Indonesia is one of the most culturally diverse countries in the world and has the largest economy in Southeast Asia with a market size of almost 50%. Its’ internet economy is expected to surpass US$130 billion by 2025 as more people shift to the digital world as a result of the COVID-19 pandemic.
Advertising and e-commerce and Indonesia’s economy
When you think of Indonesia, the first word that come to mind is “Bali” but surprisingly it is not one of the top cities in terms of GDP. Here are the top five cities:
Indonesia’s online market consists of two models: e-commerce platforms and social commerce. Social commerce is prevalent in Indonesia as a form of informal commerce with 80% of SME merchants selling their products on social media platforms and 40% of sales happening through social commerce platforms such as WhatsApp. Indonesia has had a whopping increase of 10 million active social media users compared to 2021.
Traditional media is very relevant for advertising. Channels such as televisions commercials, in-store ads, newspaper ads as well as word-of-mouth are still very influential in Indonesia. It is important to note that following the pandemic, there is continued growth in digital and online media adoption.
The top e-commerce sites/platforms in Indonesia are Tokopedia, Shopee, Blibli, and Lazada. Tokopedia is the largest online marketplace in Indonesia with a monthly traffic estimate of 148,500,000.
COVID-19 and Indonesia
Indonesia’s economy was hit hard by the pandemic, one of the many reasons being the loss of tourism. However, digitalisation provided opportunities for businesses as Indonesia adapts to a COVID-19 economy. Lockdowns have le to more stores and brands to transition to the digital landscape with a majority of Indonesian consumers preferring to shop online.
88% of Indonesians who have shifted to new digital shopping methods have the intention to continue this beyond the pandemic with many consumers planning to shift their shopping completely online. During the COVID-19 pandemic Indonesia emerged as one of Southeast Asia’s highest adopters of e-commerce and mobile e-commerce. This is a result of Indonesia’s sheer market size and digitally savvy consumers.
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