6 takeaways from Indonesia’s ecommerce battlefield

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Southeast Asia has become a hotspot thanks to booming growth. The online sector is expected to reach more than US$87 billion by 2025, and many global players, such as Alibaba and Amazon, are scrambling to get their own slice of the ecommerce pie.

However, what new entrants often overlook or find out too late is the region’s fragmented nature. Every country brings with it a different set of strengths and challenges.

For any player looking to grab a share of the Southeast Asian market, the key to unlocking its potential is knowledge. Different players exist in several market segments, and some dominate certain niche segments. All these players hope to solve problems or capture an untapped opportunity, but the ecommerce bottlenecks vary across borders.

Here are six takeaways for the region’s biggest and most promising market, Indonesia.

Indonesia’s ecommerce landscape

The country is on track to become one of the biggest markets in Asia, with the potential to comprise 52 percent of Southeast Asia’s entire ecommerce value by 2025.

Despite the country’s attractive US$46 billion ecommerce valuation that keeps foreign investors and companies pouring in, local players are not intimidated by the influx of global ones. This infographic, from Ecommerce IQ, shows a bird’s eye view of Indonesia’s many local companies, but what else can we tell from Indonesia’s ecommerce ecosystem?

1. Local players are dominating the market, especially in niche sectors

Indonesian run companies are selling in every sector of ecommerce in Indonesia, especially C2C, lifestyle and travel, and smaller niches. These companies include: Cipika, Qlapa, KuKa, and Limakilo.

Locally owned companies better understand the country’s payment pain points and allow customers to buy products via installments through their website without a credit card.

Local players also target a smaller consumer segment, which is one way to empower local SMEs to go online. It also means less competition as foreign and big players usually try to compete over a more mainstream audience.

Locally owned companies better understand the country’s payment pain points.

A reason for the success of Indonesian-owned companies is due to familiarity of local trends and behavior. These companies customize marketing campaigns to match cultural preferences and identify better with the customer.

More than half of the top 20 websites in the archipelago, under SimilarWeb’s shopping category, are native Indonesian-run companies.