Exploring the Growth of E-commerce in Indonesia

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E-commerce is an application that emerged from technological development. This platform comes with a range of benefits for businesses, as it makes it easier to market your goods, saves money, and reaches more of your target market. That is what has made the growth of e-commerce in Indonesia soar. So what are its prospects in the future? Find out here!

The History of E-commerce Around the World

In the 1980s, e-commerce platforms were initially used only for data exchange between companies, known as EDI (Electronic Data Interchange). In the early 1990s, the internet became freely accessible to anyone, and a man named Phil Brandenberger from Philadelphia became the first person to make an online transaction, buying a Sting album on NetMarket.

Afterward, from around 1990 to the early 2000s, many online platforms emerged, such as Alibaba, eBay, and Amazon. Many online shopping platforms also began operating in Indonesia at that time, for example D-Net or Dyviacom Intrabumi. However, those platforms only facilitated Cash on Delivery (COD) transactions.

The beginnings of 100% online transactions only came when the Kaskus Buy and Sell Forum (FJB), Lippo Shop from Lippo Group, and Bhinneka.com by PT Bhinneka Mentari Dimensi appeared.

Factors Driving the Growth of E-commerce in Indonesia

The growth of e-commerce in Indonesia began around the 1990s with the emergence of IndoNet as the first Internet Service Provider (ISP), and the following factors contributed as well.

A growing population

Indonesia's population certainly influences the growth of e-commerce in the country. The larger the population, the larger the target market that becomes e-commerce users. When there are many transactions on these platforms, their growth naturally becomes faster and more rapid.

The widespread use of smartphones and the internet

You may still remember how much mobile phones cost when they were first launched. With very minimal features, such as calling and sending messages, you had to pay millions of rupiah to get one. However, over the years, the prices of electronic goods have become more affordable, and so have smartphones and internet access.

This was further supported by the Covid-19 pandemic, which forced in-person human activity to come to a complete halt. That was when activities began to shift to online platforms, shopping included. In the end, the trend of online shopping rose thanks to the many promotions that benefited buyers.

The popularity of social media

Social media turns out to play an important role in the growth of e-commerce in Indonesia. Platforms such as Facebook, Instagram, and TikTok probably occupy the top three spots of the most frequently used in the country. There you can find many influencers who share their daily activities, including the products they use. This in turn draws even more people to start shopping online on e-commerce. platforms.

Increasingly advanced financial technology

The global growth of e-commerce has gone hand in hand with the emergence of sales platforms and supporting payment systems. In Indonesia, there is now a reliable payment gateway for owners of growing businesses, meaning businesses that are growing from small to medium scale: Midtrans. With Midtrans, you can speed up, simplify, and secure your customers' payments.

With just one business account, you can accept up to 24 payment sources. What is more, business owners do not need to pay a subscription fee, because fees are deducted only after a transaction succeeds. Business owners who are still growing do not need to worry about losses from having to subscribe to a payment platform.

What Is the Future Outlook for E-commerce in Indonesia?

The outlook for e-commerce in Indonesia will certainly remain very good. Fundamentally, humans are social creatures, and the internet and online platforms offer easier and faster ways to interact. One form of interaction that is now trending is live shopping, a way of buying and selling that gives customers room to ask questions and discuss directly.

In fact, live shopping more or less adopts the concept of telemarketing, or selling products through television. The difference is that customers can ask questions and interact with the seller through the chat feature, making it more interactive. So get your business ready to grow even further through live selling.

The growth of e-commerce in Indonesia turns out to be not far behind the rest of the world. This is due to the large population, the widespread use of smartphones and the internet, the popularity of social media, and the presence of supporting financial technology. As a business owner, you should seize every opportunity available. Let's grow your business with live shopping and don't forget to integrate the payment gateway Midtrans as a solution for your business!