Diving Into Indonesia's E-commerce Export Potential - Part 1

Hui Shan Tan

ping into Indonesia's eCommerce Export Potential part 1


Usually, when people talk about Indonesia’s e-commerce potential, it’s about how much one could potentially earn when selling to people in Indonesia.

But what about the items that are bought online from Indonesia? What kind of potential does Indonesia have when it comes to e-commerce export potential?

According to research by the Hinrich Foundation and AlphaBeta, e-commerce’s Indonesian GDP contribution currently counts towards Rp 125 trillion in 2017. Hinrich foundation research expects it to reach Rp 2305 trillion by 2030, 18-fold increase. From there, e-commerce is expected to grow 8.5 times more from 2017’s numbers to contribute Rp 240 trillion by 2030, or USD 18 billion in exports alone by that year.

With those sort of numbers, Indonesia’s government certainly sees Indonesian e-commerce as a way to boost its economy and its exports.

To find out how Indonesia could reach these numbers, the following questions need to be asked:

  • What kind of B2C e-commerce products from Indonesia have lots of potential overseas?

  • What kind of policies are in place to drive Indonesia’s e-commerce export growth?

Indonesia’s Potential E-commerce Export Winners

Indonesia is home to established local e-commerce platforms like Bukalapak, Tokopedia, and Blibli to name a few. Some of these platforms like Bukalapak are aiming to expand beyond Indonesia which can help widen the availability of local Indonesian goods to regions like Southeast Asia and beyond. An announced agreement between Alibaba and the Indonesian government could even see Indonesian products entering China in time for the annual Singles’ Day sales.

Some of the products categories that could potentially do well are the following:

  • Fashion & Accessories

  • Processed Food

  • Beauty & Cosmetics

These Indonesian-sourced products listed here are popular in Asia Pacific countries like Singapore, Malaysia, Brunei, Hong Kong and Taiwan and in cases even Africa and the Middle East. But what factors contribute to these categories’ potential and how could they potentially succeed?

Fashion & Accessories

Indonesia’s Trade Ministry (Kemendag) has recognised textiles and product textiles as one of Indonesia’s top 10 exports. Clothes (not knitted or crocheted) and knitted and crocheted clothes categories have been seeing positive export growth from 2016 till today despite a slowing global economy.

Table Showing Indonesia's Clothing Exports Value until 2018
Export value of Indonesia’s knitted and crocheted and non-knitted/non-crocheted clothes. Source: Kementerian Perdagangan Indonesia – Growth of Non-Oil and Gas Export (Sectoral) Period : 2014-2019  – Source

Indonesian textile and textile product exports reached a value of USD 12.4 billion in 2017, easily putting Indonesia among the world’s top 10 garment and textile exporters. Driven by demand from countries in Southeast Asia and the Middle East, Indonesia’s exports to these countries were enough to offset the drop in demand from the United States and European countries, showing the resilience that Indonesian textiles and garments have when it comes to exports.

Indonesia’s status as one of the top 10 garment manufacturers can be explained by its strong economic foundation. Like China, Indonesia has a decent local supply of raw materials, a sizeable labour force and a big domestic economy. Also helping is Indonesia’s integration into the Association of Southeast Asian Nations (ASEAN) free trade agreements.

Modest Wear and Designer Wear

Apart from having access to a cheap production environment which can drive down Indonesian garment and textile costs, Indonesia has seen some rising stars of its own in the modest wear and designer clothes businesses.

Indonesia is home to the largest population of Muslims in the world. Recently, Indonesia has seen the rise of a sizeable local group who has shown interest in designer wear while not compromising their religious values of being modest and newer fashion trends like modest wear.

Demand for more variety in fashion styles has lead to the creation of local companies like HIJUP. Companies like HIJUP cater to ‘various hijab fashion items’ for Muslims who want to have ‘plenty of choices to dress in style, with various models and designs in modesty.’

Currently, HIJUP has had 1.6 million unique visitors to its website since 2011 and ships products by prominent Muslim designers to more than 50 countries. Some of the most popular countries include Malaysia, Brunei, Singapore, Australia, America, England and several European countries. Based on research conducted by the Association of e-commerce in Indonesia (idEA) in 2014 HIJUP.com is one of the 17 most popular fashion e-commerce sites in Indonesia.

If companies like HIJUP are able to do well overseas, their potential is enormous. According to a 2018 report by Thomson Reuters in collaboration with Dinar Standard, global Muslim spend on fashion was USD 270 billion in 2017 and is forecast to grow 5% each year to USD 261 billion by 2023.

HIJUP isn’t the only one leading this charge. Local brands like Berrybenka and Sorabel also feature modest fashion pieces, some of which can be found on local online platforms like Bukalapak.


Indonesian Batik is also a noteworthy fashion category. Batik textiles is made via a traditional method of producing coloured designs by dyeing them. Wax is applied to parts to leave them undyed. These products are sold as textiles or as finished clothing, usually men’s dress shirts and dresses.

According to Tokopedia, the sales of Batik has increased by 35 times compared to figures from 2014, which indicates booming demand for this category. Products like these are popular in Southeast Asian countries like Malaysia and Singapore.

Indonesian batik companies are growing in sophistication. Companies like Dan Liris have grown to become fully-integrated Indonesian textile and garment manufacturers which have full control over the batik garment production process. Companies like these even become the trusted partners of brands like Donna Karen New York, Marks and Spencers and even Disney and Dunhill.

With local Indonesian platforms hoping to expand their coverage beyond Indonesia, we’re likely to see potentially even greater growth of Indonesian e-commerce fashion exports, such as modest wear, designer fashion, batik, and more.

Processed Food

Indonesia’s Ministry of Trade has recognised Indonesian processed food as one of its top 10 exports with potential. This category includes instant noodles, crackers and snacks, bird’s nest, coffee and more.

Indofood, one of Indonesia’s largest producers of processed food reported in 2017 that the value of its overseas sales was IDR 3.1 trillion, or USD 219 million. This represented 10.3% growth from its 2016 overseas sales value of IDR 2.81 trillion, or USD 199 million. By mid-2018, exports made up 12% of Indofood’s sales, which shows that Indonesian processed food still has a lot of potential to grow.

Indofood’s top-selling categories are its instant noodles, like Indomie and sauces like chilli sauce and soy sauce. The Indonesian ministry of trade also released the top 10 countries that import Indonesian processed food in 2017 and 2018. Worth noting is that 6 of these countries, the Philippines, Malaysia, Singapore, Vietnam, Thailand and Cambodia are Southeast Asian. According to Indofood, regions like the Middle East and Africa also really like Indonesian processed food.

Source: Kementerian Perdagangan Republik Indonesia (Ministry of Trade)

Source: Kementerian Perdagangan Republik Indonesia

Known for being cheap, affordable, and accessible, Indonesia’s packaged food’s flavour also makes it a hit in many households. In some cases, Indonesians who are living abroad, such as those who are working or studying, would also purchase Indonesian packaged food for a taste of home. They’ll either go to their current country’s retail store, or in some cases, purchase these products online to get their Indonesian food fix.

E-commerce is also changing the way SMEs are selling their local food as well. Indonesia’s push to digitalise is seeing more internet access to more parts of the country. More SMEs are now having access to platforms like Tokopedia and Bukalapak, or in some cases even Instagram to sell their products online. Some examples of this include selling home-made rendang and sambal online.

So far, it’s been shown that Indonesia is home to a number of talented fashion designers while having the understanding and foundation necessary to capture the upcoming modest fashion trend. Indonesia’s packaged food has been showing increasing export growth, while e-commerce platforms have the potential to help packaged food SMEs reach a wider, international audience. These aren’t the only two categories that have lots of potential to drive Indonesia’s e-commerce exports forward. In our next piece, we’ll cover Indonesia’s cosmetics export potential and how Indonesia’s government is planning on supporting e-commerce exports in the country.

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Interested in e-commerce in Indonesia? Find out more about Indonesian e-commerce with our latest e-book!:

2019 Guide to Entering Indonesia’s E-commerce Market

More articles on Indonesia’s e-commerce:
Diving into Indonesia’s E-commerce Export Potential Part 2: Cosmetics, Skin Care and Essential Oils

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