Indonesia’s e-commerce market is forecast to grow at a compound annual growth rate of 31.1% to reach $3.8 billion by 2019.
Research analyst firm Frost & Sullivan said this is mainly due to “positive demographics profile, robust economic growth, high mobile adoption and a large number of e-commerce players offering a wide variety of products online to Indonesian consumers.”
Spike Choo, Country Director of Frost & Sullivan Indonesia, said poor logistics infrastructure and inaccessibility of banking services are some of the key challenges that still need additional investment and time before e-commerce can truly take off in the country.
While cash is still the predominant payment mode for the offline transaction, he noted that both credit and debit cards and e-money transactions will continue to grow steadily as a result of a continuous push by banks and telecom Providers to drive end-user adoption.
As a result, he predicts that online transaction will overtake cash-on-delivery as the default payment mode of choice for Indonesians.