What is the eCommerce market size of Indonesia?
The eCommerce market size in Indonesia has grown rapidly, thanks to high smartphone penetration rates. Unlike online users in Europe or the United States, most Indonesians have skipped the digital evolution from personal computers to laptops and tablets, and have instead leapfrogged to smartphones like the Chinese.
The Indonesian retail market is worth an estimated $282 billion, of which B2C eCommerce businesses selling physical goods, accounts for about 4% or $12.2 billion.
Indonesia is the fastest growing eCommerce market in the APAC region only next to China and the largest eCommerce market in the ASEAN region.
In this blog post, we haev estimated the Total Addressable Market (TAM) of B2C eCommerce companies selling physical goods in Indonesia and then profile the TAM distribution by Product Categories, Web Sales and Shopping Carts.
How is Indonesia’s eCommerce market distributed by product category?
Based on a combination of secondary research, and validation, and analysis of proprietary data, we estimate that across brands, retailers, and marketplaces, there are about 15,000-20,000 eCommerce companies in Indonesia. More than 80% of these merchants also reportedly sell through social platforms – mostly Instagram and Facebook.
The most popular category in Indonesia is Fashion (36%), followed by Toys-Hobbies-DIY (21%), and Electronics (18%).
Retail in Indonesia is dominated by small independent store owners (collectively totaling 4.1 million stores) but modern retail— convenience-store chains, supermarkets, and hypermarkets—is reportedly growing twice as fast as traditional trade. eCommerce still accounts for less than 5% of the country’s total retail sales and is growing at an estimated CAGR of 20.6%.
Online sales distribution in Indonesia
We proﬁled a sample of Indonesia’s universe of eCommerce companies to analyze its distribution by Online sales.
The distribution pattern reﬂects the long-tail nature of Indonesian eCommerce where the majority of the companies make less than a million dollars in online sales.
Shopping cart distribution in Indonesia
xWe proﬁled a sample of Indonesia’s universe of eCommerce companies to analyze its distribution by Shopping carts.
WooCommerce emerges as the popular choice, followed by Magento, Shopify & PrestaShop.
Top eCommerce companies in Indonesia
Tokopedia, Bukalapak, Shopee, and Lazada are the top 4 sites from a trafﬁc point of view. Below is a list of leading eCommerce companies – both local and international – in Indonesia together with their online trafﬁc and Facebook/ Instagram follower data.
Local eCommerce companies
International eCommerce companies
Lazada, Shopee, Tokopedia, and Bukalapak control most of the formal eCommerce sales with the top three each controlling between 20% and 30% of the market and Bukalapak in the low teens according to the Morgan Stanley’s estimation. Despite high trafﬁc inﬂow to local eCommerce sites, Shopee stands out as the most popular eCommerce site in terms of conversion.
Indonesia is the largest eCommerce market in SEA in terms of GMV. A few major local and international ecommerce marketplaces and tens of thousands of small-scale players dot the landscape. Social media usage in the country is also among the highest in the world. Fashion is the dominant product category, and Woocommerce is the most popularly used shopping cart platform. Investment in Indonesian internet companies has steadily risen over the past two years (2017 and 2018) with 2018 clocking an investment of over $7 billion across 700 deals. Not counting the unicorns, 2018 saw Indonesian startups receive a total investment of $274 million. eCommerce and Fintech received the most funding, while AI-based services bolstered those platforms and others by creating chatbots for them.
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