Indonesia's e-commerce market to grow by 15.5% in 2024

It was driven by increased internet and smartphone use, rising incomes, and secure online payment options.

Indonesia's e-commerce market is on track for a 15.5% surge in 2024, driven by a shift towards online shopping, according to GlobalData.

The market saw an 18.3% rise in 2023, hitting $37.6b (IDR573t), with projections to reach $43.4b (IDR661.9t) this year.

According to Poornima Chinta, Senior Banking and Payments Analyst at GlobalData, factors such as increased internet and smartphone use, rising incomes, and secure online payment options are fueling this growth. 

Additionally, annual online shopping events like Black Friday, Cyber Monday, and Single's Day have bolstered e-commerce activity in the country.

The growth extends beyond major cities, with tier 2 and tier 3 cities experiencing significant e-commerce adoption, aided by improved digital infrastructure and logistics.

The National Online Shopping Day (Harbolnas), organised by the Ministry of Trade and the Indonesian E-Commerce Association (idEA), also boosts sales annually. In 2023, sales during Harbolnas surged by 13% YoY to $1.7b (IDR25.7t).

Moreover, alternative payment solutions also dominate the e-commerce landscape, capturing 42.4% of the market share in 2023, led by platforms like OVO, Go Pay, and Dana.

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Bank transfers follow closely, accounting for 30.2% of total transactions, whilst cards, both credit, and debit, represent 17.4%. 

However, cash transactions still persist, constituting over 10% of e-commerce purchases, particularly amongst unbanked and rural populations.

Looking ahead, GlobalData projects a continued growth trajectory, with a compound annual growth rate of 12.4% expected between 2024 and 2028. 

“Alternative payment solutions are expected to continue their lead driven by growing preference for fast and convenient payments solutions among the younger demographics,” said Chinta.