Indonesia’s Digital Economy Biggest in Southeast Asia during Pandemic

JAKARTA, KOMPAS.com – Indonesia’s digital economy is expected to reach $44 billion in 2020 or up 11 percent during the coronavirus pandemic.

E-commerce in Indonesia combined with online media have particularly contributed to this massive growth trend as mentioned in the e-Conomy SEA Report by Google, Temasek, and Bain & Company.

The report offers a highly optimistic outlook for Indonesia’s digital economy as it is projected to be valued at $124 billion in 2025.

“Last year, the country’s digital economy was valued at $40 billion and this year, it is expected to reach to $44 billion indicating double-digit growth of 11 percent despite the pandemic,” said Google Indonesia Managing Director Randy Jusuf.

Read also: Pandemic is Opportune Time for Digital Start-Ups in Indonesia

The feat demonstrates the resilience of the nation’s digital economy which has also earned it the reputation as the country with the biggest digital economy in Southeast Asia.

“So even though there is a pandemic, Indonesia has succeeded in becoming Southeast Asia’s largest digital economy because it has reached double-digit growth.”

E-commerce in Indonesia plays an important role in driving skyrocketing growth for Indonesia’s digital economy which grew 54 percent in 2020 with a value of $32 billion.

In 2019, e-commerce companies together reached a total value of $21 billion.

Read also: E-Commerce Transactions Projected to More Than Double This Year in Indonesia

Local suppliers that have turned to online sales additionally contributed to the growth of the country’s e-commerce sector.

Furthermore, with users of video streaming and online gaming services rising during the pandemic, online media in the country has had an equally important role with a growth of 24 percent this year.

Online media in Indonesia is valued at $4.4 billion compared to a previous $3.5 billion in 2019.

In less spectacular news, the report found that the online travel segment has nosedived by 68 percent to $3 billion from $10 billion last year.

Transportation and food segments decreased by 18 percent this year to $5 billion from $6 billion.

“Amid the pandemic, e-commerce in Indonesia and online media have undergone exponential growth exceeding the segments of transportation, travel, and food which have faced challenging times.”

Read also: Women in Indonesia Have Better Employment Opportunities in Digital Era

Nevertheless, the future outlook for the two declining segments is quite promising as the report expects a 36 percent growth in 2025 or having a value of $15 billion for online travel.

The transportation and food segment is expected to post a growth of 28 percent or valued at $16 billion.

“By 2025, both segments are expected to rebound in the short to medium-term.”

As Indonesia’s digital economy expands further in the coming years, its e-commerce sector is projected to record a 21 percent growth or $8.3 billion by 2025 while online media in the country is predicted to post an 18 percent growth or $10 billion within the next five years.

(Writer: Yohana Artha Uly | Editor: Bambang P. Jatmiko)

Source: https://money.kompas.com/read/2020/11/24/154124426/capai-44-miliar-dollar-as-ekonomi-digital-ri-peringkat-teratas-di-asia-tengara?page=all#page2