Big profit in e-commerce business

E-commerce business in the world is increasingly promising. In the midst of a pandemic, this digital-based trading business is even projected to grow 33.2 percent from 2020 which reached IDR 253 trillion to IDR 337 trillion this year.

Especially when viewed from the perspective of consumer behavior, in all online-based trade lines, the trend for digital-based transactions has increased as people spend more time at home during the pandemic. In addition, the existence of increasingly established technology accompanied by easier and faster transaction speeds greatly helps accelerate this type of digital business.

A report released in October 2020 by Google, Temasek and Bain & Company regarding the 2020 e-Conomy stated that the time it took for people to enter online trading platforms during the pandemic was from 3.7 hours/day to 4.7 hours/ the day when the lockdown occurred and became 4.2 hours/day after the lockdown ended. From this description, it is only natural that Bank Indonesia dares to project e-commerce transactions to Rp 337 trillion this year. An increase of 33.2 percent compared to 2020 transactions of IDR 253 trillion.

According to BI Governor Perry Warjiyo, the factor accelerating digital economic transactions this year is because the Covid-19 pandemic has not yet subsided. "Last year's e-commerce business was estimated at IDR 253 trillion, an increase from 2019 to IDR 205.5 trillion. Then this year it increased to IDR 337 trillion," Perry explained in a virtual discussion.

The increase in the number of transactions through e-commerce, said Perry, was inseparable from government policies in encouraging digital acceptance for the public, as well as continuing to accelerate the development of fintech and digital banking.

From Bank Indonesia's records, not only e-commerce-based businesses have increased. The use of electronic money has increased by 32.3 percent or the equivalent of IDR 266 trillion this year. In 2020, the central bank estimates that the use of electronic money will reach IDR 201 trillion.

 

Continues to grow

BI even predicts that the digitalization trend will continue to grow rapidly. This is also reflected in the projected digital banking transactions in 2021 which will increase to around IDR 32,206 trillion, growing 19.1% from the projected realization of digital banking transactions last year which reached IDR 27,036 trillion.

It's true, e-commerce is the driving force of a digital-based economy. The high growth of e-commerce in Indonesia is clearly also heavily influenced by the Covid-19 pandemic.

Even though there is the implementation of the Large-Scale Social Restrictions (PSBB) policy, the enactment of micro-scale-based community activity restrictions (PPKM micro) has not discouraged consumers in this country from making buying and selling trade transactions and shopping for necessities online.

So, what do consumers buy through e-commerce platforms? A survey conducted by Google, Temasek and Bain & Company said that consumers mostly buy electronic products, clothing, products related to beauty or food ingredients and health products.

Interesting and worthy of support by the statement from the Minister of National Development Planning/Head of Bappenas Suharso Monoarfa. According to him, social restrictions - from PSBB to micro PPKM - apart from reducing the rate of transmission of Covid-19, have also spurred digitalization. One of them is the increase in e-commerce business.

Suharso said the annual growth of e-commerce sales reached 15.4 percent. In fact, e-commerce gross merchandise value (GMV) sales rose 54 percent from USD 21 billion in 2019 to USD 32 billion (or equivalent to IDR 266.3 trillion) and will continue to increase to USD 83 billion in 2025.

On one occasion, the chairman of the Indonesian E-Commerce Association (idEA) Bima Laga agreed with the Minister of National Development Planning/Bappenas. "Indonesia's e-commerce growth will not be far from those predictions. This means that in 2021 the trend will continue to grow.”

From the description above, this nation has the opportunity to work on a wider digital-based business. Armed with its demographic advantages, Indonesia should no longer be just a foreign market target, but a fertile ground for qualified e-commerce entrepreneurs, or even become a world-class player.