Global management consulting firm McKinsey & Company has forecast fast growth for e-commerce in Indonesia, predicting sales to reach US$65 billion annually by 2022, eight times the $8 billion recorded in 2017.
“Our research suggests some 30 percent of online commerce – sales worth US$2.5 billion in 2017 – is additional spending that would not have existed if not for online commerce,” said Simon Wintels, a partner of McKinsey, in a statement received on Monday.
McKinsey noted that the buzz around year-end online shopping festivals – notably Single’s Day, or November 11 (11.11), and December 12 (12.12) – reflected the potential of online commerce in Indonesia.
McKinsey estimated that e-commerce could facilitate up to $26 billion in new exports, or equal to 40 percent of manufacturing exports today. It also identified that jewelry exports in particular had benefited from online commerce.
“The interest of major, global consumers reflects the growing demand for Indonesian products from international markets,” said Phillia Wibowo, McKinsey Indonesia’s managing partner.
“More sectors need to take notes from the jewelry sector because overall Indonesian exports through online commerce remain low, with many local merchants yet to tap into international markets.”
McKinsey also argued e-commerce supported financial inclusion, as to date, e-commerce has indirectly provided some 300,000 micro business owners with access to financial services through online payments systems.
“To encourage the growth of mid-sized companies, the public and private sectors need to collaborate to create accelerator programs aimed at boosting the competitiveness of promising mid-size companies,” said Phillia.