5-minute guide! EC situation in Indonesia

EC Column

Basic information

Hello, my name is Tara. My name is Tara, and I am a consultant.
Indonesia is the world's largest island nation, rich in nature. In Japan, it has a strong image as a resort destination, such as Bali. With a population of over 270 million (as of 2023), it is the fourth most populous country in the world. Major islands include Java, where about 60% of the total population lives, Sumatra, Kalimantan (part of Borneo), Sulawesi, and Papua, etc. However, due to the cultural characteristics that vary by region, accessibility, and the state of transportation infrastructure, marketing throughout Indonesia is It is known to be particularly difficult to market throughout Indonesia, due to the different cultural characteristics, accessibility, and transportation infrastructure in each region. The growth of local companies is also remarkable, so even large foreign companies are forced to withdraw from the market, and there seems to be a clear divide between the bright and dark sides of the market.

As a Dutch colony, the country was the third largest producer of coffee in the world after Brazil and Vietnam! Recently, with economic development, there has been a café boom, and there are many fashionable stores and coffee beans. They also actively hold local exchange events and live music concerts using the café space.

The major religion is Islam, which makes up about 87% of the total population. Other faiths include Protestantism, Catholicism, Hinduism, and Buddhism, depending on the region.

What ec is commonly used in indonesia?

Next, we will discuss the e-commerce situation in indonesia, starting with the most commonly used e-commerce platforms.

1.Shopee: Largest downloads in Southeast Asia

Originating from Singapore, Shopee is a e-commerceplatform that has spread rapidly throughout Southeast Asia and is now expanding its reach significantly to Taiwan, Brazil, Mexico, Chile, Colombia, Peru, and other countries. In Indonesia, the number of monthly visitors reached 181 million in the fourth quarter of 2022, making it the No. 1 download in both Google Play and Apple Store. Its mobile-specific interface and interactive shopping features, such as Shopee Live, have been growing in usage year after year.

2.Tokopedia: Indonesian service, just ahead of Shopee

Tokopedia was established in Indonesia in 2009 and has quickly become one of the largest marketplaces in the past decade, with more than 130 million monthly active users (as of 2022) and more than 10 million sellers, including many local small businesses and handmade products. The service is specialized in Indonesia, with many local small and medium-sized businesses and handmade products. Recently, the service has been expanded to include hotel and airline reservations, and the number of users is expected to increase. This is definitely a sales channel to consider when entering the Indonesian market.

3.Lazada: From Singapore, the Amazon of Southeast Asia

Lazada (Lazada) has a certain number of users in Indonesia, although not as many as Shopee and Tokopedia. Originally from Singapore and originally German-owned, the company made headlines when it was acquired by Alibaba in 2016.
Lazada has a very high market share throughout Southeast Asia and aims to serve 300 million customers by 2030. The reason is that the system is very similar with many benefits. It is also strongly linked to Social media, which is a great advantage for effective marketing, and is a channel to consider if you are targeting the entire Southeast Asia region.

In Indonesia, the top two seem to be competing with each other, so much so that even local Indonesians are talking about whether they prefer Shopee or Tokopedia, but recently Shopee seems to have the upper hand due to the number of countries where it operates and the breadth of product categories.
What they have in common is that both person-to-person transactions (CtoC) and business-to-consumer transactions (BtoC) are possible, and that they offer a full range of promotions, discount campaigns, and other offers. Another reason for its popularity is that Indonesia has a lower credit card penetration rate than other countries, and therefore offers a variety of payment options as its own service, including debit cards, electronic payments such as OVO (the most popular smartphone payment method in Indonesia)/GoPay, and bank transfers. The company also offers a variety of payment options as part of its proprietary service.

IF you are considering cross-border ec for your company, you will not stand a chance if you simply compete with these huge platforms. Use it strategically by using it as one of the channels to attract customers and by combining it with social networking services.

Entry hurdles to be kept in check

Language and culture

Bahasa Indonesia is the official language in all major Indonesian cities. Since 87% of the population is Muslim, it is necessary to consider events and promotions to coincide with national holidays and holidays related to Islam.
In Islam, there is a period of fasting around August each year called "Ramadan" and a period of "Lebaran" to celebrate the end of the fast. During this period, there are large consecutive holidays, like New Year's in Japan, where people go back to their hometowns, gather with relatives, and various company-sponsored promotions, campaigns, and events are also held.

Settlement method

While credit card penetration is low in Indonesia, smartphone payments are growing in use every year, and incorporating popular local electronic payment services such as OVO and GoPay will be a must for a smooth customer experience.

Logistics infrastructure

Because Indonesia is a geographically vast island nation, the development of logistics infrastructure is a particularly important issue. Below are some of the major logistics companies currently in use:

  • J&T Express: Specialized services for the Indonesian e-commerce industry, including pickup, delivery, and return of goods.
  • Ninja Van: Serving a wide range of companies throughout Southeast Asia, Ninja Van offers the advantages of high technology and low operational burden.
  • Sicepat Ekspres: Indonesian logistics company and combined services including courier delivery, warehousing, and cargo services
  • AnterAja: Logistics platform offering end-to-end solutions from shipping to delivery
  • aCommerce: Southeast Asia's Leading eCommerce Solutions Service Provider
  • Pos Indonesia: Also provides state-owned postal and logistics services in Indonesia
  • JNE Express: Indonesian courier service and logistics company
  • Lazada eLogistics (LeL): Southeast Asia's largest online shopping platform and Lazada's own fulfillment network
  • Shopee Express: In-house logistics service for online marketplace Shopee, offering cash-on-delivery service throughout Indonesia

Summary

Indonesia, where internet penetration is rapidly increasing in tandem with economic development and population growth, is a market that should definitely be considered when considering cross-border ec business. However, in contrast to the speed of digitalization, there are still many operational challenges, such as the fact that the personal information protection law was just enacted for the first time in 2022. In order to make a full-fledged entry into the market, it will be essential to conduct on-site surveys and research local competitors.

Nevertheless, it is easy to imagine that sns engagement is so high that it is a hot topic around the world, and that the number of users of digital channels will continue to increase. Understanding the unique culture and customs of the country and considering effective sns marketing will be essential, but there is no doubt that the country holds great promise for future growth.

Achieve results with "minimum investment and effort."
Cross-Border EC one-stop for services.

Articles in the same category

  • EC Column

    6 points to avoid mistakes in choosing a Shopify theme

  • EC Column

    Key points on how to find influencers

  • EC Column

    Advantages and disadvantages of EC malls