27 Million Indonesians are Spending US$12 Billion Online, is Your Company Ready?

Doc Brown shopping

Without question, Indonesia is one of the top countries with regards to adopting online services, especially when it comes to social media, but it’s also a country with high growth in e-commerce as online consumers are eager to conduct online trading whether it’s peer to peer or with online businesses. Digital advertising company Adways Indonesia has produced an infographic to be an easy reference for these behaviors and trends. Granted, there is hardly anything new to discover from these charts but it’s a useful reference nonetheless.

The infographic shows the growth of internet users from year to year from 2010 to 2014 and as a percentage of the population, growth of e-commerce since 2013, Indonesia’s adoption of social media services, and some of the major e-commerce companies in the country.

While the infographic is by no means comprehensive, it serves as a handy quick reference guide for brands and agencies for an overview of the market. However, when studied more closely, brands can determine how to approach the market that is gradually moving online.

This year, 33% of 82 million online Indonesians are expected to have spent money on the Internet compared to 28% of 71 million last year. That’s 7 million more people spending online, or far more than the entire population of Sydney or Singapore. All in, 27 million Indonesians are expected to have spent an average of US$444 online by the end of this year, for a total of almost $12 billion.

Also worth noting is that according to Facebook, there are roughly 44 million smartphone users out of the 70 million people that visit Facebook each month. That’s a significant market to address and one that should get brands to seriously think about their mobile strategy.

When DailySocial reported yesterday that PayPal was interviewing candidates for a country manager for Indonesia, that’s a major sign that despite the relatively slow growth of credit card usage in the country of fewer than a million new cards per year, online payment remains a significant field of interest especially given that there is no clear leader in that market.

According to AKKI, the Indonesian Credit Card Association, there are 15-16 million credit cards in active use in the country and cumulatively they are used to spend over $ 14.5 billion throughout 2014 until this past September, on track to reach $16 billion by the end of the year. That means on average, each card is being used to spend roughly $1000 per year. In 2013, Indonesians spent roughly $17.5 billion through credit cards.

What does all this means for brands? That means brands need to pay attention to the digital space even closer as consumer spending pattern is shifting to online businesses. Brands also need to understand that consumers who do go online tend to be far more critical than their offline counterparts, as they are more likely to have social media accounts in which they can easily voice their opinion on any issue that they come across.

Through online media, consumer advocacy of brands, whether induced, incentivized, or organic, have also picked up, leading to many opportunities for brands in seizing mindshare. In other words, consumer voice has become even louder and those who can accommodate this online behavior well will be highly rewarded.


[header image by AdDiction]