This strategy is also viewed as a means of reaching out to the populace in lower-tier cities and rural areas, where ecommerce penetration is relatively low but still have enormous potential. According to Alpha JWC Ventures and Kearney, lower tier cities contributed 46% of Indonesia's GDP in 2020, compared to Jakarta's 17%. As economic activities in these lower-tier cities expand, their contribution to GDP is expected to reach 51% by 2025, reducing Jakarta's share to 11%. Additionally, their digital adoption is expected to catch up to that of contemporary urban areas within the next five years.
While a lack of infrastructure is one factor, rural areas also have markedly different purchasing habits than urban areas. Due to their lower digital literacy, they are not as accustomed to making online purchases, and trust is a critical factor when making a purchase.
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