, increasing digitalization and the proliferation of websites have been driving e-commerce growth. The COVID-19 pandemic has further accelerated e-commerce sales in Indonesia, according to GlobalData, a leading data and analytics company.

An analysis of GlobalData’s E-Commerce Analytics reveals that e-commerce sales is estimated to grow by 37.4% to reach IDR351.1 trillion (US$25.3bn) in 2020, compared to the pre-COVID-19 estimate of 22.2% for the same year. The figure is expected to rise at a compound annual growth rate (CAGR) of 19.2% between 2020 and 2024, to reach IDR707.6 trillion (US$51.0bn) in 2024.

Kartik Challa, Banking and Payments Senior Analyst at GlobalData, comments: “Online shopping is gradually becoming mainstream in Indonesia with more consumers preferring due to the convenience it offers. This shift became even more prevalent during the COVID-19 pandemic with strict lockdown and social distancing rules being in place.”

BTo push consumer spending during pandemic, the government collaborated with the Indonesian E-Commerce Association and rolled out programs for around 2,500 SMEs, providing training on utilizing e-commerce platforms for increasing sales.

While traditional payment methods such as bank transfers and cash are still widely used for e-commerce purchases, the use of alternative payments is on the rise.

As per GlobalData’s 2020 Banking and Payments Survey* for online purchases, ‘bank transfers’ is the most popular payment tool with 30.7% share in 2020. The COVID-19 outbreak is driving customers towards alternative payment tools such as OVO, GoPay, PayPal, Dana, DOKU, and LinkAja. As a result, cash share is expected to decline from 98.0% in 2020 to 96.9% in 2024.

Challa concludes: “As Indonesia continues its digital transformation, the use of electronic payments, including cards and alternative payment solutions for e-commerce purchases, will rise as consumers are moving away from cash due to fear of getting infected.”


Latest News

The Demand for Experiential Retail to Grow in 2023

In 2023, retail in India is expected to grow better than all other key markets globally with Omnichannel becoming...

More Articles Like This