Sat, 18 Jul 2015

Indonesia online commerce could be be worth Rp300 trillion ($25 billion) by 2016, almost three times that the online shopping market in 2013 which was worth $8 billion. This was revealed in a joint report released by idEA, Google Indonesia, and Taylor Nelson Sofres (TNS).

With around 297 million mobile phone subscriptions and 83.6 million Internet users, Indonesia is currently a hotbed for the e-commerce industry.

Communications and Information Minister Rudiantara said that Indonesia’s e-commerce is likely to grow to around $20 billion this year. Despite growing exponentially, Indonesia’s e-commerce transaction volume was still much lower than that of China, he said, adding that the total value of e-commerce transactions in Indonesia recorded $12 billion, last year.

According to the rating agency Pefindo’s analyst Guntur Hariyanto, research from various domestic and global institutions shows that the growth in online shopping’s value has been high, penetration of e-commerce has broadened.

Similarly, Indonesia-based ICS predicts that the e-commerce market in the country will grow 42 per cent by the end of this 2015.

Local e-commerce players have been trying to find ways to cash in on the country’s growing market. Diversified conglomerate Lippo Group recently announced that it would invest $500 million to develop, a website that will help sell products from the group’s fashion retail chain PT Matahari Department Store.

ICS reported, there are at least eight Indonesian companies are entering e-commerce industry, namely PT Mitra Adiperkasa Tbk (MAPI), PT Sumber Alfaria Trijaya Tbk (AMRT), PT Erajaya Swasembada Tbk (ERAA), PT United Tractors Tbk (UNTR), PT Elang Mahkota Teknologi Tbk (EMTEK), PT Trikomsel Oke Tbk (TRIO), PT Panorama Sentrawisata Tbk (PANR), and PT Surya Semesta Internusa Tbk (SSIA).

Mitra Adiperkasa Tbk plans on focusing more on its e-commerce capability, especially on its mapemall service, which is set to be launched in the second half of the year.

Sumber Alfaria launched its retail website alfaonline by injecting Rp 12,5 billion through its subsidiary, PT Sumber Trijaya Lestari. Panorama, on the other hand, has build its digital brands through ticket reservation portals, including BookPanorama, Panorama-Tours, MyHotelFinder, Travelisious, and PHM.

In the real estate sector, Surya Semesta has a diversified business spanning tourism – through PT Horizon Internusa Persada (Travelio) with a vision to be the best online hotel platform in Asia Pacific.

Elang Mahkota Teknologi (Emtek), TPG Capital, and SquarePeg Capital participated in PropertyGuru’s S$175 million funding round, while Emtek has invested at two e-commerce players – BukaLapak and Bobobobo.

In telecommunication distributor sector, Erajaya and Trikomsel. Erajaya are targeting the market through Erafone, while Trikomsel has established a special division called Trikomsel Internet Media Incorporated (TIMI). Moreover, the company also plans on forming a joint venture with SingPost E-Commerce, Singapore Post’s subsidiary, to develop an e-commerce business in Indonesia.

In an effort to create a more conducive climate for the e-commerce industry, the government plans to issue a set of regulations called the “e-commerce roadmap” in the next three to six months. The roadmap will provide clear guidelines regarding logistics services, payment gateways and tax —among others — for the e-commerce industry, said Sofyan Djalil, Coordinating Economic Minister.

Under the Presidential Decree No. 39/2014, the government has included e-commerce among the industries closed to foreign investment; requiring that the e-commerce businesses be wholly owned by local players.

Initially, the regulation aimed to boost the growth of local e-commerce players However, it has been deemed counterproductive by a number of e-commerce associations.