Indonesia remains a burgeoning e-commerce market in Asia-Pacific. In 2020, the Southeast Asian nation recorded all-time high for e-commerce sales growth for the twelve-month period, registering a revenue of approximately US$33 billion, up 61 percent in 2019.
Major factors behind Indonesia’s e-commerce growth include improving internet penetration, increasing digitalisation and the opening of new localised e-commerce platforms in the region. The trend has also been fuelled by the recent social restrictions and temporary store closures as a result of the global Covid-19 pandemic, forcing more consumers to shop online.
Last year, the archipelago nation was the eleventh largest market for e-commerce sales in gross merchandise value terms globally, placing it ahead of Russia and behind Australia, according to research firm Statista.
In 2020, online sales accounted for 20 percent of Indonesia’s total retail sales, with the Southeast Asian nation’s total retail sales topping US$129 billion, according to a Momentum Works report.
There are currently 158 million e-commerce users in Indonesia, with an additional 63 million expected to take up online shopping during 2021, according to research firm, ESW.
These 221 million e-commerce users will represent 77 percent of the total population by year-end, with the average user spending US$240 online, which will grow to US$254 by 2025, added ESW.
Up close fashion remained the largest online segment in Indonesia and accounted for 30 percent of e-commerce revenues, followed by electronics and media at 24 percent; food and personal care at 16 percent; toys and hobbies at 15 percent; and furniture and appliances at 14 percent, added Statista.
According to GlobalData, Indonesia’s e-commerce sales are projected to increase at a compound annual growth rate of 19.2 percent between 2020 and 2024, to reach US$51 billion in 2024.
“Online shopping is gradually becoming mainstream in Indonesia with more consumers preferring due to the convenience it offers,” said Kartik Challa, Banking and Payments Senior Analyst at GlobalData.
“This shift became even more prevalent during the Covid-19 pandemic with strict lockdown and social distancing rules being in place,” continued Challa.
In recent years, Indonesia has produced the greatest number of billion-dollar tech startups in Southeast Asia – including e-commerce heavyweight, Tokopedia. Not forgetting the many international marketplaces – China’s JD.com and Singapore’s Shopee – capitalising on the ever-increasing digitalisation of Indonesia’s retail
Aside from Indonesia’s major e-commerce players, there are several lesser-known Indonesian e-commerce firms leaving a distinct mark in 2021. Each have inked serious funding rounds thanks to major investor groups in recent years, with one successfully raising US$1.5 billion in August to become Indonesia’s biggest IPO to-date. All are staged for growth in the coming years, positioning them as serious competitor platforms, and ones to watch in Indonesia’s ever-growing e-commerce market.
Launched in 2014, Happy Fresh was co- founded by Fajar- Budiprasetyo, Benjamin Koellmann, and Markus Bihler as an American-style Instacart e-commerce platform delivering groceries across Southeast Asia.
Kicking off with a US$12 million fundraising effort within its first-year operations, Happy Fresh then raised an undisclosed Series B funding round amount one year later, where it announced it would pull out of the Philippines and Taiwan markets, to focus on its native Indonesia, as well as Malaysia and Thailand.
In a bid to become more financially sustainable, the on-demand grocery platform then hired a new CEO in 2017, welcoming Guillem Segarra to the top spot. In 2019, HappyFresh raised Series C funding worth US$20 million, led by the Mirae Asset-Naver Asia Growth Fund.
Last month, HappyFresh raised US$65 million in a Series D funding round. Looking ahead, the grocery platform plans to use the funds to expand to more cities in Indonesia, extending beyond main regions such as Jakarta and Bali, where it is currently present.
HappyFresh said traffic in 2020 grew by factors of 10-20 times, largely due to the pandemic and an increase in online shopping.
Founded in 2010, Bukalapak is an online marketplace that enables small and medium enterprises to go online. In the last 11 years, it has expanded to support smaller traditional family-owned businesses, also known and ‘mom-and-pop’ stores.
In 2020, Bukalapak posted revenues of US$95.8 million and counted 104.9 million registered users on its platform.
Forging its way forward to an IPO in 2021, the online marketplace surged on its first day of trading on August 6, successfully raising US$1.5 billion, making it Indonesia’s biggest initial public offering to-date. Shares jumped 25 percent from its initial price offer of US$0.06 in Jakarta, putting its value at US$7.64 billion, as reported by Bloomberg.
Looking forward, Bukalapak’s gross merchandise value is expected reach US$12 billion next year from an estimated US$9 billion in 2021, according to analysts. The company expects to be profitable within the next three years, it said.
Founded in 2013, Sirclo provides solutions to businesses selling online. The Sirclo offering is two pronged and includes: Sirclo Store, a SaaS platform that helps create online shop sites for small and medium-sized enterprises; and Sirclo Commerce, which helps corporate brands with online distribution channels.
In 2019, Sirclo inked US$5 million in a Series A funding round backed by Skystar Capital, East Ventures, Sinar Mas Land and Beenos Plaza. This was surpassed by a US$6 million Series B Funding round in 2020 from East Ventures, OCBC NISP Ventura, Skystar Capital, Sinar Mas Land, which Sirclo said would strengthen its position through the pandemic.
In 2020, Sirclo went on to merge with rival e-commerce enabler ICUBE, which specialises in medium-size enterprise, bolstering its reach in the e-commerce solutions market.
Most recently in April, Sirclo in acquired Orami, the largest parenting platform in Indonesia, in a deal designed to expand the online solutions provider’s consumer reach, while strengthening the parent platform’s e-commerce capabilities.
Founded in early 2020 by e-commerce veterans Nipun Mehra, Alan Wong and Derry Sakti, Ula operates a wholesale e-commerce marketplace to help small store owners stock just the inventory they need, with the addition of granting them with working capital.
Five months into its launch, Ula – which operates largely in the FMCG and food and vegetable spaces – inked US$10.5 million in a series funding round, led by Sequoia India and Lightspeed India, to grow its business in the Southeast Asian market.
One year later, Ula accrued another $20 million in a Series A funding round, in a Series A financing round led by existing investor Quona Capital and B Capital Group, to expand its e-commerce platform across Indonesia, announcing it had hit 20,000 local sellers.
Looking ahead, Ula plans to use its recently acquired capital to reach more small retailers and expand within the nation, with Indonesia remaining the e-commerce start-up’s focus market.
Founded in 2019 by Stevensang, GudandAda is a Jakarta-based marketplace that brings wholesalers closer to retail stores and other buyers. In addition to helping optimise inventory turnover to increase working capital for businesses on the platform, GudangAda provides market research and data for products and gives retailers a
vast selection of goods.
GudangAda partners with third-party vehicle and warehouse providers to reach across Indonesia, while keeping costs down.
For its logistics partners, it provides transportation and warehouse management systems to help them digitise their operations. To-date, the start-up has raised some US$135 million dollars, inking a Series B funding round of more than $100 million in July this year, led by Asia Partners and Falcon Edge, with participation from Sequoia Capital India, Alpha JWC and Wavemaker Partners.
GudangAda – which retails fast-moving consumer goods, pharmaceuticals, packaging, homeware and stationery – is today used by half a million small-to-medium enterprises and reaches 500 cities across Indonesia. Looking ahead, it plans to expand into more product categories and invest in AI technology.