More Indonesians shopping online

The e-commerce market in Indonesia is small – for now.

But research shows that as the middle class triples in size over the next few years, according to one forecast, e-commerce sales will rise accordingly.

A report by eMarketer, online payment company Veritrans and Indonesian technology blog Daily Social estimated the retail e-commerce market at $900 million in 2011, with only 6.5 per cent of internet users buying online.

But that low dollar figure is expected to increase more than ten-fold by 2015, propelled by growing incomes and a young internet user base willing to engage in new online transactions.

eMarketer expects online buyer penetration to rise faster in Indonesia than any other country this year, and drop to only second worldwide in 2013.

It was found out that the average amount spent online by each buyer was relatively low in Indonesia – $256 last year. In other emerging markets like China and Brazil, spending hovered around $800.

eMarketer measures B2C e-commerce spending, which includes both retail sales and online sales of travel-related services, whereas Veritrans and DailySocial looked at retail only when sizing the market.

For B2C e-commerce, eMarketer finds that the fast expansion of the online buyer base in Indonesia will far outpace the rise in spending per online buyer. Broader uptake will likely be the primary driver of increased online retail sales as well.

Other online trends already established in Indonesia will have an impact on the e-commerce market as it develops. In Indonesia, social networking is widely popular, particularly on social network, Facebook.

Consumers’ comfort with social networking, and especially Facebook, is now expanding to e-commerce sites. Half of online buyers surveyed reported purchasing via Facebook in April, making it the top e-commerce site. That was followed immediately by Kaskus, an Indonesian online community where 49 per cent reported buying.

In terms of what these relative newcomers to the e-commerce marketplace buy online, fashion took the spot by a good margin. Nearly four out of 10 buyers made a fashion purchase.

Travel – a more expensive category – was next up, tied with music, videos and games.

And when asked how they were buying online, the overwhelming majority cited bank transfers, a somewhat antiquated – and convoluted – form of payment. Only 30 per cent reported using a credit card.



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