Indonesia eCommerce Logistics Market Size (2024 - 2029)

Indonesia eCommerce Logistics Market Analysis

During the time frame of the forecast, the Indonesia eCommerce logistics market is expected to register a CAGR of more than 5%.

• Indonesia, with its huge population, has great market potential. During the COVID-19 pandemic, e-commerce transactions increased by 23% to a projected USD 32 billion. Total online market sales in Indonesia reached USD 44 billion in 2020, with the e-commerce sector accounting for 72% of the total digital economy value. This increased the demand for eCommerce logistics services, indicating that the market performed very well during COVID-19.
• With a population of 273.5 million people, Indonesia is one of the most promising Southeast Asian e-commerce markets in the world, mainly due to the younger generation's acceptance of online shopping as a more convenient and affordable way to shop. Large and small cross-border e-commerce platforms in the country are also making people more interested in shopping online by offering cashback payments. This is making e-commerce even more popular.Indonesia has the biggest digital economy in the region, making up about 40% of the whole market.It is home to 'unicorns' such as Gojek (ride-hailing), Tokopedia (e-commerce), Bukalapak (e-commerce), and OVO (digital payment), who are resolutely spearheading the country's digitalization. They have attracted investors from all over the world, particularly large tech companies wanting to gain traction in the region. According to Indonesia's Ministry of Communication and Information Technology, about 21 million Indonesian SMBs, or 32% of the total, market their products on online marketplaces. By 2024, the government hopes to get at least 30 million SMBs online. All these factors are contributing to the growth of the market.
• However, in comparison to neighboring countries, internet penetration in Indonesia remains low. While a commercial 5G network has been launched in a few urban areas, many islands and rural areas have limited to no internet access at all. Improving logistics infrastructure continues to be a challenge in a country with approximately 17,000 islands and a vast sea area. The quality of Indonesia's workforce is fundamentally insufficient to meet the demands of its digital industry. Approximately 87% of the workforce has only completed primary and secondary school education. Compared to other Association of Southeast Asian Nations (ASEAN) countries, Indonesia's non-cash payments are still relatively underdeveloped. Another barrier to the development of e-commerce in the country is regulatory uncertainty. While the government has stated its intention to reform, changing certain inward-looking policies will be difficult. Therefore, the regulatory regime is expected to remain unpredictable. These are the challenges that Indonesia needs to overcome to see rapid market growth.

Even though more and more Indonesians are shopping online, most of the country's e-commerce customers are still in the Greater Jakarta area. It is thought that 60-70% of all online shopping in the country takes place in this area. This concentration of e-commerce in Indonesia's big cities has opened up a lot of opportunities outside Greater Jakarta. There are at least 170 million consumers in the second- and third-tier cities who have not been served optimally due to logistical barriers. In order to serve the second- and third-tier cities, several established players in the logistics industry, start-ups, and e-commerce managers are building conjoined warehouse and delivery networks.

Indonesia eCommerce Logistics Industry Segmentation

The term "e-commerce logistics" refers to the transportation, warehousing, and distribution services provided to an online retailer by the logistics company. The Indonesia eCommerce Logistics Market is segmented by service (transportation, warehousing and inventory management, and value-added services), by business (B2B and B2C), by destination (domestic and international/cross-border), and by product (fashion and apparel, consumer electronics, home appliances, furniture, beauty and personal care products, and other products). The report offers market sizes and forecasts in value (USD billion) for all the above segments.