The e-commerce industry is thriving in Indonesia despite limitations posed by inadequate infrastructure and poor payment systems, a Financial Times report said.
Rakuten's Rio Inaba, the Chief Executive Officer of Rakuten's Indonesian division, found that the relaxed office culture in the largest economy in Southeast Asia worked to their advantage. Due to the high cost and slow speed of home Internet, white-collar workers use the office computer to purchase clothes, gadgets and others online. That puts online shopping in Indonesia to be at its busiest during office hours, the report said.
Inaba told FT, "Our busiest time is still about 11am before traffic dips at lunchtime and then picks up again when people get back to their desks."
The growing popularity of cheap mobile devices like smartphones and tablets in Indonesia, however, is fast opening access to the Internet. This has moved the country's young e-commerce market to the point that it is ready to scale and attain profitability despite the difficulties it faces, which include the lack of infrastructure and convenient payment systems, the report said.
Inaba said, "We're seeing phenomenal growth in mobile transactions." He added that the order volume and revenue from Rakuten's Indonesian operations are growing more than twice each year due to the demand for items like fashion accessories, gadgets and toys, the report said.
Visa Indonesia Chief Executive Officer Ellyana Fuad thinks that Indonesia's e-commerce industry is heading towards a "big bang" since, according to Redwing data, Internet users will increase to 125 million by 2017 and owners of smartphones will also grow to 52% from today's 20% in that year, the report said.
There are no hard figures on the e-commerce market in the fourth most populous country in the world because it is still small and patchy. However, industry executives estimate that yearly sales could potentially reach $10 billion by the end of next year from today's $1 billion to $3 billion, the report said.
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