Traditional retail companies in Indonesia need to change their business-as-usual mindset to overcome fierce competition from online shops or e-commerce. In line with rising Internet and smartphone penetration as well as improving infrastructure, more and more goods and services can now be purchased online - often at more competitive rates -, implying the role of Indonesia's "old fashioned" traditional retail companies is on the decline.

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American multinational technology company Google and American global management consulting firm AT Kearney completed a joint study and released a report, titled "Indonesia Venture Capital Outlook 2017", that shows Indonesia's startup market is thriving - albeit coming from a low base. Financial technology is regarded the top category for future investment.

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The number of mergers and acquisitions in Indonesia rose 5.4 percent year-on-year (y/y) to 136 deals up to August 2017, mostly involving technology companies. In terms of value, on the other hand, M&As in the first eight months of the year actually fell 9.9 percent (y/y) to USD $6.8 billion. However, not all M&A deals in Indonesia have revealed the value of the deal.

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One of Indonesia's leading cellular services providers, XL Axiata, may sell part of its stake in online marketplace Elevenia to collect new funds for expansion of this e-commerce platform. However, there is also another option. XL Axiata could also decide to use funds from its internal cash reserves. Dian Siswarini, President Director of XL Axiata, said a decision will be taken within the next two months.

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Indonesia's e-commerce industry has grown rapidly (in two-digits, annually) over the past five years. This growth is expected to continue in 2017 as well as in the years ahead. Aulia Marinto, Chairman of the E-Commerce Association (idEA), expects the value of e-commerce transactions in Indonesia to surge between 30-50 percent year-on-year (y/y) to USD $45 billion in 2017 from an estimated USD $30 billion in 2016. Indonesia is still in the early stages of the digital economy revolution and therefore there is ample room for robust growth, particularly due to rising Internet and smartphone penetration.

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Indonesia's Communications and Information Minister Rudiantara says all Indonesians across the whole archipelago will be able to enjoy Internet access by 2019. Through the Palapa Ring project, one of Indonesia's priority infrastructure projects, all cities and districts in Indonesia will have fast broadband Internet through an undersea fiber-optic cable network that stretches across 13,000 kilometers as well as an onshore network of nearly 22,000 kilometers.

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The government of Indonesia will soon release the 15th economic policy package in an effort to maintain the "structural reform momentum" and encourage investment into Indonesia as well as macroeconomic growth. Based on the words of Indonesian Chief Economics Minister Darmin Nasution, the 15th policy package will touch on subjects related to deregulation, (improvement of the) investment climate, infrastructure, medical equipment, as well as the textile and agri industries.

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Indonesia Investments often reports about Indonesia's blossoming e-commerce industry (a lucrative sector for investors). Online retail is growing rapidly in Southeast Asia's largest economy because both Internet and smartphone penetration are rising sharply in Indonesia, while expanding per capita GDP boosts people's purchasing power. But what do Indonesia's consumers actually buy online? A new survey from Google Indonesia gives some more information.

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Bank Indonesia curbed foreign ownership in local companies that offer electronic payment services to a 20 percent stake through the implementation of Bank Indonesia Regulation No. 18/40/PBI/2016 on the Operation of Payment Transaction Processing. Central Bank Governor Agus Martowardojo said this new regulation will strengthen the development of technology-based financial services firms in Indonesia by enhancing the sector's regulatory framework amid growing interest in financial technology.

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According to the Indonesian Internet Service Provider Association (or APJII) there are currently 132.7 million Internet users in Indonesia, or approximately 51.8 percent of the total Indonesian population. These figures, which are the result of a survey, are much higher compared to 2014 when APJII data show that there were 88 million Internet users in Indonesia. Meanwhile, APJII Chairman Jamalul Izza informed that about 70 percent of Indonesian Internet users use a mobile device to access the Internet.

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As we all know, the Internet is among the greatest revolutions in human history. Its impact on every aspect of life is huge, transforming how we communicate, how we access information, how we conduct business, and how we engage with the world outside. Not only does the Internet introduce profound changes, but these changes (can) also come in a very rapid manner.

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The COVID-19 outbreak has continued to impact digital media consumption worldwide. Internet platforms, such as e-commerce, now play a pivotal role in our daily lives. On the bright side of current situations, e-commerce is growing all over the world, including in Indonesia. This is because behavioral shifts amongst Indonesians to choose online platforms as their safest place to conduct their daily activities, such as shopping, working or just meeting with some friends.

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It is something the central government of Indonesia has been planning and weighing for several years now, but the coronavirus (COVID-19) crisis seems to have sped up the efforts. Per 1 July 2020, the Indonesian government imposes a 10 percent value-added tax (VAT) on sales of imported digital products and services.

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E-commerce – which refers to the activity of electronically buying (or selling) products through online services or over the Internet – has been developing rapidly in Indonesia over the past decade. More and more Indonesians have started to shop online, forcing many offline retail players to adapt and innovate their business models in order to survive in this new and challenging environment where two newcomers, both tech startups and both e-commerce platforms, have developed into a unicorn (Tokopedia and Bukalapak) which is a startup that is valued above USD $1 billion.

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Are you looking for the latest products and services to improve your e-Commerce business? Or do you plan to promote brand awareness for your latest technology and solution in the field? Join us at the 4th e2eCommerce Indonesia Conference & Exhibition on 25-26 September at Balai Kartini, Jakarta, this year.

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Indonesia, the world’s 16th-biggest economy, recently joined the “trillion-US dollar club” having a nominal gross domestic product (GDP) of USD $1.01 trillion. Meanwhile, the country’s annual economic growth has been going at a pace of around 5.0 percent over the past couple of years.

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It came as a big surprise to us. Only three days before the new and somewhat controversial e-commerce tax regulation would come into effect, Indonesia’s Finance Ministry decided to delay its execution.

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While reforms related to Indonesia’s corporate income tax rates remain in the planning stage, there is a new important regulation that will come into effect per 1 April 2019. Through Finance Ministry Regulation No. 210/PMK.010/2018 on the Taxation of Trade Transactions through Electronic System or E-commerce, which was signed on 31 December 2018, Indonesia will require e-commerce merchants (sellers) to share data with tax authorities and pay VAT and income taxes.

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Indonesia has four unicorns – a term that refers to startup companies that are valued over USD $1 billion – namely: (1) ride-hailing and logistics company Go-Jek, (2) e-commerce operator Tokopedia, (3) e-commerce operator Bukalapak, and (4) airline ticketing and hotel booking services Traveloka.

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Health awareness in Indonesia is at a very low level, especially in the cities, as Indonesians tend to eat too much unhealthy food and exercise too little. Therefore, health awareness is something that needs to be encouraged in Indonesia. However, government programs - such as the "Healthy Four, Perfect Five" principles - seem to have limited effect and therefore there is plenty of room for the private sector to encourage consumers to lead a healthier lifestyle. In fact, encouraging a healthier lifestyle can become part of a business model.

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