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

  • + 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

    2

    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%

  • + 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

    3

    Note : Market Size figures are rounded Source : International Monetary Fund EU 5 includes The European Unions 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%

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

    4

    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

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

    5

    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 Indonesias households are forecast to be in the US$5-15 disposable income band and 22% in the US$15-30 band

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

    6

    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%

  • + 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

  • + In compare to other countries, majority of population in Indonesia are still purchasing offline, but thats about to change

    8

    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%

  • +Many Indonesian are still trapped in these misconception 9

    Perception Vs. Fact

    What they think/ want The reality

    Id like to touch/ try the goods before buying them (41%)

    Return policies are being offered

    Im 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

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

    10

    Source : eMarketers; AT Kearney Analysis

    Note: ASEAN 6 includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam. EU 5 includes the Europeans 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)

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

    11

    Source : AT Kearney Analysis

    2000 2005 2010 2015

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

    12

    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

  • + The GOAL 13

  • + 14