According to market research company Mordor Intelligence, Indonesia's e-commerce landscape is poised for significant growth, projected to increase from an estimated US$58.43 billion in 2024 to US$95.84 billion by 2029.
The increase reflects a shift toward more technology-driven and user-centric shopping experiences nationwide. For a deeper understanding of these changes, we’ve outlined the rising e-commerce trends in Indonesia that are shaping its rapidly evolving digital marketplace.
Rising e-commerce trends in Indonesia
Read about the latest trends driving the growth of e-commerce in Indonesia:
1. Mobile commerce dominance
An impressive level of smartphone penetration drives the dominance of mobile commerce in Indonesia. With over 190 million smartphone users in 2023, Indonesia ranks as the fourth-largest global market in smartphone usage, according to insights from Statista. Interestingly, results from YouGov’s Survey indicate that 96% of consumers in Indonesia use their mobile device to shop online.
In response, businesses are strategically adapting to this mobile-first consumer behaviour by optimising their platforms for mobile users. This shift not only meets customers where they are but also enhances accessibility, making shopping seamless and more engaging.
Moreover, the benefits of mobile commerce extend beyond convenience; they include increased reach and personalised online shopping experiences. By leveraging mobile commerce, companies are tapping into a robust avenue for reaching a broader audience, significantly influencing the rise of e-commerce in Indonesia.
2. Social commerce
According to DataReportal, Indonesia boasts approximately 139 million social media users as of January 2024, presenting a vast opportunity for e-commerce businesses to enhance brand awareness and engage with customers effectively.
However, Indonesia's recent ban on e-commerce transactions on major platforms like TikTok, Facebook, and Instagram has impacted this dynamic. This regulatory move is seen as a way for the government to protect offline merchants, small enterprises, and regulate the digital marketplace more closely.
Despite these restrictions, social commerce remains a potent force in the digital economy. Businesses continue to leverage these platforms to showcase their products and engage with potential customers.
By using social media for advertising and directing traffic to their official e-commerce websites, companies can still harness the extensive reach of social media to grow their customer base and drive sales.
3. Cross-border e-commerce expansion
E-commerce in Indonesia is not just flourishing locally; it's making significant strides globally. Cross-border shopping is becoming a compelling option for consumers seeking diversity in their purchases and businesses aiming to broaden their market reach.
Platforms such as Amazon, AliExpress, and eBay are increasingly popular among Indonesian online shoppers drawn to the vast array of products these sites offer. This trend has led to a surge in imports, especially from China, which accounted for approximately 43% of Indonesia’s cross-border e-commerce activity in 2022, according to Statista.
For Indonesian e-commerce businesses, the global stage offers a unique opportunity to promote local products and cultural treasures to an international audience. Additionally, advances in digital technology have made it easier than ever for these businesses to connect with consumers worldwide, allowing them to compete globally.
This expansion not only enhances their visibility but also diversifies their customer base, driving e-commerce growth in Indonesia.
4. Focus on sustainability
Environmental consciousness is increasingly shaping Indonesian shopping preferences. Data from YouGov shows that 74% of online consumers in Indonesia prefer sustainable retail brands, with 77% willing to pay more for eco-friendly products. This rising environmental awareness is pushing e-commerce businesses to adopt sustainable practices across their operations.
E-commerce platforms are aligning with consumer values through innovative eco-friendly initiatives, such as adopting sustainable packaging solutions and collaborating with green logistics providers to streamline eco-conscious shipping processes to customers. These efforts not only cater to the demand for sustainable shopping but also boost the reputation of brands as sustainable retail leaders.
Such strategic integration of sustainability attracts a broader eco-conscious customer base, further driving the rise of e-commerce in Indonesia.
5. Technological innovations shaping e-commerce
E-commerce is being redefined by cutting-edge technologies that make online shopping in Indonesia easier and a truly customised experience.
Artificial Intelligence (AI) is at the forefront, offering personalised shopping journeys with AI-driven recommendations. This AI personalisation caters uniquely to each customer's preferences and shopping history, broadening their shopping horizons while ensuring a high-relevance match.
Augmented Reality (AR) complements this by bringing products to life right before the eyes of consumers. Whether it’s trying on a pair of glasses or visualising how a new sofa might look in a living room, AR adds a layer of interaction and engagement that was once exclusive to physical stores.
Furthermore, the always-on nature of e-commerce means that consumers can browse and buy anytime, from anywhere. This round-the-clock accessibility fits perfectly into modern consumers’ busy schedules. Additionally, it opens doors to worldwide online shopping, offering endless choices from international online shops that were previously beyond reach.
By leveraging these technological innovations, Indonesian e-commerce platforms are achieving a new level of e-commerce excellence, setting a global benchmark in convenience and customer satisfaction.
6. Adapting to consumer behaviour changes
The retail environment in Indonesia has undergone profound changes driven by shifting consumer behaviours. A particularly notable change is the demand for omni-channel shopping.
This approach integrates traditional in-store experiences with online platforms like e-commerce websites and mobile apps, allowing consumers to transition between different channels seamlessly. Such flexibility caters to the increasing tech-savviness and preferences of consumers who expect diverse shopping experiences.
Interestingly, a survey by Rakuten Insight in November 2023 reports that 66% of Indonesian shoppers find a product in-store and then purchase it online, highlighting the growing preference for this integrated shopping model.
Furthermore, another significant shift in consumer behaviour is the demand for rapid delivery services. In this fast-paced market, quick shipping options have become a critical expectation among consumers.
According to a report by Entrepreneur Magazine, 80% of consumers state they are less likely to buy from online shops that do not offer fast shipping options.
To keep pace with these online shopping trends, e-commerce businesses need to adapt by partnering with international logistics service providers in Indonesia that offer express and flexible shipping options. By doing so, they can cater to the diverse demands of consumers across the country and globally.
