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The Rise of E-Commerce in Indonesia

February 2007
Marketing Magazine 

The Rise of E-Commerce in Indonesia

Synopsis

E-commerce in Indonesia has been steadily rising in popularity during the recent years. This growth has greatly changed the face of marketing.

According to a year-end study by Spire Research and Consulting, the number of transactions performed online reached almost 700,000 last year, an increase of 90% from 2001. As a testament, many established companies have jumped on the virtual bandwagon, such as Bhinneka, Electronic City and Gramedia Cyberstore.

The dot.com business also extends to new and rising names in Indonesia that do not have a brick-and-motar outlet, relying strictly on the internet to sell. Examples include Glodak Shop, Fast n Cheap, as well as Gudang Voucher.

In addition, the research has discovered that certain categories of products have already been on the internet market, such as electronics, computers, traveling packages, books hand phones and hand phone accessories, software, and flowers. Almost 75% of the total market is controlled by the electronics and the computers segment.

However, the payment methods are comparatively limited to bank transfers and cash on delivery. In comparison, Amazon.com – one of the most famous companies when it comes to e-commerce – has sales of more than 186 times that of Indonesia’s online business community. Still, the potential growth of online business in Indonesia is immense.

Due to the scale and outreach of the internet store, it is highly probable that ecommerce will play an important role in Indonesia in the near future.

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