A Short Guide to E-Commerce in Indonesia 2021

Encouraging Progress and Outlook Even During the Pandemic

Indonesia is the largest and fastest-growing internet economy in ASEAN and the third largest in Asia after China and India. The market size is estimated to reach around USD55 billion in 2021. The Gross Merchandise Value (GMV) of Indonesia’s internet economy was estimated at 2.9% of GDP in 2018.

The key to Indonesia’s investment story is consumption. A large population, improving middle class, and growing e-commerce are the key drivers for growth of consumption. Of particular note, the state of the current Indonesian e-commerce market is similar to China’s around a decade ago.

According to a report by Google and Temasek/Bain, Indonesia’s e-commerce economy has been growing by averagely 49% per year since 2015 to approximately USD40bn in gross market value in 2019, and is expected to reach USD130bn in 2025, making it the largest e-commerce economy in Southeast Asia. Online purchases have shifted from big ticket items, such as electronics, to more frequent purchases of lower-cost items, such as groceries, personal care, and apparel.

We see that the COVID-19 pandemic has accelerated the shift into online shopping even faster. The five largest Indonesian marketplaces are Tokopedia, Shopee, Bukalapak, Lazada, and Blibli. Logistics service providers, enabling last-mile delivery, attempt to gain market share from these marketplaces as well as social commerce.

The fast-growing e-commerce in Indonesia is driven by several factors, including a large number of mobile phone users, digitally savvy young consumers, increasing micro, small, and medium enterprises’ (MSMEs) participation in online commerce, growing investment in online commerce, and supportive government policies. About three-quarters of online consumers in Indonesia are using mobile devices to shop. Affordable devices and mobile data have encouraged e-commerce penetration especially amongst the young, and this is in a country where about 87 million of its population are between the ages of 16 and 35 years, and digitally savvy.

Leading Marketplace Platforms in Indonesia

Tokopedia continues to strengthen its position in the local market or marketplace industry in the country. Based on Similarweb data for the first quarter (Q1) 2021, Tokopedia is the most accessed marketplace on the internet.

Tokopedia is recorded to control 32.04% of marketplace traffic in Indonesia in January 2021. In March 2021, Tokopedia's traffic share percentage has increased to 33.07%. The number of monthly visits during the first quarter of 2021 reached 126.4 million, while monthly unique visitors reached 38.93 million.
Shopee is in second place with a 29.73% traffic share in March 2021. This percentage is a decrease compared to Shopee's traffic share in January 2021 which reached 29.78%. During January-March 2021, Shopee pocketed 117 million monthly visits and 35.74 million unique visitors per month.

Meanwhile, the other top five ranked places are occupied by Bukalapak, Lazada and Blibli in the March 2021 period.

As of March 2021, Bukalapak recorded a traffic share of 7.79%. On the other hand, during the first quarter of 2021, Bukalapak recorded monthly visits of 31.27 million, while monthly unique visitors were 12.83 million.

Lazada in March 2021 has a traffic share of 7.45%. In January-March 2021, Lazada's monthly visits reached 28.20 million and monthly unique visitors were recorded at 11.22 million.

Blibli closed the top five with 4.86% traffic portion in March 2021. In addition, in the first quarter of 2021, Blibli's monthly visits amounted to 18.52 million, while its monthly unique visitors reached 9.64 million.
During March 2021, iPrice, Amazon, Ralali, Cekresi and JD.ID were ranked respectively. Governor of Bank Indonesia Perry Warjiyo had said that digital economic transactions will be more rapid this year.
He projects that online transactions or e-commerce through the marketplace this year will grow to 33.2% from 2020. This means that it will increase from IDR 253 trillion to IDR 337 trillion in 2021.

The growth of online trade, especially during the pandemic, has provided special momentum for micro, small and medium enterprises (MSMEs) selling on the marketplace. Apart from being able to maintain business through digital channels, local MSMEs can also expand product reach while keeping jobs available.