Business Opportunities in Indonesia: Online Shopping Gains Popularity
Indonesia's e-commerce industry (online shopping) is expected to continue its rapid growth in the years ahead as more and more Indonesians have access to Internet amid the country's rising per capita GDP (resulting in a rapidly expanding middle class). Indonesians' purchasing power has expanded quickly and in combination with the popularity of the smartphone, people are increasingly purchasing consumer goods online. This was one of the conclusions drawn in an online business insight discussion organized by Google and Blibli.com in Jakarta.
Rudy Ramawy, Google's Country Director for Indonesia, who was present in the online business insight discussion on Monday (01/04), said that online shopping in Indonesia is becoming more and more popular due to increased access to Internet, higher purchasing power and the introduction of the smartphone. His view is partly based on a Google survey that was held in twelve big Indonesian cities and involved 1,300 respondents.
There are four categories of Indonesian online shoppers according to Google:
• recent shopper; made an online purchase within the last 30 days
• non-recent shopper; made an online purchase in the last six months
• non-online shopper; is online but does not purchase items online
• online seller; has sold a product online
Developments within these groups provide important information about how the Internet changes Indonesian consumers' behavior and the business community should anticipate these developments in order to make their business more profitable. For example, many people categorized as non-online shoppers (who have never purchased a product online although have access to Internet) responded that they intend to make an online purchase within the next twelve months. Unfortunately no detailed figures were given with regard to these four categories.
CEO of Blibli.com Kusumo Martanto confirmed that Indonesians are increasingly confident in online shopping. For example, online sales of clothes are rising rapidly. Previously, consumers preferred to hold clothing items in their hands first before deciding to purchase the item. However, sales of t-shirts through Blibli.com have increased sharply recently and are now more or less equal to sales of gadgets and electronics which used to be the most popular items for online sales. Ramawy stated that 40 percent of the 1,300 respondents in the Google survey indicated that they want to purchase clothes online.
Based on information from Blibli.com, Indonesia's e-commerce industry grows by 30 to 50 percent per year. Blibli.com claims to experience these growth rates in several categories, such as its online traffic, revenue, members and transactions.
There should be much more room for growth of online shopping in the future as many Indonesians outside the bigger cities (particularly outside the island of Java) still lack Internet access. However, there is the problem of logistics. Outside the bigger cities of Java, there is a lack of warehouses that contain stockpiles of products that can be purchased online. Therefore, growth in Indonesia's online shopping industry will continue to stem from the urban communities on Java in the years ahead.