Indonesia to become the largest B2C E-Commerce market in Southeast Asia
The fourth most populous country worldwide, Indonesia, ranks in the top 10 global markets by number of Internet users, despite low Internet penetration. Although only a low double-digit share of Internet users in the country makes purchases online, Indonesia is reported to have the potential to become by far the largest of the B2C E-Commerce markets in Southeast Asia, due to anticipated rapid growth.
Indonesia is a “mobile first” country. Mobile phones were used by the majority of Internet users in Indonesia to access the web in 2014, and were furthermore the device most used by online shoppers to make purchases online. Smartphone penetration is growing, expected to top 100 million users and rank Indonesia among the top 5 countries worldwide by number of smartphone users, within the next three years. Additionally, clothing and other fashion-related items were the most purchased online product category last year, while the payment method most preferred by online shoppers was bank transfer.
As the E-Commerce landscape evolves in Indonesia, the competition is dominated by marketplaces. The most popular E-Commerce website in Indonesia, Lazada, combined online retailing with the marketplace model and achieved triple-digit growth across Southeast Asia last year. It also attracted additional investment, as did two other marketplaces, Tokopedia and Elevenia. Meanwhile, the two major online classifieds websites in the country, OLX and Berniaga, formed a joint venture under the OLX brand to compete together in the increasingly competitive and booming E-Commerce industry.