When it comes to cross-border e-commerce, markets such as China and South Korea often come to mind first. However, Indonesia stands out as one of the most attractive markets in Southeast Asia.

In terms of sheer market size, Indonesia surpasses Thailand and Vietnam, making it the largest in the region. Various market studies also indicate that Indonesia’s e-commerce sector is set to expand further in the coming years.

For businesses looking to enter this promising market, understanding Indonesia’s internet penetration rate, e-commerce market trends, and the key players—both e-commerce marketplaces and ASP (Application Service Provider) platforms—is essential for building a successful cross-border e-commerce strategy.

All currency conversions in this article are based on the exchange rate as of March 2, 2024 (1 USD = 15,625 Rupiah).

E-Commerce Usage in Indonesia

Internet Penetration Rate in Indonesia

Reference：databoks「Pengguna Internet di Indonesia Tembus 213 Juta Orang hingga Awal 2023」

The number of internet users in Indonesia has been growing rapidly. As of 2023, the country has over 210 million internet users, with a penetration rate of 77%. According to data from Japan’s Ministry of Internal Affairs and Communications, Japan’s internet penetration rate stands at 84.9%. This indicates that Indonesia’s internet usage is approaching levels like that of Japan.

Like Japan, Indonesia sees higher internet usage via smartphones compared to personal computers. While iPhones are not as widely adopted as in Japan, the prevalence of affordable Chinese-made smartphones has contributed to widespread mobile internet access.

A walk-through Jakarta easily reveals this trend—many people can be seen making calls, chatting, or streaming videos on their smartphones.

Trends in Indonesia’s E-Commerce Market Size

Reference：Data Indonesia.id「Transaksi e-Commerce RI Tak Capai Target pada 2022」

As shown in the data, Indonesia’s domestic e-commerce market has been experiencing rapid growth. A major factor behind this surge is likely the COVID-19 pandemic.

Following the outbreak in 2020, Indonesia implemented Large-Scale Social Restrictions (PSBB) to curb the spread of infections. These measures included restrictions on commuting to work and reduced business operating hours. As a result, people spent more time at home, leading to a significant increase in e-commerce transactions.

E-Commerce Marketplaces in Indonesia

	Shopee	Tokopedia	Lazada	Bukalapak	TikTok Shop	Blibli
Gross Merchandise Value (GMV) of Major E-Commerce Platforms in Indonesia	280 trillion IDR（$17.92 billion USD）	278 trillion IDR（$17.79 billion USD）	75 trillion IDR（$4.8 billion USD）	75 trillion IDR（$4.8 billion USD）	40 trillion IDR（$2.56 billion USD）	30 trillion IDR（$1.92 billion USD）

Indonesia’s e-commerce market is highly competitive, with numerous platforms vying for market share. However, the industry is gradually consolidating around the key players listed above.

Shopee

Originally, Shopee was a major e-commerce company targeting the entire Southeast Asian region. However, through aggressive promotional strategies in local shopping malls and frequent discount events, Shopee has rapidly expanded its market share in Indonesia over the past few years.

A Single Account for Greater Convenience

Shopee offers its own digital payment system, “Shopee Pay,” as well as a food delivery service, “Shopee Food.” Once registered, users can leverage Shopee for a variety of services beyond just online shopping, enhancing overall convenience.

Low Fees for Sellers

Shopee provides a cost-effective platform for sellers, with:

• Sales commission: 3% of total revenue
• Payment processing fee: 2% of total revenue

Compared to other e-commerce marketplaces, Shopee’s relatively low fees allow businesses to enter the market with minimal risk.

Tokopedia

Founded in 2009, Tokopedia has grown into one of Indonesia’s most prominent e-commerce platforms. In 2014, the company secured funding from SoftBank Group, and in 2018, it received investment from Alibaba, further strengthening its position in the market.

A Vast Number of Stores

Tokopedia is home to many small and medium-sized businesses, as well as individual sellers. As of 2022, the platform hosts approximately 12 million registered stores, offering a diverse range of products, from daily necessities and electronics to food items and more.

Finance and Ticket Booking Services

Beyond e-commerce, Tokopedia also provides financial services, allowing users to apply for insurance and mutual funds directly through the platform. Additionally, it offers flight ticket purchases, hotel reservations, and movie ticket bookings, making it a convenient, all-in-one platform for various consumer needs.

Lazada

Founded in 2012, Lazada became a subsidiary of Alibaba in 2016. Headquartered in Singapore, the company has expanded its presence across Malaysia, the Philippines, and other Southeast Asian countries.

Strong in Cross-Border E-Commerce

Lazada enables businesses to sell internationally without the need to store inventory in Indonesia. Even when shipping directly from Japan, products typically arrive within 1–2 weeks. Additionally, Lazada offers comprehensive support, including Japanese-language assistance, making it easier for sellers to navigate the platform.

Multi-Country E-Commerce Expansion

With a single product listing, sellers can reach six Southeast Asian countries. If the product description is written in English, Lazada’s system automatically translates it into local languages. Additionally, currency conversions are adjusted based on the destination country, streamlining the process for businesses looking to expand across the region.

Bukalapak

Established in 2010, Bukalapak received Alibaba’s investment in 2018, similar to Tokopedia. While it ranks behind Shopee and Tokopedia, it remains one of Indonesia’s most recognized e-commerce platforms.

Unique Product Selection

Bukalapak offers a wide range of clothing, food, and daily necessities, but what sets it apart is its availability of motorcycles, cars, and other unique products. Additionally, the platform allows users to engage in investment, borrowing, and Indonesia’s common gold savings schemes, making it more than just a marketplace.

Bill Payments and Financial Services

With Bukalapak, users can conveniently pay for utility bills, loans, and other expenses 24/7. The platform integrates with major e-wallets like OVO and DANA, allowing customers to use their preferred payment methods seamlessly.

TikTok Shop

Although TikTok Shop temporarily suspended operations in Indonesia, it re-entered the e-commerce market by acquiring a 75% stake in Tokopedia. Following this acquisition, the platform was rebranded as Shop Tokopedia.

TikTok is rapidly gaining popularity in Indonesia, and Shop Tokopedia benefits from TikTok’s vast user base. By integrating social media with e-commerce, the platform allows businesses to directly reach active TikTok users, making it a powerful tool for social commerce.

Blibli

Established in 2011, Blibli offers not only online shopping but also payment services for public transportation fees. Additionally, it operates Blibli Travel, a service specializing in travel-related products. Through this platform, users can conveniently book hotels and transportation tickets online.

E-Commerce ASPs in Indonesia

Indonesia has its own Application Service Provider (ASP) platforms, similar to Shopify or BASE, which are gaining popularity in Japan. However, compared to selling through major e-commerce marketplaces or directly via social media, the use of ASPs for e-commerce is still relatively underdeveloped in Indonesia.

	Shopify	zyro	webflow
Pricing	Rp 400,000/month (=$25.60)	Rp 39,000/month  (=$2.50)	USD 29/month (=$29.00)
Usability	◎	△	◯
Design	◎	△	△

Shopify

Shopify is widely popular in Japan, and its user-friendly interface has made it one of the most preferred ASP platforms in Indonesia as well. The platform offers mobile-friendly designs, a variety of customizable templates, and seamless integration with Facebook and Instagram, making it an excellent choice for businesses looking to expand their online presence.

Zyro

Zyro’s biggest advantage is its low cost, starting at Rp 39,000 (~$2.50) per month. It allows sellers to expand their business to Facebook, Instagram, and Amazon. However, the platform does not support Japanese, so users need to be proficient in English or Indonesian to operate it effectively.

Webflow

Webflow offers a wide range of design templates and seamless integration with other no-code tools, making it a versatile choice. It is designed for users who want more control over their website’s design and functionality while still maintaining ease of use. Additionally, Webflow provides various content creation features, including blogs, and supports a variety of plugins for enhanced functionality.

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Company Formation in Indonesia

E-Commerce Sales via Social Media

Instagram

The purchasing process on Instagram typically follows these steps:

1. Choose a product from the store’s Instagram feed.
2. Contact the seller via the method provided in the bio or through direct messages (DMs).
3. Confirm product availability with the seller.
4. Fill out the purchase form.
5. Receive the total payment amount.
6. Make the payment via bank transfer or cash on delivery (COD).
   • COD: The seller provides a receipt and tracking number.
   • Bank Transfer: The buyer transfers the payment and sends proof of transaction.

Facebook

The process on Facebook is similar but differs in product selection:

1. Buyers select products from Facebook Groups where sellers post listings.
2. Interested buyers comment on the product post.
3. The seller responds and moves the conversation to DMs or WhatsApp.
4. The rest of the process follows the Instagram model.

Benefits of Selling via Social Media

From a buyer’s perspective, isn’t the biggest advantage of purchasing something from social media rather than an EC mall the ability to “interact directly with the store (seller)”? While each EC mall has chat functions, sometimes there are no replies or conversations progress very slowly.

On the other hand, if you inquire directly through social media, you can get responses with higher probability and more quickly. You can also judge whether the store is trustworthy by observing how they respond. You can avoid common troubles that occur when shopping through Indonesian EC malls, such as “the order was canceled due to being out of stock.”

The advantage of “being able to interact directly with the store” is particularly valued when purchasing products that require “special requests.”

For example:

• Custom-made clothes or cakes
• Made-to-order furniture
• Gifts that you want personalized or accompanied by a message
• Orders where you want to specify the shipping date… and so on.

Comment and DM functions on Instagram and Facebook, as well as chat apps like WhatsApp, are convenient and reassuring when you want to place such orders.

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Popular Product Categories in Indonesia’s E-Commerce Market

To understand which products perform well in Indonesia’s e-commerce sector, we analyzed top-selling items on Shopee and Tokopedia—the country’s leading online marketplaces.

When rearranging the above graph, it results in the table below.

Each e-commerce platform has its own unique characteristics, and the user demographics also differ slightly. Therefore, it is crucial to carefully consider which platform is best suited for selling your products.

For example, Shopee is particularly popular for fashion items and beauty products—categories related to personal styling and self-care. On the other hand, while Tokopedia also sees strong demand for fashion, it has a broader appeal for everyday essentials such as health and hygiene products, as well as groceries and other consumables.

Conclusion

Like in Japan, e-commerce transactions in Indonesia have surged, partly due to the impact of the COVID-19 pandemic. Given the expected growth of Indonesia’s e-commerce market, many Japanese companies are considering entering this promising market.

Recently, we have seen a growing number of inquiries from such companies, and we have had numerous opportunities to support them in their expansion efforts, working closely with them every step of the way.

Before deciding whether to enter the Indonesian market, it is essential to assess its potential for your business. We encourage you to reach out to us for insights and market information to help you make an informed decision.