The COVID-19 pandemic has turned out to be a boom for E-commerce in Southeast Asia, including Indonesia with an increase in transactions by 23 %, and gross merchandise value projected at the US $32 billion. The pandemic has also prompted many micro, small and medium businesses to shift to online platforms. The number of brands using online platforms has risen to 10.2 million during the pandemic.
In Southeast Asia, Indonesia has the largest digital economy with approximately 40 % of the total regional market share. Rising smartphone and internet penetration and growing middle-class consumers, combined with a young, tech-savvy population, are among the key determinants for its E-commerce growth.
The annual growth rate of E-commerce
By 2025, the number of users is expected to be 221M in the E-commerce market in Indonesia. User penetration was approximately 57.4% in 2021 and is expected to hit 77.0% by 2025. A total of 32% of E-commerce purchases are seen in the year 2021. With the increased lockdown situations, high Domestic E-Commerce purchases were seen in the year 2021 which was almost 94% of the total purchases.
Product categories sold during 2021
In terms of purchasing category, fashion is at the top with almost US$ 13.22 billion, consumer electronics comes out to be second with the revenue of US$ 8.17 billion. Toys, Hobby & DIY generated revenue of US$ 6.78 billion while furniture and appliances and personal care resulted in projected values of US$ 6.26 and US$ 4.15 billion respectively.
Challenges faced by the E-commerce market
Opportunities bring changes that lead to challenges. Potentially the E-commerce market in Indonesia is ranked number one in Southeast Asia but despite this large potential, many roadblocks are slowing down the industry. Gaining customer trust, unclear E-commerce regulations, complicated banking services, low investment in cellular networks are some major challenges faced by E-commerce. The bigger E-commerce challenges in 2021 came out as increased customer expectations and options and because of increased online shopping players and higher customer demands more fierce competition was seen.
Overcoming the Challenges
Marketers need to ensure an efficient supply chain process by developing an efficient workforce, marketing practice, and delivery systems, with which they can easily overcome the challenges coming their way in the future.
How MOCA can help marketers
There was huge competition in marketplaces. Every marketplace was fiercely competing to grab the attention of the public. MOCA continues to help advertisers to explore new user touch points and bring fresh and new placement and inventories such as MiChat, Resso, Snack Video, Mangatoon, etc to advertisers to expand their coverage. MOCA is becoming one of the most trusted and reliable partners for marketers to provide one-stop service in improving efficiency and effective communications across all OEMs and top publishers, to help advertisers to reach the target audience and to be the top of mind brand.