Jeffrey Bahar, Group Deputy CEO of Spire Research and Consulting, addresses the e-commerce industry in Indonesia, as the Day-1 1st Keynote Speaker and Day-2 Workshop Session, at GATES ICT Reseller Channel Summit 2017, in Bali, Indonesia. Participants includes IT channels, resellers, principals actively in the market or have strong interests on Indonesia IT and e-commerce industry.
3. +256 MILLION
POPULATION
67%*UPPER MIDDLE TO HIGH
$324 BILLION
TOTAL RETAIL SALES
CLASS POPULATION
Indonesia Demographic Overview
* People with more than 60 million income per annum
Source: Deloitte, OECD, Nielsen, Others
3% 2% 2%
8% 7% 7%
25%
28% 29%
2006 2011 2020
Percentage Change in Disposable
Household Income in the Low, Middle,
and High Income in Indonesia
Lower Income Middle Income High Income
22
%
27
%
5%
6%
2015 2016
Food
Beverages
5% 3%
8%
9%
14%
3%
2015 2016
Welfare & Saving
Leisure & Holiday
Credit Card
10
% 9%
12
% 11
%
2015 2016
Housing & Utilities
Transportation
Overall Expenditures Across the Three Consumer Product
Clusters (2015 – 2016)
6%
12%
2%
“48% of Indonesia’s total
spending on fast moving
consumer goods comes from the
middle class.”
DAY 1
4. Top 5 Countries in 2016 Global Retail Development Index
2016
Rank
Country Market
Size*
(25%)
Country
Risk**
(25%)
Market
Saturation
(25%)
Time
Pressure
***
(25%)
GRDI
Score
Population
(Million)
GDP per
Capita,
PPP
National
Retail
Sales ($
Billion)
1 China 100 61.2 36.2 92.5 72.5 1,370 14,190 3,046
2 India 53.7 54.3 75.8 100 71 1,314 6,209 1,009
3 Malaysia 81.2 83.4 23.5 50.4 59.6 31 26,141 93
4 Kazakhstan 56.4 37.3 61.9 70.2 56.5 18 24,346 48
5 Indonesia 64.3 38.9 50.2 68.9 55.6 256 11,112 324
Source : AT Kearney
* 0 = low attractiveness, 100 = high attractiveness
** 0 = high risk, 100 = low risk
*** 0 = no time pressure, 100 = urgency to enter
DAY 1
5. Types and Number of Retail Stores in Indonesia (2016)
2.3 mio
STORES
Traditional
Retail
Modern Retail
(Minimarket)
Modern Retail
(Supermarket)
19,440
STORES
12,210
STORES
20%
12.50%
10% 9.50%
8.00%
10% 10%
2.40%
6.00% 5.60% 5% 4.80% 5% 5.40%
2011 2012 2013 2014 2015 2016F 2017F
Growth of Modern Retail Turnover in Indonesia
Growth Rate GDP Growth
Share and Growth Rate of Modern Retail in Indonesia
Source : Indonesia Trade Ministry, Spire Research and Consulting
7. Source : IFC B2B Payment Assessment, 2015
Total Value of Traditional Retail Channel Transactions in
Indonesia
8. Type of
goods
for sale
Ready to drink
(100%)
Instant beverages
tea, coffee (96%)
Mineral water
in gallon (42%)
Toiletries (99%)
Household care (93%)Medicine/ drugs
(87%)
Beauty treatments
(71%)Food including
Instant noodle,
canned food (100%)
LPG (45%)
Other Basic Needs/
Sembako not including
rice
(95%)
Mobile phone credit
(pulsa) (18%)
Rice (55%)
Others (27%)
Source : Spire Research and Consulting
Types of Goods for Sale in Indonesia Traditional Retail
10. 88.1 million internet user
(34% population)
75 million smartphone user
(29.2% population)
308.2 million mobile phone
user
(121% population)
3 hour/day, average of
internet access via mobile
device
3 million fixed broadband user
(1.5% population)
2 hours 25 minutes/day,
average of social media
usage
74 million social media
user (29% population)
69 million facebook user
50 million twitter user
Indonesia Digital Landscape (2016)
Source : Spire Research and Consulting
11. Source : Spire Research and Consulting
Number of Online Shoppers in Indonesia
Online sales Transaction VS Retail Sales In Indonesia (2013-2016F)
Year
Online Sales
Estimate
(Billion USD)
Retail Sales
Estimate
(Billion USD)
Online Sales As
a Percentage of
Retail Sales
2013 1,8 363,4 0,50%
2014 2,6 411,3 0,63%
2015 3,6 473,9 0,76%
2016 4,5 543,1 0,83%
The growth of online shopper at
17.27% from 2013 to 2016 gives
significant effect on the sales
percentage of online
transactions.
With CAGR at 25.74% for over
the four years, Indonesia is
becoming the potential market
in E- Commerce industry.
E-Commerce Development in Indonesia
2013
2014
2015
2016
4.6 mio
5.9 mio
7.4 mio
8.7 mio
DAY 1
14. 34.47%
65.53%
Grocery Purchase via Mobile App
Yes No
Usage of On-Demand Service in Indonesia
Source : Livingsocial
10.73%
10.73%
27.12%
38.70%
42.09%
49.15%
61.30%
Other Supermarket
Apps
HappyFresh
Klikindomaret
Bukalapak
AlfaCart
Tokopedia
Lazada
Where Do People Order Their
Grocery Online?
DAY 1
15. Free shipping
Exclusive items or
deals
Product warranty
Safe and simple
payment methods
Trust issue on
product quality
No hands on
experience before
buying
High shipping cost
and slow delivery
time
Unreliable payment
method
Shoppers Likes and Dislikes in Online Shopping
DAY 1
17. Source: Asosiasi Penyelenggara Jasa Internet Indonesia, LivingSocial
1%
2.30%
2.70%
7%
24%
33%
67.40%
Mobile Money
Rekber
PayPal
Debit Card
Credit Card
Internet Banking
SMS Banking
Online Payment Methods Used by
Indonesia User as of 2015
Used Electronic Payment Method in Indonesia
17%
10.42%
12.46%
28%
69%
I have never paid
for an on-demand
service
Other e-money
services (Android
Pay, PayPal,
KasPay, etc)
Credit Card
In-apps e-money
(Go-Pay,
GrabPay, etc)
Cash
Payment Methods Used to Pay for
On-Demand Services (2016)
DAY 1
18. Mobile Money / Mobile Payment
Jak CardBank DKI
Bank Mandiri
Indomaret Card
Gaz Card
E-Toll Card
E-Cash
Bank BCA
Flazz Card
Mega Cash
Mega Virtual
Tap Cash
Brizzi
BBM MoneyBank Permata
CIMB Niaga Rekening Ponsel
Nobu Bank Nobu E-Money
Bank BRI
Bank BNI
Bank Mega
1
t-cash
Indosat Dompetku
XL Axiata XL Tunai
Smartfren Uangku
Telkom
I-Vas
Flexi Cash
Skye Sab
Binus Easy Transaction
Skye Mobile Money
FinChannel
Mynt e-moneyArtajasa
Doku WalletNusa Satu Inti Artha
Finnet Indonesia
Witami Tunai Mandiri Witami Tunai
mVcommerce Ponsel & Instan Pay
2
3
4
5
6
9
7
10
Bank Institution Telco Provider
1
2
3
4
5
3rd Party Payment
Service Provider
1
2
3
4
5
6
(Dismissed in 2015)
Source : Spire research and Consulting, gathered from many sources
BCA Sakuku
BTPN WOWBTPN
8
Landscape of Mobile Payment Aggregator in Indonesia (1)
Bank DKI
1
UniqKu
DAY 1
19. Some card based e-money players have launched the web based and mobile application to
support the behavior of banking people who is getting mobile, as well as support the growing
number of smartphone penetration and the increasing trend of online transaction
Card Web Based, USSD, SMS
Mobile Apps
Most of the transaction of
e-money happened on the
merchant will usually be
handled only by the same
acquirer (on-us), since the
e-money (card base)
instrument have not
implemented
interoperability
All transaction of mobile
operators’ service is
delivered through its
dedicated network, and
could be accessed either
through UMB or mobile
application.
Source : Spire research and Consulting, gathered from many sources
Landscape of Mobile Payment Aggregator in Indonesia (2)
21. offline merchant dominates
because Indonesian consumers
feel more comfortable in doing
transaction at offline merchant
Prepaid e-money have a
significant growth in terms of
usage. This is due to marketing
activities or promotion held by
those banks with the merchant,
mainly on F&B and retail stores
Most of bank and mobile operators
users prefer to use mobile payment for
offline transaction, while the rest of e-
money usage is driven by some
collaborative promotion offered by the
online merchants and the mobile
payment provider
Share of Spending at Offline and Online merchant
Source : Spire research and Consulting, gathered from many primary sources
Bank Cards
(ATM, Debit, &
Credit card)
E-money
instrument
Mobile
payment
Small percentage
on online merchant
Trx.
Almost none
transaction on online
merchant
Smaller percentage
on online merchant
Trx.
Usage Behavior on Each Payment Instrument
DAY 1
23. Shifting in Customer Behavior Post Digital Technology Era
Source : Ipsos OTX/Google 2012 Holiday Shopping Intentions Survey
DAY 1
24. E-Commerce 2.0: O2O
“The key to O2O is that it finds
consumers online and brings
them into real-world stores. It is
a combination of payment
model and foot traffic
generator for merchants (as
well as a “discovery”
mechanisms for consumers)
that creates offline purchases.”
~Alex Rampell, CEO and Founder of TrialPay,
2010
Source : Gitome
DAY 1
29. Conclusion #1
Modern retail is having stronger existence in urban areas,
while traditional retail holds their presence in rural areas.
DAY 1
30. Conclusion #2
The convenience of online shopping attracts people to use
it; and alongside with it, e-payment grows.
DAY 1
31. Conclusion #3
The e-competition is growing fiercer, with companies strive
to provide a better e-shopping experience. Addressing
customers needs is the key.
DAY 1
32. Jeffrey Bahar, Group Deputy CEO
jeffrey.bahar@spireresearch.com
M: +62-812-1005 940
Tel: (62-21) 5794 5800
Wisma 46 Kota BNI, 25th Floor, Unit 07 & 09
Jalan Sudirman Kav. 1, Jakarta 10220
INDONESIA
indonesia.info@spireresearch.com
www.spireresearch.com