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View all search resultsMove over, Jakarta! Small cities to grow Indonesia's digital economy
A 2021 market outlook on Indonesia's digital economy sees small cities overtaking Greater Jakarta, the current digital hub, with fivefold growth by 2025.
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A shoemaker packs sandals on July 17, 2020 in Denpasar, Bali, for delivery to customers who purchased the footwear online. (Antara/Nyoman Hendra Wibowo)
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mall cities in Indonesia are to become the biggest contributors to the country’s digital economy in the next four years, replacing metropolitan cities like Jakarta and Bandung as consumers in big cities reach maturity, says a 2021 report.
Digital growth in nonmetropolitan areas such as Magelang in Central Java and Denpasar in Bali will expand around 5 times by 2025 to surpass growth in bigger cities, according to the report by Indonesia's Alpha JWC Ventures and global consultancy Kearney.
The pace of growth of Indonesia’s digital economy accelerated as a result of mass digital adoption due to restrictive COVID-19 policies, and is expected to continue as start-ups expand to smaller cities.
“Despite remarkable digital economy growth, most regions [in Indonesia] have yet to experience this because digital solutions are often developed and concentrated in Jakarta,” said Chandra Tjan, cofounder and general partner at Alpha JWC Ventures, as quoted in a press statement provided on Wednesday.
Indonesia’s internet economy was forecast to grow 11 percent year-on-year (yoy) in 2020 to reach a value of US$44 billion and by 2025, was projected to make up a large portion of Southeast Asian’s potential internet economy worth $310 billion, according to the e-Conomy SEA 2020 report by Google, Temasek and Bain & Co.
Chandra expressed optimism that increasing digital development and adoption in smaller, nonmetropolitan cities would lead to the birth of new unicorns in e-commerce, peer-to-peer (P2P) lending and the small and medium enterprise (SME) service segments.
Read also: Alpha JWC Ventures expects more unicorn start-ups to emerge from fintech, consumer sector
