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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In June 2016 the "1,000 digital startup movement" was launched by Indonesia's Communication and Information Ministry in cooperation with KIBAR, the nation's technology startup ecosystem builder. This government-backed program targets to see 1,000 startups in the digital economy by the year 2020 with a combined valuation of USD $10 billion. Considering that digitalization has been a key trend around the globe (covering basically all aspects of life), Indonesian authorities want this sector to boom in Indonesia as well, which would also make the whole economy more efficient.

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In line with Indonesia's promising e-commerce market - supported by rising Internet penetration, rising smartphone penetration and per capita GDP growth in Southeast Asia's largest economy - online shopping site MatahariMall.com has grown strongly since its launch a year ago. The online retailer, which celebrated its 1-year anniversary on Friday (09/09), sees its turnover grow by an average of 10 percent each month and already entered the top five of biggest e-commerce players in Indonesia (in the business-to-consumer category). However, exact (turnover) figures were not mentioned.

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Google Inc. and Temasek Holdings Pte released joint research that signals Southeast Asia's digital economy (which includes e-commerce, online games, advertising and other economic activities related to the Internet) will surge to USD $200 billion by 2025. Indonesia's digital market will account for 40.5 percent - or USD $81 billion - of this total market. With an estimated USD $46 billion, Indonesia's e-commerce sector will contribute most to the total.

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Indonesia plans to introduce a special tax regulation for those small and medium-sized enterprises that generate revenue and profit through online retail sales (e-commerce business). Daniel Tumiwa, Chairman of the Indonesian E-commerce Association (idEA), informed reporters about the government's plan. He added that only a small tax tariff will be charged on small and medium-sized e-commerce companies. The new regulation is expected to be implemented later this year.

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Soon foreign investors will be allowed to control a full 100 percent stake in electronic commerce (e-commerce) businesses in Indonesia. Currently, the Indonesia Investment Coordinating Board (BKPM) is completing a new regulation that streamlines the latest regulatory changes in this industry (this regulation is expected to be completed in June 2016). Earlier this year, Indonesian President Joko Widodo signed a decree that opens (more wider) foreign ownership in various industries, including Indonesia's e-commerce industry.

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RTB House, a Poland-based technology firm that develops solutions for personalized display advertising in more than 30 markets across the globe, expects online advertisement spending in Indonesia to reach USD $4.92 billion by 2019 (up 250 percent from estimated online advertisement expenditure in 2016). This rise comes on the back of Indonesia's rising Internet and smartphone penetration. Recently, Indonesia surpassed the magic number of 100 million in terms of Indonesian Internet users.

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The Association of Internet Service Providers in Indonesia (APJII) announced that Internet penetration in Indonesia has now reached 40 percent of the population, or 100 million Internet users. Jamalul Izza, Chairman of the APJII, said this milestone is the result of the joint efforts the government, Internet services providers and other stakeholders to make Internet access available across the archipelago and create a conducive regulatory environment. However, it also implies that 60 percent of the population - some 150 million people - still live without Internet.

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The move of the Indonesian government to relax foreign ownership rules regarding e-commerce businesses in Indonesia has also given rise to expectation that the country's major e-commerce players (including foreign ones) will be interested to list their companies on the Indonesia Stock Exchange through an initial public offering (IPO). Generally an IPO improves a company's transparency and corporate/financial management. E-commerce businesses are particularly in need of consumers' trust and confidence and therefore an IPO is considered a good corporate move.

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The e-commerce industry of Indonesia is expected to grow sharply in 2016 on the back of the continued expansion of Internet and smartphone penetration. The Indonesian E-Commerce Association (idEA) estimates that the number of Indonesian online shoppers will hit 10 million in 2016. As such, earnings in Indonesia's e-commerce industry is estimated to more than double to IDR 20 million (approx. USD $1.5 billion) next year from an estimated IDR 9 trillion in 2015.

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Indonesia's eCommerce boom leads to rising demand for new logistics goods delivery concepts. This has been a problem for many brand owners and retailers that lack the technology and expertise in a distribution network. At e2eCommerce Indonesia 2018, around 2,000 attendees from eCommerce, retailers and SMEs will gather to seek answers to these problems. Are you a reliable logistics & fulfillment company? Do you have solutions for eCommerce business? Join us and exhibit your services!

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Chinese e-commerce giant Alibaba founder Jack Ma having been appointed as special advisor to the Indonesian government for the development of Indonesia's e-commerce sector has led to some concern whether it puts China's richest man in a position of conflict of interest. Ma's Alibaba Group owns big stakes in Singapore-based e-commerce giant Lazada (which operates across Southeast Asia) and Indonesian online shopping facilitator Tokopedia.

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The USD $1 billion acquisition of Southeast Asia-based e-commerce platform Lazada Group SA by China's e-commerce giant Alibaba Group Holding Ltd may give rise to a larger flow of Chinese products into Indonesia. Lazada is an e-commerce platform that operates in Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Southeast Asia is an interesting market for Alibaba as only 3 percent of retail sales are conducted online in this region, implying huge growth opportunities. Meanwhile, Alibaba has been eager to expand abroad as growth in China has been slowing.

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