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High Online Traffic Boosts E-Commerce Market in Jakarta

By Market Research Indonesia | Posted May 10, 2019

Jakarta, the capital city of Indonesia, home to more than 30 million people is one of the busiest cities, both offline and online. The city’s attractiveness for the e-commerce industry mainly arises from its large population, 129.7 billion retail market size and daily internet usage of which 30% of its population are millennials, supposedly the biggest customers of e-commerce. In terms of internet usage, people normally spend an average of 9 hours on their internet-connected devices daily, more than half of their time awake. In terms of user satisfaction, Jakarta, alongside Beijing and Shanghai, has the highest satisfaction level for e-commerce in the city, due to its customer-centric features and willing to change attitude from the customers.

Based on our latest report, “Top E-commerce Cities in Asia”, Jakarta is one of the top e-commerce cities, along with other cities in Asia, such as Singapore, Kuala Lumpur Tokyo, and many more. The report aims to shed light upon the significance of e-commerce landscape in Asia and how it has quickly adapted to global trends. An “e-commerce city” here is referred to an urban city with interconnected infrastructure that makes up an e-commerce ecosystem that helps it thrive.

e-commerce in asia
Source: pexels

Apart from the large e-commerce market, the report stated that Jakarta has a bit of a challenge especially with the low penetration of credit card and digital banking. The research shows that Jakarta’s ecosystem, competitiveness, and customer behavior ranked 6th among the 12 countries. Other downsides are the weak pool of human resource to support growth, technology advancement and dynamic customers’ needs to cater to the industry. Logistics inefficiency to serve wider areas and limited government support on clear regulation and law enforcement, are also among some of the barriers to Jakarta’s e-commerce development.

Yet, the report noted that Jakarta still has more to offer with its sufficient internet speed, high truck to population ratio, and low average logistic cost. Jakarta’s emerging middle class with higher disposable income is also expected to spend more on personal items, such as fashion, makeup and electronics through e-commerce sites. A large portion of financing from large international venture capital and private equity funds behind top marketplaces, brings significant experience in the city’s e-commerce market growth. Jakarta will continue to grow in the future, hopefully becoming more e-commerce friendly, both for businesses and customers.

Based on our studies, the e-commerce industry has continued to witness exponential growth around the world, with an astonishing USD 2.86 trillion in 2018 and are estimated to grow further to USD 6 trillion in 2022. The not to be missed Asia Pacific market had a 35% economic growth rate in 2018 with USD 1.8 trillion retail e-commerce sales, positioning it to be a clear leader to achieve one-fourth of global e-commerce share by 2023.

Jakarta and other global cities can improve their e-commerce ecosystem through the recommended framework in the report, providing 5 key building blocks for startup ecosystem to reach its full potential, including: stable and predictable regulatory environments; adequate talent; market readiness and robust infrastructure; funding to scale up the business, and global culture to empower innovative ideas.

Download the full report on Top E-Commerce in Asia

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