According to market research firm Frost & Sullivan, the e-commerce market in Indonesia is forecast to grow at 31.1% CAGR or $3.8 billion by 2019. This is fuelled by a positive demographics profile, robust economic growth, high mobile adoption and a large number of e-commerce players offering a wide variety of products online to Indonesian consumers.
Country director of Frost & Sullivan Indonesia Spike Choo says that poor logistics infrastructure and inaccessibility of banking services are some of the key challenges that still need additional investment and time before e-commerce can truly take off in the country.
Choo also pointed out that credit and debit cards as well as e-money transactions will continue to grow steadily despite cash being the preferred payment method for offline transactions.
Market intelligence firm Euromonitor reported in November 2015 that a weakening Indonesia economy as well as a strengthening US Dollar will put a damper on financial transactions – creating an environment that favours credit cards over debit cards or cash for payment transactions as consumers opt for short-term financing.