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RI digital economy shows double-digit growth, yet funding still subdued
The country’s GMV is projected to grow by 13 percent to US$90 billion by the end of the year after previously expanding by only 6 percent last year.
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Digital trade can transform how firms innovate by reducing information, logistics and transaction costs associated with acquiring foreign inputs. (Shutterstock/Summit Art Creations)
T
he size of Indonesia’s digital economy, measured in gross merchandise value (GMV), is estimated to see a rebound to double-digit growth this year, driven by key players focusing on monetization strategies to reach profitability, but follow-up funding remains subdued.
The country’s GMV is projected to grow by 13 percent to US$90 billion by the end of the year after previously expanding by only 6 percent last year.
That is according to the e-Conomy Southeast Asia report published annually on Nov. 5 by tech giant Google, Singapore-based Temasek and the United States-based research firm Bain & Company. The archipelago accounted for a third of ASEAN GMV at $263 billion.
“Indonesia’s digital economy has grown more than three times compared with the past six years,” Google Indonesia country director Veronica Utami said in a press briefing at Google’s Jakarta office on Nov. 13, citing the country’s GMV was only $27 billion in 2018.
GMV typically serves as a key indicator for assessing the performance of the digital economy sector, as tech companies only collect revenues from fees charged upon merchandise sold in a given period of time.
E-commerce remains the country’s largest contributor to the GMV, though it is projected to slow by 11 percent year-on-year (yoy) to $65 billion this year.
Platforms like ByteDance's TikTok Shop, Sea Group's Shopee, Alibaba's Lazada and Google’s recently launched YouTube Shopping, have driven growth in Indonesia’s digital commerce industry.
