E-commerce boom expected in RI in three years

E-commerce boom expected in RI in three years

JAKARTA (JP): E-commerce is expected to start booming in
Indonesia in three years thanks to a better telecommunications
infrastructure, a growth in the number of computers and more
Internet users, an international consulting firm has said.

President of Boston Consulting Group (BCG) in Indonesia Bernd
Waltermann said over the weekend Indonesia undoubtedly had high
potential as a market for e-commerce, but the business could not
pick up that fast because of the problems of infrastructure.

"Indonesia is only a nascent e-commerce market at present. But
we expect to see very steep growth in the near future in line
with the country's full recovery," he said.

According to a recent survey conducted by BCG in 14 Asia-
Pacific countries, Indonesia, together with China, India,
Thailand, Malaysia and the Philippines, is among one of the
nascent e-commerce markets in the region due to its undeveloped
Internet infrastructures that hamper the wide spread of e-
commerce in the areas.

According to state telecommunications firm PT Telkom, there
are now 2.06 million telephone lines, an estimated three to four
million personal computers and over one million Internet users in
Indonesia, which has a population of more than 200 million.

BCG's survey found that in terms of online spending per
capita, Indonesia with an online spending of only 0.01 U.S. cents
per capita in 1999 was left behind India, which during the period
recorded 0.03 cents per capita in online spending, or Thailand
with 0.2 cents per capita or Malaysia with 0.5 cents per capita.

Singapore, one of the emerging markets according to the
survey, recorded an average $5 in online spending per capita last
year, while the developed markets like Australia saw $20 per
capita in online spending.

The survey predicts Indonesia's Internet users will swell from
about one million at present to over four million in 2003.

BCG Indonesia's vice president Scott T. Desmarais said sales
from online transactions in Indonesia reached nearly $2 million
in 1999.

He said there were 31 active online service providers in
Indonesia as of the end of 1999. That figure is expected to grow
to 60 within two to three years.

He said travel-related web site operators had so far dominated
e-commerce in Indonesia, accounting for 80 percent of the total
online transaction value.

"Most of the transactions are on ticket purchases and fees for
travel agents," he said.

He said Asia-Pacific countries were projected to experience a
a 200 percent growth in e-commerce this year.

Scott said should the regional growth have an impact on
Indonesia, the country could see total revenues from online
transactions soar to $5 million by the end of this year. (cst)