An Outlook of Indonesia’s E-Commerce: Consumer Behaviour and the Future of Retail

October 29, 2021

In the past year, Indonesia’s e-commerce industry has faced tremendous growth, making it a strong force in the country’s economic recovery following the latest COVID-19 restrictions. With the massive shift of consumer behaviour towards online shopping channels, the e-commerce industry serves as a beacon of hope for the nation’s economy to return to its stability and flourish in the years to come. 

As 2021 approaches its end, SIRCLO and Katadata Insight Center launched a research report titled “Navigating Indonesia’s E-Commerce: Omnichannel as the Future of Retail'' to prepare business owners, policymakers, and every contributing stakeholder in the e-commerce industry with the latest learnings and trends to anticipate in 2022. The report is based on a survey of 4.590 respondents, including outlooks from government officials, in-depth interviews with e-commerce players and a methodical analysis of SIRCLO’s end-users transaction data from January 2019 to May 2021. 

In this article, we have compiled a handful of our main findings, accompanied by insights from the latest e-commerce shopping festival this year; 10.10. 

Stepping into the shoes of Indonesian consumers of late

Indonesia stands as the third country with the most internet users among the APAC region, with at least 202.6 million users by January 2021. By April 2021, as many as 88.1% of those users have used and/or are using e-commerce services, resulting in e-commerce’s sky high growth from merely being an option into a necessity for people in fulfilling their needs. SIRCLO and Katadata discovered that before the pandemic, the percentage of consumers who only shop online rose from 11% to 25.5% in early 2021. Meanwhile, 74.5% of consumers who shopped hybridly before and during the pandemic indicate that they shopped online more often. 

Our research also discovered that women are apparently more active in shopping online in comparison to men. Before the pandemic, the percentage of women who are used to shopping hybridly with a higher tendency to shop online rose from 22.4% to 46.4% during the pandemic. While women transact more often in the past year, their transaction value is relatively smaller than that of men’s. This concludes that both genders are no stranger to shopping online, but have developed a certain liking towards what they check out from their shopping cart. 

Specifically for women, they mostly purchase from 3 main categories; Fashion & Accessories, Personal Care & Beauty, and Phone credit & Vouchers.  

Consumers in marketplaces: Learnings from 10.10 Festival 

This month, SIRCLO was able to capture women's favourite categories of products among the highest performing ones during the 10.10 Festival, participated by numerous marketplace platforms; Shopee, Tokopedia, Lazada, and Blibli. Beauty, Fashion & Accessories, and Personal Care made the top 3 list of high performing categories (respectively) based on the total transactions occurred. Interestingly, while not many users necessarily spent more than the average basket size of normal day purchases, there is in fact an increase in the number of total e-commerce users who shop during the festival; as reported by SIRCLO’s internal data.

The 10.10 Festival has also reinforced the activity of consumers beyond the Java-Bali provinces. Our data further indicates that throughout 2021’s double date festivals, the total transactions during the 10.10 Festival grew by 440% compared to 01.01. Moreover, in terms of order quantity, this year’s festival accounts for the highest number so far, compared to that of 2019 and 2020. Overall, there was an observable pattern among consumers located outside the Java-Bali provinces; their purchases tend to be in small quantities, but their basket size is typically larger than that of consumers located in Java-Bali.

For the most part, there are notable learnings to glean from the double date festival days which various marketplaces organise on their platforms. These special days, in addition to the ones held during the payday of most Indonesian workers (25th to 28th of each month), have proven to be of great momentum to boost brands’ sales performances. 

Consumers’ enthusiasm in shopping through marketplaces is apparently not simply seen during the festival buzz; but has entirely shaped their shopping channel preferences in general. SIRCLO and Katadata’s survey found that 86.5% of consumers from our survey choose marketplaces as their favourite shopping platform, compared to social media platforms (36.9%) and product websites (8%).

The main factors underlying this preference include the store’s verification by marketplaces (62.3%), the availability of reviews from previous shoppers (56.8%), and lower price points of products on the platform (45.3%). That being said, stores with verification suchlike E-commerce Malls and Official Stores categories often become the consumers’ main choice when shopping, as those stores are deemed more trustworthy. 

A Glimpse into the Omnichannel Future

Gathering from extensive research and the outlooks of multiple e-commerce players, it’s clear that Indonesia’s accelerated e-commerce industry is well on its way to support the country’s economic recovery and even boost it when the pandemic subsides. The government is in the works of providing more reliable and widespread technology infrastructure to give equal internet access to all parts of Indonesia. Connectivity and the open digital borders of our country make a great avenue for business owners across all scales to uplift their skills, be as creative as they can be, optimise their strategies, and just keep leaping forward with productivity. 

Easy, quick, and personalised e-commerce shopping experiences are already the consumers’ expectations of today, among many others. In the coming year, it’s very likely that a seamless shopping experience across multiple channels—online and offline—will enter that same list of expectations. SIRCLO and Katadata’s findings show that 74.5% of consumers continued to shop hybridly during the pandemic. When the nation finally wins the battle against the COVID-19 virus and public spaces will fully rebound, the same hybrid model is expected to proceed.

In short, brands that are operating in the Indonesian market need to brace the shifts in consumer behaviour, expectations, and demands in the long run. This is where the omnichannel strategy becomes the hero of the hour; seamless shopping experiences are inherently what the strategy can realise, on top of the integration of all shopping touchpoints and the constant connectivity of consumers towards it. In doing so, brands can opt for a solution that is equipped with a comprehensive ecosystem setup and leave it to the enablers. By trusting an e-commerce enabler’s integrated system in the brand’s pursuit of omnipresence, brand owners can instead focus on developing their product and brand value.

Download SIRCLO’s 2021 E-Commerce Report in collaboration with Katadata Insight Center here

Watch the virtual panel discussion session about the report’s main insights and perspectives beyond, featuring SIRCLO’s CEO and Founder Brian Marshal; SIRCLO’s Commissioner and Head of Indonesian Creative Economy Agency (2015-2019) Triawan Munaf; Assistant Deputy for Digital Economy of the Coordinating Ministry for Economic Affairs Rizal Edwin Manansang, and Head of Katadata Insight Center Adek Media Roza, by visiting the on-demand video here (in Bahasa Indonesia). 


SIRCLO neither provides regulated advice nor guarantee results. The materials we convey reflect general insight and best practice based on information currently available, and do not contain all of the information needed to determine a future course of action. Such information has not been generated or independently verified by SIRCLO and is inherently uncertain and subject to change. SIRCLO has no obligation to update these materials and makes no representation or warranty and expressly disclaims any liability with respect thereto.