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INDUSTRY STUDY: ECOMMERCE IN INDONESIA AND HOW TOKOPEDIA BOOSTS FIRST TIME
CONVERSIONS BY 20%

By Akshatha Kamath
 * UPDATED: 11 July 2023
 * 5 min read


Reading Time: 5 minutes



  👉  Download Report – E-commerce App Retention Trends India [2020]



👉  Download Report – E-Commerce App Retention Rates in SEA

👉  Download Holiday Marketing Guide – Get holiday trends of 2020 across
verticals and geographies along with actionable strategies and use cases from
top global brands and industry leaders

👉  Interactive Growth Framework Quiz – Learn how to scale and build a Growth
program with this interactive quiz

Indonesia’s eCommerce market is booming. These statistics will give you a broad
picture of this country’s growth story:

 * The eCommerce market in Indonesia is poised to grow at a CAGR of 9.3% and
   will be valued at $16,338 million by 2023. – Statista
 * The Gross Merchandise Volume(GMV) for online transactions is predicted to
   reach $130 billion by 2020.  – Bank Indonesia
 * The country added 11 million new online shoppers in 2017, while another
   survey of 1000 urban consumers showed a 63% increase in shoppers buying
   products online at least once a month. – FT Confidential
 * Significant investments by eCommerce giants like Alibaba($1.1 billion in
   Tokopedia), Amazon($600 million in its Indonesian operations).  –
   Entrepreneur


WHAT MAKES INDONESIA A HOTBED FOR THE ECOMMERCE INDUSTRY?

Economy: With over 261.12 million population and a GDP per capita expected to
reach 5,790 USD by 2022, Indonesia’s middle-class population is expanding. Over
31.65 million users are shopping online. Statista predicts the number of users
to grow to 43.89 million by 2022 and the average online spends to go up to 375
million USD.



Source: eshopworld

Internet penetration: Internet access is believed to be a significant
contributor to the flourishing eCommerce industry in Indonesia. Internet
penetration is high in Indonesia—42.1% of the population has access to it. The
number will further grow up to 49.9% by 2022.

Device usage: Smartphone usage is low—less than 26% of the population uses them.
However, despite the low usage, over 55% of online shoppers in Indonesia rely on
mobile phones for shopping.

The improved economy combined with internet penetration and mobile revolution
has contributed to the growth story of Indonesia’s eCommerce industry.

However, no growth story is complete without challenges. Indonesia is still a
growing economy and has many hurdles to surpass in the coming years.


CHALLENGES OF INDONESIA’S ECOMMERCE INDUSTRY

There are many reasons why eCommerce brands in Indonesia cannot expand their
reach to the fullest.

Logistics: Jack Ma observes Indonesia’s eCommerce industry closely and cites the
lack of suitable infrastructure as a primary challenge for the growth of the
sector. Consumers in Indonesia live across 17,000 islands that span over 50,000
kilometers from east to west. This acts as a bottleneck for the supply chain of
the business resulting in increased wait time and also impacts the final
shipping cost of products.

Slow internet connectivity: Despite high internet penetration, internet
connectivity is slow in Indonesia when compared to other Asian countries such as
Singapore, Vietnam, Malaysia, and the Philippines.

Payment methods: As per a study, 80.7% of netizens prefer to pay through
bank-transfer when they shop online. However, there are just 36% of citizens who
have a legitimate bank account. A low financial literacy rate is also a leading
cause for the slow adoption of a cashless economy.

Trust: If there is one thing that acts as a major barrier to eCommerce growth,
it is trust. Though marketplace websites are gaining prominence, consumers
prefer to have direct communication with sellers on a peer-to-peer network such
as Facebook as it is more personal and warm. Sellers are aware of this
preference and engage with their customers on social network websites instead of
online marketplaces.

Also, take a look at the user retention benchmarks for e-commerce apps in 2019
and see how your app fares.




IMPROVE TRUST AND RETAIN MORE CUSTOMERS LIKE TOKOPEDIA DID

As an eCommerce marketer, logistics and government regulations might be outside
your purview. However, you can engage and win more customers with a sprinkle of
personalization in your customer’s purchase journey—just like Tokopedia did.
Tokopedia, Indonesia’s largest online marketplace leverages our platform to
improve app user retention by 60% and grow its first conversion transaction by
20%.

The eCommerce app adoption is slow in Indonesia. As a result, 60% of customers
that installed Tokopedia’s app, uninstalled it within the first month. Tokopedia
realized the need to create a 1:1 personalized experience for new app users to
engage and encourage them to make the first purchase.

The brand identified the various stages in the customer onboarding journey where
they could send the right messages to eliminate ambiguity in communication, and
leveraged MoEngage Omnichannel Flows to create a series of integrated
cross-channel campaigns. They targeted users through various channels including
push notifications, emails, SMS, and retargeting with personalized messages.

Take a look at the onboarding flow diagram:



With a robust workflow in place, Tokopedia was able to guide customers from
installation to first purchase and grow the number of active shoppers on their
app.



> Customer journeys are increasingly becoming more dynamic and interconnected in
> nature. For brands to win, they must take cognizance of this paradigm and
> adapt their marketing tactics. MoEngage helps us seamlessly integrate both
> marketing and ad technologies to deliver a unique customer experience while
> delivering the optimal messaging experience to the users. – Holy Theodore,
> Senior Digital Marketing Strategist, Tokopedia

For an eCommerce company, personalized customer experiences and winning the
trust of customers is crucial today more than ever, and marketing automation
platforms like MoEngage can help you achieve that.



 

Related Stories – 



 * App Retention: Benchmarks, Strategies, and Best Practices (With Infographics
   and Videos)
 * Industry Study: Fintech in Indonesia and How Kredivo Boosts Conversions by
   40%
 * 7 Ways to Improve Customer Experience for Your eCommerce Website
 * Mobile First Indonesia: Challenges and Opportunities
 * Industry Study: How OTAs in Indonesia Are Using Personalization to Reduce
   Churn

about the author
Akshatha Kamath


Akshatha Kamath leads content marketing at MoEngage. She's one of "LinkedIn
Content 50", has been recently featured on the list of "The Most Influential
Content Marketing Professional" by World Marketing Congress and is among the
“100 Fastest Growing Marketers” identified by Adobe. She is a content marketing
specialist with close to 12 years of experience in writing, strategizing, and
managing content for various organizations. Before MoEngage, she’s steered
content marketing teams for companies like Simplilearn, Vizury, and Conzerv
helping them with content, brand, and communication strategies that are aligned
with their business goals. Akshatha volunteers with AMA SF as a writer. She is
also a published author with publications such as Clickz, Digital Market Asia,
Get Elastic, and e27. She is an avid reader and a traveler who enjoys
experiencing the flavors of life in different places.




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