Asia Pacific’s Social Butterfly: Is Indonesia Ready for Social Commerce?

Indonesia’s large internet population and high social media engagement has made it an excellent market for rapid expansion in the social commerce sector. Despite low digital payments penetration and logistical challenges, Indonesia is still poised to expand its eCommerce market through a consumer demographic active on social media and a fast evolving B2B support sector aimed at turning the country into one of the most lucrative digital economies in the Asia Pacific region.

Indonesia is quickly transitioning from a vibrant and vocal community of internet users into one of the fastest growing digital economies in Asia. With over 73 million internet users in a country of 250 million people, Indonesia’s internet population size is fourth worldwide after China, India and Japan.

This continued adoption of the internet has spread well beyond conventional computer screens as users take to their mobile devices. Smartphone penetration in the country has doubled from 12% to 24% from 2012 to 2013 and is expected to approach the 30% mark by the end of 2014.

While Indonesia’s internet penetration of 29% is lower than Asia’s regional average of 33%, the sheer size of the country’s internet population makes it a viable market for online growth. Market research company Statista predicts Indonesia’s internet population to steadily increase to 93.4 million users by 2015, ramping up to over 120 million by 2018. As internet users continue to boom, so will the country’s adoption of online shopping, with sales projected to grow as high as $10 billion USD by 2015, a substantial increase from 2014’s current estimate of $1 to $3 billion USD.

Indonesians are also highly connected in the social space. A majority of Indonesian internet users spend most of their time on Facebook and Twitter, with Facebook users climbing to 69 million and Twitter users numbering close to 20 million in 2014. Social sites like Facebook and Twitter’s experimentation of new ways to enable business transactions on their platforms, combined with Indonesia’s fixation on social media, makes the country ripe for social commerce growth.