Ecommerce has grown rapidly in Indonesia over the last few years. Nonetheless, McKinsey reports that 70% of online spending occurs in the country's four largest metropolitan areas: Greater Jakarta, Bandung, Semarang, and Surabaya whilst penetration into rural areas remains low due to obstacles such as limited internet access, a sizeable unbanked population, and high logistics costs. As consumers in these areas are generally less familiar with online shopping, they rely more heavily on social interaction to influence their purchasing decisions.
Consequently, an effective approach in these markets is often through the concept of social commerce, where physical goods are purchased and sold via social media platforms such as Facebook, Instagram, and WhatsApp, and then settled via a different payment method. With over 170 million of its people connected online, Indonesia is well-placed for the development of this commercial channel and McKinsey has predicted social commerce will grow from $3 billion in 2017 to $25 billion in 2022, representing around 38% of Indonesia's $65 billion online commerce GMV.
This story is from the October 2021 edition of Forbes Indonesia.
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This story is from the October 2021 edition of Forbes Indonesia.
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