Garuda Indonesia’s VP of digital business helps retailers demystify Indonesian ecommerce

Daniel Tumiwa (right), VP of digital business and ecommerce for Garuda Indonesia.

According to Daniel Tumiwa, VP of digital business for Garuda Indonesia and chairman of the Indonesian Ecommerce Association (idEA), by 2020, Indonesia’s mass consuming class (those that earn between US$5,000 to US$30,000 per year) will increase to 53 million households. Currently Indonesia has 76 million internet users, and since 2011, that number has grown by 20 percent annually. In the next five years, the number of online shoppers in Indonesia will grow from three percent of the population to 30 percent.

Tumiwa was first to take the stage on the second day of Startup Asia Jakarta, delivering a keynote speech on demystifying ecommerce in the the archipelago.

Tumiwa cited a TNS online shopping study that claims 46 percent of internet-using Indonesians who have never shopped online expect to make their first ecommerce purchase within the next 12 months. 77 percent of local online retailers are confident that the internet can serve as their primary channel of revenue.

See: This startup bets that its kiosks can take Indonesian ecommerce to the next level

An idEA study shows a staggering 78 percent of Indonesia’s online shoppers have made at least one fashion purchase, 46 percent use mobile to shop, 43 percent buy electronics, 39 percent buy books and magazines, and, surprisingly, 24 percent do their grocery shopping online.

In 2013, the most popular way to pay in Indonesia was cash on delivery, with 62 percent of all online shoppers showing a preference for the method. This year, that number fell to only 25 percent. In the same time period, the preference for paying via ATM transfers fell from 66 percent of Indonesia’s online shoppers to 41 percent. These declines show a steady switch to alternative payment methods like internet banking, SMS and mobile banking, and emoney options.

By and large, Indonesian online shoppers are showing a preference towards convenience over price. However, for the nation’s less frequent online buyers, 67 percent claim that if they can get a better deal online, they will not hesitate to pull the trigger.

This is part of the coverage of Startup Asia Jakarta 2014, our event running on November 26 and 27. Follow along on Twitter with the #startupasia hashtag.