Apparel, Footwear and Beauty Products contributed a majority share in Indonesia Online Retail Market- Ken Research

Indonesia’s internet user base has grown at a CAGR of 20.8% during the review period of 2009 to 2014. Colossal competition between mobile phone companies in Indonesia has led to the decline in mobile phone prices and subscription plans. Numerous businesses in Indonesia have recognized the affinity of social media and have used the opportunity to connect and assist various local startups such as “LakuBgt” and “Onigi”

During 2014, the E-commerce industry has garnered the attention of large population in Indonesia, which has signified the facts that people are anticipated to shop online more often. This change in trend has certainly helped the E-Commerce companies to set a benchmark for themselves and gain popularity among the customers, thereby bolstered the revenues.

Online Retail Market of Indonesia has undergone profound changes since modern outlets have increasingly replaced wet markets and independent small shops. As of 2014, Indonesia has numerous retail websites such as Rakutan, Zalora, Lazada, Lotte Group, PT Trans retail, PT superhero and others with innovative product offerings, attractive pricings, seasonal offers and discounts. Online retail market of Indonesia comprises of various domestic online retail portals, foreign online retail portals and online presence of brick and mortar stores.

In Indonesia, the demand/ purchases in online retail market has been largely confined to clothing/ apparels and footwear products. Indonesians have a habit of browsing more apparel/ clothing products as they intend to purchase more apparel and footwear products. The major reason behind the escalation in demand for clothing and footwear products is due to the presence of various products variants at lower prices as compared to brick and mortar stores coupled with rise in exposure of Indonesian consumers towards other foreign brands such as Adidas, Nike, Gucci, Speedo and others.

In Indonesia, the demand for online retail has been largely confined to metropolitan cities namely Jakarta, Surabaya, Bandung, Makassar, Semarang and Palembang. The major reason behind the incline in demand for online retail is paucity of time, higher personal disposable income, rising product variants (presence of various brands on one website) at reasonable prices and others.
Indonesia’s online retail market has grown year on year as people have switched their preferences towards online shopping. The major players have been in a race to increase their share in the industry by implementing various marketing initiatives, technology advancements and switching to different business models.
Tourism in Indonesia is a key part of the economy and a momentous source of foreign exchange. Online travel market of Indonesia is not akin to the offline travel industry. For ages, the country has used ticket booking counters for the purpose of travelling in comparison to travel websites/ applications. A decade back, the thought of booking tickets for travelling via online e-portals was completely inconceivable; however, the emergence of online travel sites has changed the views of millions of people.

Internet has a profound impact on the advertising market of Indonesia’s media landscape. Since its inception, advertising has majorly been done through billboards (print media), television, magazines and radio. Television has remained a dominant medium in the online advertising market of Indonesia. Traditionally, advertising through e-portals implausible, however with the rise in the number of digital advertising agencies the online advertising industry has witnessed a proliferation.

Online entertainment is an evergreen industry attracts customers with fascinating games, appealing videos and attention seeking movies. Traditionally, entertainment market had been confined to T.V., Radio and paper pamphlets, whether it is for games, news and movies. A decade back, the thought of getting entertainment through online e-portals was completely inconceivable, however, with the emerging entrepreneurial idea of opening online advertising, gaming and movie sites has changed the views of millions of people. Newspapers have been the major source of entertainment in Indonesia apart from television.

Indonesia E-commerce market has attained a small but significant share in the global online commerce market over the past few years. Since the Industry is at its nascent stage, the revenue generated by the local and global companies is expected to increase, which is likely to bolster the share of sales of online products in the overall market. This is also supported by the fact that more players are entering the market with different business models to tap the major share of customer base.

Some of the major players in Indonesia c-commerce market are Lazada (Retail), Zalora (Retail), Wego (Travel), Tiket (Travel), Ogilvone (Advertising) and others. Introduction of PP legislation in Indonesia is expected to enhance the c-commerce market of Indonesia due to the demur of grey areas in online payment and online commerce market.
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