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Sellers are aware of this preference and engage with their customers on social network websites instead of online marketplaces.Īlso, take a look at the user retention benchmarks for e-commerce apps in 2019 and see how your app fares. Though marketplace websites are gaining prominence, consumers prefer to have direct communication with sellers on a peer-to-peer network such as Facebook as it is more personal and warm. Trust: If there is one thing that acts as a major barrier to eCommerce growth, it is trust. A low financial literacy rate is also a leading cause for the slow adoption of a cashless economy. However, there are just 36% of citizens who have a legitimate bank account. Payment methods: As per a study, 80.7% of netizens prefer to pay through bank-transfer when they shop online. Slow internet connectivity: Despite high internet penetration, internet connectivity is slow in Indonesia when compared to other Asian countries such as Singapore, Vietnam, Malaysia, and the Philippines. This acts as a bottleneck for the supply chain of the business resulting in increased wait time and also impacts the final shipping cost of products.
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Consumers in Indonesia live across 17,000 islands that span over 50,000 kilometers from east to west. Logistics: Jack Ma observes Indonesia’s eCommerce industry closely and cites the lack of suitable infrastructure as a primary challenge for the growth of the sector. There are many reasons why eCommerce brands in Indonesia cannot expand their reach to the fullest. Challenges of Indonesia’s eCommerce Industry Indonesia is still a growing economy and has many hurdles to surpass in the coming years. However, no growth story is complete without challenges. The improved economy combined with internet penetration and mobile revolution has contributed to the growth story of Indonesia’s eCommerce industry. However, despite the low usage, over 55% of online shoppers in Indonesia rely on mobile phones for shopping. The number will further grow up to 49.9% by 2022.ĭevice usage: Smartphone usage is low-less than 26% of the population uses them. Internet penetration is high in Indonesia-42.1% of the population has access to it. Internet penetration: Internet access is believed to be a significant contributor to the flourishing eCommerce industry in Indonesia. Statista predicts the number of users to grow to 43.89 million by 2022 and the average online spends to go up to 375 million USD.
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Over 31.65 million users are shopping online. What Makes Indonesia a Hotbed for the eCommerce Industry?Įconomy: With over 261.12 million population and a GDP per capita expected to reach 5,790 USD by 2022, Indonesia’s middle-class population is expanding. Significant investments by eCommerce giants like Alibaba($1.1 billion in Tokopedia), Amazon($600 million in its Indonesian operations).The country added 11 million new online shoppers in 2017, while another survey of 1000 urban consumers showed a 63% increase in shoppers buying products online at least once a month.The Gross Merchandise Volume(GMV) for online transactions is predicted to reach $130 billion by 2020.The eCommerce market in Indonesia is poised to grow at a CAGR of 9.3% and will be valued at $16,338 million by 2023.
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These statistics will give you a broad picture of this country’s growth story:
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