Indonesia To Be The Biggest Digital Economy By 2025

Indonesia’s e-commerce potential is expected to be worth about USD 46 billion, according to a recent study by Google and Temasek. Moreover, in less than 10 years, half of Southeast Asia’s e-commerce activities is predicted to take place in Indonesia; up from just a third in 2015.

By 2025, Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines are expected to hit USD 200 billion collectively in the digital sector. Indonesia’s digital economy in particular is estimated to account for USD 81 billion fuelled by more than 119 million online users.

Gervasius Samosir, Manager at Solidiance Indonesia, an Asia-focused management consulting firm, said “we currently live in a digitalized world – and this phenomenon has led to numerous business model shifts in many types of businesses, including traditional media in Indonesia”. He added, “Digital media companies in Indonesia are beginning to integrate their services with e-commerce, where it pushes for brand awareness and transaction simultaneously”.

A recent event report published by Solidiance, “E-commerce: Doom or Goldmine for the Traditional Media in Indonesia?” highlights growth opportunities in Indonesia’s traditional media industry despite the emergence of the e-commerce boom.

In Indonesia, ride-sharing services such as Uber, Grab and the local-grown motorcycle-taxi hailing service, Gojek, have all been in high demand – representing 43% of the market with value at USD 5.6 billion. With these ride-hailing digital unicorns catering to the country’s 2.6 billion population, Indonesia is expected to become the region’s biggest online travel market.

However, before Indonesia can pride themselves as the biggest digital economy in Southeast Asia, a number of challenges will need to be overcome. These include payment mechanism and consumers’ trust, as well as building good Internet and logistics infrastructure. A skilled workforce is also imperative to boost the sector’s growth. Home to more than 2,000 start-ups, Indonesia will need up to USD 20 billion worth of investment over the next decade to boost its digital economy.

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