Everything an outsider needs to know about Indonesian ecommerce in 2014

Indonesian consumers became more discerning in 2014 and looked for more ways to shop and engage with brands online, according to an ecommerce report conducted by Singapore-based global logistics firm SingPost.

Last year, Indonesia clocked in at 74.8 million internet users. Now, SingPost says the archipelago’s internet user base is slated to have a 20 percent year-on-year growth until 2016, which will lead to 102.8 million Indonesians online by then. This is largely due to the increasing spending power of the middle class. Fierce competition between mobile companies is also driving mobile phone and subscription plan prices down, making them increasingly affordable to Indonesians on modest wages.

With the words “ecommerce” and “Indonesia” increasingly going together like peas and carrots, Tech in Asia thinks it’s time to shed some much needed light onto the local landscape for those who may still be in the dark. Below is everything you need to know about Indonesian ecommerce as of 2014.

Indonesians use social media to sell stuff

SingPost says that between January and March 2014, Twitter users in Jakarta posted 2.4 percent of the global total of 10.6 billion tweets during that time period, maintaining the city’s reign as the Twitter capital of the world. However, the nation’s most popular social media channel continues to be Facebook, with 69 million active users. As of September, Indonesia has 30 million Line users. Remarkably, nearly 27 percent of all the country’s ecommerce transactions occurred via social media in 2014.

The use of social media to facilitate ecommerce is a huge opportunity for any consumer-driven business to think about before coming to Indonesia. The birth of local startups like LakuBgt and Onigi, which assist businesses selling on these social platforms, is another indicator that the archipelago’s social commerce sector is growing rapidly.

Who is the Indonesian shopper?

Last year, Indonesia had 4.6 million online shoppers. This year, it has 5.9 million. By 2016, SingPost estimates the country will have 8.7 million local shoppers on the internet. 20 percent of Indonesian online shoppers prefer conventional shopping sites like Lazada or Zalora, while 26.4 percent prefer social media like Facebook or Instagram. 26.6 percent prefer online forums or classified sites like Kaskus or OLX, and surprisingly, the highest percentage of online shoppers in Indonesia would rather buy from messaging apps like Blackberry Messenger or Line.

Indonesians are risk-averse and late adopters of new products and technology, according to McKinsey and Co. Their preference for channels like forums and social networking sites, which allow for interaction with sellers and other customers, is apparently so that they can ask questions and receive recommendations from a real human before committing to a purchase.

While Indonesians shop across multiple categories, the most popular one is by far clothing and apparel, with 61.7 percent of the nation’s online shoppers making a purchase in that category last year. Females reign supreme in the archipelago’s ecommerce space, with women having higher purchase rates, and the highest spending amount on clothing, mobile devices, travel items, laptops, and accessories.

See: 18 popular online shopping sites in Indonesia (2014 edition)