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NEWS UPDATES Asean Affairs     October 27,  2016  




Avid internet users fuel Indonesia e-commerce

Nothing can stop Dendi Liya, 23, from checking and updating his social media accounts, except, of course, when he falls asleep.

“I even cannot resist sneaking a peak at my Instagram and Path accounts during work. So when I’m awake, I’m practically always connected to the internet,” Dendi, who works for a South Jakarta-based logistics company, told The Jakarta Post on Tuesday.

Dendi’s habit represents that of millions of Indonesian internet users who have been utilizing the technology as a primary means to not only stay close to their peers but also make other routine transactions and purchases.

According to data from the Indonesian Internet Service Providers Association (APJII) released on Monday, there are currently 132.7 million people in the country who have been exposed to the internet, representing half the population of Southeast Asia’s largest economy.

Of the figure, 129.2 million internet users are using social media services, a significant increase from 76.5 million in 2014.

A separate study from management consulting firm McKinsey, meanwhile, reported that Indonesians spend around 3.5 hours daily accessing the internet on mobile devices, longer than Americans, who average 1.7 hours a day .

The domination of internet platforms in Indonesia might be attributed to the affordable prices offered by internet operators in the country. Mobile broadband pricing in the country stands at US$3.4 per 500 megabytes, as reported by McKinsey, the world’s second-cheapest after India.

APJII secretary general Henry Kasyfi Soemartono said the increasing level of dependence on the internet has opened up opportunities for government and businesses to boost the e-commerce industry through, for example, the introduction of an easier and more secure online payment system.

Despite the huge number of internet users in Indonesia, only 46.1 million people have purchased items online more than once in a month, APJII data show.

“However, only 9.9 million users pay for their online purchases through internet banking. This leaves huge room for improvement for financial service providers to tap into the huge potential of mobile transactions,” Henry said.

Indonesia’s e-commerce market was estimated to be worth Rp 18 trillion ($1.38 billion) in 2015, according to World Economic Outlook data compiled by APJII.

During his February visit to California’s Silicon Valley, home to the world’s largest high-tech corporations, President Joko “Jokowi” Widodo proudly shared his vision to make Indonesia’s digital economy the biggest in Southeast Asia, amounting to a total value of $130 billion by 2020.

Since then, he has repeatedly called on stakeholders to support the development of a digital economy, particularly e-commerce, noting that Indonesia has abundant potential to compete with other countries in the sector.

Separately, Indonesia ICT Institute executive director Heru Sutadi underlined the importance of government intervention in creating safer and reliable e-commerce services to protect customers from online fraud.

“There are many cases in which e-commerce customers receive products of much lower quality than advertised online,” he said.

University of Indonesia economist Fithra Faisal Hastiadi also acknowledged the increasing popularity of internet platforms to promote products. He, however, suggested the government have only a minimal intervention approach to the e-commerce industry.

“The industry has its natural ways to grow,” he said. “Customers, for example, can use social media to review the level of e-commerce services and force unqualified providers to [get] out of the business.”



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