Food & Beverage Demand in Indonesian E-Commerce Soars Amid COVID-19
April 20, 2020
The COVID-19 outbreak that started affecting a single nation has now heartbreakingly spread globally. Governments all over the world have been met with differing challenges in their efforts to regain their nation’s safety from the threat of the virus spread. Many governments have regulated physical distancing measures which is currently the quickest solution to minimize the risk of a wider outbreak. The Indonesian government shares the same view as they have imposed a lockdown policy in the capital city, Jakarta, effectively since April 10th.1 Other cities around the Greater Jakarta area (Jabodetabek) soon imposed the same policy in order to take part in flattening the curve. Tangerang was regulated similarly on April 18th.2
With the lockdown policy limiting movements and constraining people to stay at home, grocery shopping for daily supplies becomes a more important but also limited activity. The usage of home supplies in houses tend to rise as more people spend their whole time being at home, making grocery shopping the single most urgent task that people need to engage with every other day. With respect to the lockdown policy, people from different countries have been opting for the more ideal option in fulfilling their needs: online grocery shopping. The outbreak seemed to have been pushing the growing demand from offline to online grocery stores or e-commerce. According to Forter Global Merchant Network, from March 23 to March 30, e-commerce marketplaces saw a 14% increase in volume.3
This is a phenomenon that occurred in the world’s patient zero, China. When China entered lockdown mode, Chinese people massively began resorting to online grocery shopping that from 140 to 150 packages daily, a courier for JD.com had about 200 packages to deliver on a day.4 A similar phenomenon is happening in Indonesia wherein the outbreak appears to be pushing more and more demand to online grocery stores or e-commerce.
This is reflected in SIRCLO's latest findings which indicate that there was a 143% increase in the number of food and beverage (F & B) orders in various marketplace platforms from February to March. Beverages such as instant drinks, carton juices, and milk experienced the highest surge in orders. Packaged food such as biscuits, condiments, and snacks came second highest.
The rising demand in Indonesia’s e-commerce is also further confirmed by data findings from a couple of Indonesia’s e-commerce platforms, Blibli and Tokopedia. Blibli came across a spike in daily supplies and personal healthcare products since the beginning of March. In a written release, their Senior Consumer Goods Key Account Manager mentioned that the products entail fresh vegetables, fruits, frozen food, cooking oil, multivitamins, supplements, and other household items.5 Tokopedia also recently released their data findings showing that the top 3 in-demand categories in March alone were health, household items, along with food & beverages. Specifically for food, the spike was most notably seen in beef, ginger, and date palm.6
Our data findings also indicate that the demand surge in the F & B category persevered even in the first two weeks of April. The total number of orders has amounted to 1.5 times more than that in February. Supported by the same data, our prediction indicates that the growth of F & B orders in e-commerce will reach 260% from February to April.
The COVID-19 outbreak has paved the way for some behavior shifts among the nations hit by it. Grocery shopping that used to be an offline adventure between store shelves is starting to shift to direct-to-door delivery. Seeing the benefits and swiftness that online shopping offers in the current outbreak, resourceful businesses across all industries should look to leveraging digital technologies to transform their businesses and enhance supply chains to meet surges in demand.
Fortunately, transforming one’s business from offline to online has been made easier with at least 3 simple ways to choose from to start selling online. Firstly, businesses can choose to have their own online store website through brand.com with ready-to-use templates by our very own SIRCLO Store. Secondly, businesses can enter multiple marketplace platforms such as Tokopedia, Blibli, Shopee, Bukalapak, and so on. Thirdly, businesses can engage in social commerce by creating a WhatsApp Business account to have direct communication with their end-customers. These services have been made simpler for more people to understand and use with the aim of uplifting their businesses’ online presence.
SIRCLO, as Indonesia’s leading e-commerce enabler, ensures the elimination of barriers to enter digital e-commerce channels. Aside from SIRCLO Store, SIRCLO also offers end-to-end channel management services through SIRCLO Commerce with the aim to strip down the entry and management process for businesses to sell online. SIRCLO Commerce caters to the whole online selling process from the phase of order processing, shipment, customer service, until order fulfillment. Businesses can fully rely on SIRCLO Commerce for the skillset and technology infrastructure needed in maximizing their online business.
Through digitalisation, innovation and agility, businesses need not come to a complete standstill in the face of what is projected to be a nationwide lockdown. When businesses optimize digital technologies with its various potentials, they not only address societal needs and expectations in the near-term, but will also enhance their development in the long-term.
We strongly believe that the online space can compensate for the limitations of offline stores especially in recent times, seeing that evidently SIRCLO clients have also experienced a rise in their online sales. It has become rapidly apparent that both businesses who just started and who have been in the online space for long are yielding the benefits firsthand. Therefore, businesses who haven't started selling online need to consider pivoting and reap the rewards, afterwards.
Disclaimer
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.