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Page 1: How E-Commerce Shape the Future of Indonesia

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How E-commerce Shape the Culture in Indonesia By idEA (Asosiasi E-Commerce Indonesia)

Presented by Mr. Daniel Tumiwa, September 30, 2015 Indonesia id-byte 2015

@kelikharjono

Page 2: How E-Commerce Shape the Future of Indonesia

+ Indonesia is among the biggest e-commerce market in SEA Market Size ($ billion, 2013)

Vietnam

•  91 million inhabitants •  40 million internet users •  24 million digital buyers

Thailand

•  65 million inhabitants •  19 million internet users •  14 million digital buyers

Malaysia

•  30 million inhabitants •  20 million internet users •  16 million digital buyers

Indonesia

•  248 million inhabitants •  39 million internet users •  5 million digital buyers

Singapore

•  5.5 million inhabitants •  4 million internet users •  3.2 million digital buyers

The Philippines

•  97 million inhabitants •  36 million internet users •  25 million digital buyers

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Note : Market Size figures are rounded Source : International Monetary Fund

$0.8 $0.9

$1.3 $1.3

$1.7 $1.0

$7.0 ASEAN 6

21.5% 26.4%

53.3%

58.2% 25.8%

2%

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+ But it is still way smaller than these e-commerce giants of the world Market Size ($ billion, 2013, % of global total)

EU 5

•  317 million inhabitants •  247 million internet users •  180 million digital buyers

Japan

•  117 million inhabitants •  110 million internet users •  86 million digital buyers

United States

•  320 million inhabitants •  269 million internet users •  197 million digital buyers

China

•  1,368 million inhabitants •  626 million internet users •  309 million digital buyers

ASEAN 6

•  537 million inhabitants •  158 million internet users •  87 million digital buyers

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Note : Market Size figures are rounded Source : International Monetary Fund EU 5 includes The European Union’s Five Largest Economies : Germany, France, The UK, Italy, Spain

$230 19%

$119 10%

$395 32%

$181 15%

$7 0.6%

World $1,221

Rest of the World

$289 23.4%

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+ The growth rate of our income per capita is far higher than the global average

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2%

4.10% 4.60%

4.10%

5.70%

6.30%

1.50%

2.70%

2.10%

1.40%

3.20% 2.90%

1.20%

2.30%

1.30% 0.80%

2.00% 1.50%

Global average

Indonesia Thailand The Philippines Malaysia Singapore

2009-14 2014-19 2019-24

Note : Source : International Monetary Fund

Page 5: How E-Commerce Shape the Future of Indonesia

+ Indonesia economic growth will be fueled by consumer spending as the middle class continue to rise

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By 2020 the mass-consuming class* will increase to 53 million households *Mass-consuming class is defined as those households with annual disposable income between USD5-30k per annum

At market exchange rates and 2010 constant price Source : Accenture; Oxford Economics

2010 2020 US$, 000s

50+

30-50

15-30

5-15

0-5

22%

65%

By 2020, 65% of Indonesia’s households are forecast to be in the US$5-15 disposable income band and 22% in the US$15-30 band

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+ Indonesia is urbanizing at a rapid clip. By 2020, Indonesia will be dominated by urban dwellers

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Source : Euromonitor, “Indonesia in 2030: The Future Demographic”, August 2010

0

50

100

150

200

250

300

2000 2005 2010 2015 2020

Urban Rural Total Population, In Million

42% 46% 50%

54% 57%

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+ Sumatra and Sulawesi are the next regions of urban growth 7

Source : Euromonitor, “Indonesia in 2030: The Future Demographic”, August 2010

Total Population, In Million

Top 10 biggest cities by population size in 2010 and prediction for 2020

Sumatra

Kalimantan

Jawa

Sulawesi

Jakarta

Surabaya Bandung

Bekasi

Medan

Tangerang Depok

Semarang

Palembang Makassar

2010

2020

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+ In compare to other countries, majority of population in Indonesia are still purchasing offline, but that’s about to change

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Source : Frost & Sullivan, A.T. Kearney Analysis

Percent of retail sales made online (2014, % of total sales)

7.80% 7.20%

5.80%

4.50%

Europe China USA Singapore Malaysia Thailand The Philippines

Indonesia Vietnam

Around or below 1%

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+Many Indonesian are still trapped in these misconception 9

Perception Vs. Fact

What they think/ want The reality

I’d like to touch/ try the goods before buying them (41%)

Return policies are being offered

I’m not clear on warranty (38%) Warranty guidelines are mostly clear

I do not have a credit card (35%) Multiple payment options: credit card, debit card, bank transfer, cash on delivery, rekber

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+ By 2017, we could be the biggest e-commerce market in SEA

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Source : eMarketers; AT Kearney Analysis

Note: ASEAN 6 includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam. EU 5 includes the European’s largest economies: Germany, France, the UK, Italy, and Spain

1.30 1.30 1.00 1.70 0.90 0.80

Indonesia Malaysia The Philippines Singapore Thailand Vietnam

25.00% 25.00%

11.00% 10.00%

6.00%

China Asean 6 United States EU 5 Japan

25-30

10-15 8-12

7-10

12-15

5-7

Market Size ($ Billion)

Estimated e-commerce growth rate (2013-2017)

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+ If we do it the right way, we could unleash Indonesia and SEA as the next e-commerce super power

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Source : AT Kearney Analysis

2000 2005 2010 2015

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+ The e-commerce boom will also impact financial industries, as people opt for more convenience transaction method

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COD ATM Transfer

Alternative Trx

GNNT Society

Less Cash Society

2013

62% 2014

25% 2013

66% 2014

41% 2013

10% 2014

12%

•  Internet Banking •  Rekber •  SMS/Mobile Banking •  Emoney •  Debit Card

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+ The GOAL 13

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