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Indonesian E-Commerce Trends


softwareseni.co.id, Technological advances have changed the way we do our activities. One of them is the way we shop. The existence of the internet makes us no longer need to come directly to the market to get the goods we want. Just open the e-commerce application, then all the products you need can be purchased. The pandemic that took place in the last few months has even made Indonesia's e-commerce business progress rapidly with the level of transactions continuing to increase. Likewise, Indonesia's e-commerce trends are changing rapidly. E-commerce itself is a term used to refer to all buying and selling activities carried out via electronic devices. Although television, radio, and telephone are also electronic devices, the term e-commerce is currently more closely related to the internet as an intermediary. Although nowadays you can find existing e-commerce applications, it is not impossible to create your own application. With the support of a reliable team in software development and website development, anyone can create their own e-commerce.

Overview of the E-Commerce Market in Indonesia Today

Indonesian e-commerce has a significant growth rate. Reported by Katadata, Merchant Machine (a British research institute) said that Indonesia was ranked in the top 10 world countries with the highest e-commerce growth. In 2018, Indonesia recorded growth of up to 785. One of the reasons is the increasing internet penetration in the country. According to the research, the average Indonesian spends around IDR 3.19 million per person to shop online. Some of the products that are widely chosen are airline tickets and hotel reservations. Other popular products that many Indonesians buy are clothing, footwear, health products, and beauty products. Below Indonesia, there is Mexico which has a growth rate of 59%. Then, followed by the Philippines in third position with a growth rate of 51%. Reporting from Sirclo, Indonesia is currently the largest e-commerce market in Southeast Asia. Based on data from WeareSocial and Hootsuite, as many as 90% of the total internet users in the country have shopped through the internet. Due to the high activity of online shopping in Indonesian e-commerce, its market capitalization in 2019 reached IDR 294 trillion. This value according to McKinsey will continue to increase to reach $ 40 billion in the next 2 years. What causes the Indonesian e-commerce market to grow so aggressively like this?

• High growth of middle class society. The middle class society in the country is growing very significantly. As much as 21% of the total population of Indonesia in 2019 is the middle class population. This growth is also seen in the increasing spending on consumer goods made by the public online. There was an increase of up to 23% in 2018 compared to the previous year.
• Internet penetration is getting higher. As mentioned earlier, one of the factors that triggers the increasing growth of e-commerce in the country is the increasing number of internet users. Mobile device sales are also growing rapidly. This further widens the gap for the public to participate in enjoying online shopping services, either through social media, marketplaces, or regular online stores.
• The more advanced financial technology. Financial technology or fintech is a lighter that plays a big role in the progress of e-commerce. These companies provide a variety of payment options that make it easier for people to shop. Based on July 2018 from Google, there are at least 66% of the Indonesian population who do not get bank services (do not have an account). The existence of fintech companies with online payment services through e-wallet applications and credit systems (paylater), makes the online shopping process easier.
• Homeland e-commerce companies receive an injection of funds from outside investors. Indonesia's fertile e-commerce landscape makes many investors look to local companies. Last year, Alibaba invested $1.1 billion in Tokopedia. This injection of funds then raised Tokopedia's class to become a unicorn company.
• Companies are starting to build their online presence. The increasing public need for online shopping services has a symbiotic relationship of mutualism with entrepreneurs. This can be seen from the incessant promotion and online sales carried out by companies. The higher public demand for various online products also provides an opportunity for companies to start using e-commerce in marketing their products.

With this huge opportunity, producers only need to read the market, including consumer trends and habits, in order to prepare products and appropriate promotion methods. In this way, entrepreneurs can manage and develop their business to maximize their sales.

E-Commerce Trends Worth Emulating

For those of you who use e-commerce to sell, there are several rising trends in 2020 - 2021. Check out some of them in the following list for reference!


1. Trends in Eco-Friendly Products In the past few years, campaigns to protect the earth and the environment have been more intense. The younger generation and nature lovers are some of the groups that promote eco-friendly products that we can easily find. The steps they take to present environmentally friendly products are quite diverse. Some make products from recycled waste or from organic materials. Examples of items include plastic bags used for instant coffee packaging, wooden plates and cutlery, reusable wooden straws, and so on. Currently as many as 87% of consumers feel more interested in buying goods from manufacturers that make a positive contribution to the environment, both natural and social. This opens up opportunities for entrepreneurs to implement eco-friendly trends. To reduce plastic waste, traders are starting to use biodegradable packaging made from processed cassava which is easily destroyed. Banish Skincare and several other cosmetic brands also choose socks and cardboard made of banana leaves as wrappers. This is much more economical and safer than using regular bubble wrap.
2. More Flexible Payment Method For entrepreneurs who sell high-priced products, achieving the desired sales target is certainly difficult. This is because many consumers feel that it is too risky to buy goods at high prices through e-commerce. The e-commerce trend that makes the payment process easier is the availability of payment options with a credit card-like system. Through this service, buyers can choose a special payment scheme that will divide this large bill into several smaller parts. Buyers can pay with an installment system for several months. In addition to making it easier for sellers to reach their targets, this service also makes it easier for potential buyers to shop for items of great value. The services provided by companies such as OVO Paylater, Shopee Paylater (now SPayLater), and Go-Pay Later are known to have succeeded in increasing the percentage of sales by up to 30%.
3. Online Marketplace via Google Most potential buyers who want to shop generally do a search first through Google and other search engines. These visits are either organic or non-organic (through paid advertising). The integration of e-commerce with Google Shopping will make it easier for sellers to display their products on the search start page. A study found that the presence of Google Shopping succeeded in increasing conversion rates in e-commerce by almost 17%. To do so is very easy. You just need to visit Google Merchant Center and register. If your store meets the requirements, you only need to advertise the desired product.
4. Development of Expedition Service For Indonesian e-commerce, freight forwarding services are the backbone as well as the main driver. Without a qualified delivery service, the goods you want to sell will not be able to reach the buyer easily. The increasing number of shipping service providers is also evidence of the rapid growth of e-commerce in the country. The delivery service that used to only reach big cities is now starting to expand to smaller areas. Companies just have to choose carefully which company they want to use. Another way that is also a trend for 2020 - 2021 is to attract new customers through discount promos or free shipping.
5. Popularity of Customized Products To give a more personal touch to each of their products, more and more companies are now providing personalization systems. Online sellers are starting to take advantage of the Q&A features available on social media to create products that truly match the needs and desires of each potential buyer. The sector that has benefited the most from this trend is the health sector. One example is what the Curology brand (involved in skincare) and Gainful (a company engaged in health and nutrition) did. They create customized products where each ingredient can be adjusted to the preferences and needs of the customer. The body care brand Native takes advantage of an interactive quiz feature that allows potential buyers to 'make' their own bath soap or deodorant using the scent and ingredients they want. For those of you who want to sell through e-commerce, this method can be imitated to attract more consumers.
6. Social Media Becomes a Place to Shop Before e-commerce became popular as it is now, social media was a promising platform to be used as a place to sell online. Even now, there are several groups of potential buyers who are even easier to reach through social media. Social media can also be used if the target market you want to reach is in the same city because enthusiasts generally prefer the COD payment system (because it is considered more reliable than having to pay via transfer). Today, social media has a similar function to search engines. This is supported by the number of brands and companies that post their products on social media either through Facebook, Instagram, Twitter, and so on. After searching through social media, shoppers will find a link that takes them to the product they want. Realizing the high need for shopping through social media, several online marketplace sites have prepared a built-in embedded link feature. The goal is for online merchants to directly sell products through their social media pages. The existence of this feature allows buyers who see your product posts to directly click and even make a purchase. This move has proven to be able to encourage impulse buying because people who see the ad will shop immediately as soon as they see the ad.
7. Better Shopping Experience With AR and VR Since long ago, the biggest problem faced by online merchants is the fact that the goods they sell will not be directly visible to potential buyers. If usually buyers can see, hold, and even smell the items they want, when making online purchases it is not possible to do. Buyers of items such as perfume, home furnishings, and electronic equipment generally prefer to be able to see before buying. To overcome this, AR or Augmented Reality and VR or Virtual Reality technology are used. Both of these technologies allow potential buyers to see more real and even try the goods to be purchased virtually. One company that has implemented this technology is Warby Parker. The eyewear retailer from the United States allows customers to try on the glasses they want to buy online before making a payment. Other retailers who are also taking similar steps are IKEA and the US e-commerce giant, Amazon. With this technology, potential buyers can even 'put' the furniture they want to buy virtually directly into their homes so they can get a picture of the original product. This is a step to improve customer experience that is guaranteed to bring more customers to your business.
8. COD payment system that is still the mainstay Although e-commerce is basically there to facilitate transactions, for some people the COD or Cash on Delivery system is still the best choice. This payment method on the spot when the goods have arrived is an option for those who do not have an account or people who are still not used to shopping online (people who are still worried about the transfer method of payment system). For buyers, this system is very easy. However, for online sellers, it's a good idea to consider safety and other factors before implementing them into your store.

The Best Online Marketplaces in Indonesia and Their Innovations

Every year, Indonesian e-commerce trends continue to change. The innovations created by this internet-based electronic buying and selling platform are the factors that determine their success. Through the new steps they have taken, both foreign and domestic investors are increasingly convinced to disburse fresh funds. According to data from TrendAsia, as of August 2020, here are the names of the best performing Indonesian online marketplaces. Find out more in the following list!

1. Shopee
The e-commerce platform, which first operated in Singapore five years ago, continues to show remarkable progress. Their business that has spread to various parts of Southeast Asia is getting stronger thanks to the various innovations they carry out. No wonder the average visitor to this application reaches 93 million. The ease of use of the application makes Shopee the main choice for online merchants and consumers. In addition to providing a variety of products, Shopee also often holds attractive promos such as Flash Sale, Super Deal, and discounts at certain moments. Another interesting feature that Shopee has is the innovative service from Gamifications. Users can also take advantage of various interactive games such as Shopee Tanam, Shopee Capture, Shopee Poly, and so on.
2. Tokopedia
Founded by William Tanuwijaya, Tokopedia is an e-commerce company made by Indonesian children. With the number of visits reaching 86 million per month (based on data in the second quarter of 2020), Tokopedia should not be underestimated. To attract the interest of the younger generation, including millennials and Gen X, Tokopedia is even willing to pay a high price for public figures as their brand ambassadors. One of them is by using popular stars from South Korea such as BTS. During this pandemic, Tokopedia also continues to launch a variety of new innovations. One of them is the availability of the Quick Reply feature. This feature allows sellers to reply to messages from buyers without having to bother opening the application. For sellers, the Summary Sales and Order feature is very easy. With this service, you can see a recapitulation of sales, store performance, to what obstacles were encountered during the transaction. For users, there is a Tokopedia Play feature that allows shoppers to participate in live shopping on the platform.
3. Bukalapak
With 35 million monthly active users, Bukalapak is also a genuine Indonesian e-commerce site. The company, whose main stake is held by PT Elang Mahkota Teknologi Tbk, is the company behind the popular digital wallet, DANA. Besides being known for providing a wide product selection with a trusted payment system, Bukalapak also often brings new innovations to its users. The latest is the Open Procurement service which is a solution for companies, MSMEs, and governments that need e-procurement services. This innovation allows companies to procure goods and projects in a more transparent and minimally fraudulent manner.
4. Lazada
In fourth place is Lazada, a company founded in 2012 by Rocket Internet with Pierre Poignant. With an average number of visits of 22 million every month, Lazada is now part of Alibaba after the company owned by Jack Ma provided a fresh injection of IDR 13.7 trillion. Two years later, Alibaba again provided an additional investment of IDR 27.5 trillion. This further strengthens the Chinese company as the majority shareholder. Not to be outdone by other e-commerce, Lazada also often creates various innovations. One of the steps they have taken is to make the #UpgradeUMKM movement. With this campaign, they hope to bring more MSME entrepreneurs to use their e-commerce services.
5. Blibli
With a total monthly visitor of 18.3 million, Blibli, which is a subsidiary company of the owner of the Djarum Group, is in fifth position. Funds amounting to $ 1 million dollars per year used for e-commerce development makes Blibli at the top of the online business in the country. During this pandemic, Blibli launched a variety of new services. As the only e-commerce partner with the Ministry of Agriculture, Blibli assists in the distribution of rice throughout Indonesia. They also provide a special platform where farmers can directly sell their rice harvest to consumers. The steps taken by Blibli have succeeded in bringing huge profits to the company. For the fresh food category only, the number of sellers on the platform increased 4 times in the first half of 2020.
For those of you who are struggling in the world of online business, an eCommerce website is something that you must have for the digital market era. Apart from being a means of promoting your product, the presence of a website is a value of trust for your users or customers so that your product or service brand becomes more known. The features of an eCommerce website also have an important role in attracting your users or customers, this sometimes makes the scoping process a bit complicated and lengthy. Softwareseni is here as a solution for those of you who want to create eCommerce services, both mobile apps and web apps. Softwareseni will accompany you for every process and goal, from the system to be created. Starting from the estimation process, scoping, designing, building, to adjustment to ensure that the system you will receive is a system that really fits your business needs. Softwareseni will also provide advice if you are still confused about the system you are going to build. As a software house with international standards, Softwareseni also acts as an IT consultant to help you solve such issues. With more than 150 professional staff, Softwareseni can help you build the system you really need for the progress of your business. So, don't hesitate to discuss with Softwareseni, if you have system needs for the progress of your business.