Potential of E-commerce Services to Support Economic Recovery in Indonesia

In Indonesia, it is recorded that the internet economy grew from $40 billion in 2019 to $44 billion in 2020. Of this value, around 73% or $32 billion came from the private sector. E-commerce. The pandemic has changed the habits and lifestyles of most people in terms of options for buying daily necessities to digital payments.

What is the potential and landscape of the e-commerce sector in Indonesia in the future? Intrepid Indonesia Co-Founder & CEO Sean Lawlor shared some interesting information that can be observed.

Service growth E-commerce during a pandemic

As a platform that supports success brand launch social media marketing activities and marketplaces, Intrepid noted that during the pandemic the number of Indonesians who used the service E-commerce to make purchases is increasing up to 110%. Consumers also spend more time exploring various services E-commerce, especially at the beginning of the 2020 pandemic.

If before the pandemic they only spent about 3 hours, during the pandemic they could spend more than 4 hours online. And recorded at this time when the rules have started to loose and routine offline back running, their time to surf the internet has not decreased in number.

"Increasing use of online Among the Indonesian people, during the pandemic, it was possible for the economy to grow, even though the travel sector experienced a massive decline," said Sean.

Products such as daily necessities, health products, home products and lifestyles, to hobbies, become the choice of most Indonesian people during the pandemic. During the pandemic, most of them spend time at home and choose to shop online online.

For payment options such as mobile banking also more and more used. This is certainly an opportunity for banks to launch digital services that make it easier for customers to make transactions and other needs online.

Service launched by BCA Digital Blue to the BRI bank through BRImo, being the best and right solution for now. On the other hand, SMS banking is also gaining momentum during the ongoing pandemic.

Potency quick commerce and social commerce

An interesting thing that Intrepid has also observed over the last two years is the increasing number of growth quick commerce, social commerce, and shopping activities take advantage of live streaming. One of the reasons why these three categories are getting more attention is because consumers want to find more interesting experiences when shopping, as well as speed and efficiency when shipping goods.

"Currently, we are also seeing more and more consumers relying on purchasing through services E-commerce, especially for food delivery and groceries, which has led to the growth of online groceries competition. Services offered by Astro and Fresh as well as large e-commerce services that focus on groceries, such as TokopediaNow and Shopee Segar, which are now increasingly being chosen by consumers," said Sean.

In addition to daily needs, consumer spending habits in Indonesia have also begun to shift to certain products. Starting from health products and anti-covid products such as vitamins, masks, and sanitisers. Other categories that Intrepid also observes are groceries, children's toys, products for hobbies such as bicycles, home supplies and work support products, water purifier, televisions and speakers also fall into the category that is widely chosen today.

Specifically for social commerce although currently it is still in demand for only a few products, but when viewed from the number of social media users in 2021 in Indonesia, it has reached around 62%. This number is an increase of about 23% compared to before the pandemic. Proving that more and more of them are using social media not only for socialization, but also the potential to make purchases. The platforms that are widely chosen today are TikTok Shop and Instagram Shop.

"Nowadays when young people like Gen Z have started to enter the workforce and earn an income, of course the option to shop using social media is their main choice," said Sean.

He added, social commerce Of course, the market will continue to grow but it will take a lot of time for it to continue to grow in the next few years. One of the reasons is that currently it is still in the first phase of more penetration into the C2C (consumer to consumer) market. As a result, fewer brands are involved. This pattern is predicted to be similar to live streaming shopping in e-commerce services, when more sales are obtained from C2C.