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Yearender 2021: Indonesia’s digital economy got bigger, not necessarily better
Adoption of online services soared during the pandemic in Southeast Asia’s biggest digital economy, but scrutiny has been growing as scams, cyberattacks and high fees taint the industry.
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Illustration of digital economy (Shutterstock/File)
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rowth in the digital economy remained robust in 2021 as the COVID-19 pandemic pushed digital adoption further. Indonesia welcomed 21 million new users of online services during the pandemic, according to the e-Conomy SEA 2021 report.
The report, produced by Google, Temasek Holdings and Bain & Co, showed that Indonesia’s internet economy was predicted to reach US$70 billion in gross merchandise value (GMV) this year, retaining its status as the biggest digital economy among six Southeast Asian countries assessed.
However, scrutiny of the relatively young industry has been growing as reports of scams, cyberattacks and high platform fees make the rounds, jeopardizing users' safety and therefore also their trust in digital services.
“In terms of size, Indonesia’s digital economy has grown [...], but there is much to be done when it comes to advancing the quality of the digital economy ecosystem,” Center of Economics and Law Studies (CELIOS) director Bhima Yudhistira told The Jakarta Post on Dec. 23.
The online lending industry was in the spotlight this year as the Financial Services Authority (OJK) closed down 593 unlicensed P2P lenders in 2021. The task force has pulled the plug on more than 3,500 such platforms since 2018.
Indonesia Fintech Society (IFSoc) steering committee member Rudiantara, who was formerly the country’s information and communications minister, said that, while taking down illegal lenders addressed the criminal aspect of the issue, industry players needed to ramp up efforts to educate the public.
“Victims of illegal online lending are usually those with low digital and financial literacy, so lending platforms must increase education for the public,” he said during a discussion on Dec. 9.
