Indonesia’s e-commerce industry holds major promise, says Lazada
Indonesia’s vast consumer market and high penetration of internet users have created the right cocktail for rapid e-commerce growth, says Lazada
Lazada, one of the largest e-commerce platforms in Southeast Asia, is expecting online sales in Indonesia to experience one of the highest growth rates in the next few years owing to the country’s high penetration rate of internet users and demand from a huge number of potential customers.
“China’s e-commerce market is approximately 15 to 20 years ahead of that in Indonesia, so the country holds huge growth potential,” said Duri Granziol, co-chief executive of Lazada Indonesia.
As China has “better roads and highways”, as well as other infrastructure facilities compared to countries in Southeast Asia, a comprehensive e-commerce ecosystem similar to that in China has just started to emerge in this region, said Granziol.
Although Southeast Asia is a fragmented e-commerce market with a low percentage of e-commerce activity compared to total retail sales, growth in broadband and mobile connectivity combined with consumer openness to online retail buying means there is huge potential, according to consulting firm Research and Markets.
Major players in the region include Lazada and Singapore-based Sea, backed Shopee, both of which have been competing head-to-head in the e-commerce market.
In 2016, Lazada saw its gross merchandise value reached US$1.3 billion, which was slightly ahead of Shopee’s US $1.2 billion, according to Bloomberg.
“Lazada and Shopee may continue to battle for share most heavily in Indonesia, where they both have a large presence,” Matthew Kanterman, an industry analyst at Bloomberg Intelligence wrote in a recent note.