23 Dec 2019
Posted in Banking
Indonesia’s e-commerce market set to surpass US$30bn in 2023, says GlobalData
Growing Internet penetration, rising foreign direct investment, benefits such as discounts and the convenience offered by online shopping are set to drive the e-commerce market in Indonesia at a compound annual growth rate (CAGR) of 16.3% from an estimated IDR238.3 trillion (US$16.6bn) in 2019 to IDR436.2 trillion (US$30.3bn) in 2023, according to GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Indonesia Cards & Payments: Opportunities and Risks to 2023’ reveals that between 2015 and 2019 the e-commerce market in Indonesia grew at a CAGR of 37.6%.
Ravi Sharma, Senior Analyst at GlobalData, comments: “Online shopping events such as Harbolnas, Singles’ Day and Tokopedia Anniversary offering lucrative discounts, coupled with the proliferation of alternative payment solutions and improved logistic infrastructure supported e-commerce sales during the last four years.”
According to GlobalData’s 2019 Banking and Payments Survey, payment cards continue to dominate e-commerce purchases in Indonesia, accounting for 36.6% in 2019. Alternative payment solutions accounted for 19.4% of the total e-commerce transaction value in 2019, up from 15.5% in 2018. PayPal is the most popular alternative payment tool, with consumers favoring it due to a combination of its comfort and security.
Additionally, low-cost payment solutions based on QR code technology are increasingly being used in e-commerce, allowing consumers to make payments by scanning QR codes displayed on merchants’ websites. For example, GoPay digital wallet users select GoPay at checkout, scan the QR code displayed on the website using the mobile app, and confirm the transaction with their PIN.
Sharma concludes: “While payment cards continue to dominate the e-commerce purchases, alternative payments solutions will be increasingly preferred, especially by millennials, due to their inclination for faster and more convenient payment options.”