Break free and expand your business from Malaysia and Singapore to Southeast Asia, USA and beyond.Learn more
Update 14th Jan 2020: Indonesia will be revising its de minimis value down to US$3 from an earlier US$ 75 on the 30th January 2020 as confirmed by Indonesia’s Directorate General of Customs and Excise, Ministry of Finance1. You can find more details about how this could affect your shipments, at our latest announcement.
Article content updated 23rd July 2021
In our 2021 updated Indonesia eCommerce overview, we covered that Indonesia’s eCommerce market is the biggest in Southeast Asia. Its eCommerce market is driven by a large population with a rising middle class, lower poverty and the COVID-19 pandemic which pushed even more shoppers online and changed purchase behaviour. Knowing the size of the market can help with your store expansion plans, but knowing Indonesians’ product preferences can really take your online sales campaigns one step further.
Based on Statista’s estimates, the projected 2021 market sizes for these product categories sold online are:
These are based on Statista’s categorisations, but we’ll also be covering the Mom & baby category which straddles multiple categories such as fashion, personal care and toys.
Fashion continues to be the biggest eCommerce product category purchased by Indonesians, accounting for an estimated US$ 13.22 billion in market size in 2021. It’s expected to grow to US$ 19.40 billion in 2025.1
Indonesia has an urbanisation percentage of 56.64 per cent.2 This means that nearly half of their population lives in non-urban areas, a fact that has been noted by Zalora – one of the premier fashion online stores in Southeast Asia. In Zalora’s Southeast Asia Trender Report 2020, they reported that 77 per cent of Zalora’s shoppers in Indonesia live in non-urban regions.3 When you’re working with a network provider, be sure that their last mile coverage covers the areas where you estimate more of your shoppers live.
COVID-19’s impact led to more people needing to adapt to working and spending more time at home. Zalora’s Trender Report mentions that Zoom fashion, children’s clothing and activewear were the key trends they’ve noticed across the region in 2020.
Indonesia also saw plenty of its citizens adapting to working from home, along with the video calls they entail. With only one’s top being visible, Zalora noted increased purchases of blouses and tunics while the sale of dresses fell. Blouses and tunic sales rose from 15 to 17 per cent while dresses dropped from 24 per cent to 17 per cent.
With indoor gyms being closed and a lot of regular physical activities, such as group sports, getting disrupted, people in Indonesia needed to shift how they stayed fit. Zalora’s Trender Report noted that in Indonesia, there was increased search interest in fitness equipment in the second quarter of 2020 vs the same period in 2019:
This coincided with the increase in sales of sportswear and activewear. Activewear is known to be comfortable, cooling and most importantly versatile. One could go from doing housework to working out without needing to stop to change. Zalora notes that the most popular item types here include sports performance tops, sports lifestyle tops.
Childrens’ wear also saw a big boost in 2020. In Indonesia, t-shirts followed by tops, dresses, sports shoes then shorts were the most popular product categories in childrenswear in decreasing order. Zalora attributes this to this region having a large youth population. Indonesia has 25.94 per cent of its population between the ages of 0 to 14 years.4 With brick and mortar stores either closed during the earlier lockdowns or unsafe, many turned to online shopping for the clothing needs of their growing children. As they get older, their clothing sizes change which leads to more purchases.
Prior to the pandemic, research by Deloitte showed that in 2014, comfort and appearance were the top considerations of fashion buyers in Indonesia. In 2017, their priorities changed, leaning towards comfort and size fit.5 In fact, aesthetics, trendiness, fabric, and size fit have all increased in importance to Indonesian consumers. Given these trends, eCommerce sellers in ASEAN can step in to offer products that satisfy consumers’ demand instead of just competing on price.
The hijab has appeared in high-fashion runways around the world, reflecting a contemporary approach6 to hijab fashion that young and modern consumers can appreciate. Hijab fashion bloggers7 with large Instagram followings have been a major driving force behind this trend.
While you may not be a seller of contemporary hijab fashion, this trend is similar to the style of modest fashion8 that became popular globally in 2018. The principle of modest fashion is, foremost, to cover one’s skin. Modest clothing also tends to prioritise comfort and fit, satisfying Indonesian shoppers’ demand for these aspects.
If you’re planning on entering this market, take note that modesty and comfort without compromising aesthetics and style could be the way to go.
With increasing attention towards ethical and sustainable manufacturing processes, sustainable fashion also called ‘slow fashion—is a niche sector that targets middle-class and affluent consumers (MACs) in Indonesia9.
However, the scarcity of raw materials10 used in sustainable manufacturing processes, such as natural fibres like cotton, silk, and ramie, is a challenge for Indonesian fashion producers. They are forced to import some of their raw materials as there are insufficient supplies of these within Indonesia.10
If you are in the sustainable fashion business, be it selling garments or raw materials like natural dyes, this is a great opportunity to introduce your goods into the market.
Indonesia’s consumer electronics eCommerce market is expected to reach US$ 8.175 billion in 2021 and grow to US$11.906 billion by 2025 according to Statista.11
Research from the consumer research firm YouGov found that 31 per cent of Indonesian consumers can be considered technology ‘early adopters’, well above the global average of 18 per cent. The report went on to say that their “enthusiasm for technology is so high that they account for a plurality of all consumers”. 70 per cent of these early adopters are between 18 and 34 years old, with 6 of 10 of them being male.12
This group indicated that they were more willing to spend on consumer electronics this year. In this December 2020 report, 36 per cent of these early adopters mentioned they are more likely to purchase a new smartphone in the next six months, which was 10 per cent higher than the global average of 25 per cent. This willingness to spend could be linked to their relatively larger disposable income compared to the rest of Indonesia’s population, 60 per cent of whom have experienced reductions in household income and savings.13
This matches an older report by Deloitte. Higher-income shoppers with monthly household incomes of more than IDR10 million ($690) a month are the major purchasers of consumer electronics online, according to a report by Deloitte. These include audio and video electronics products, as well as small and major household appliances.14
These higher-income shoppers tend to buy foreign—particularly Western—brands, while lower-income shoppers strongly prefer local brands like Evercross and Advan smartphones and Polytron home electronics. On the other hand, Japanese and Korean electronic brands are generally well regarded across the spectrum, but more so by mid- to high-income shoppers. Chinese brands like Xiaomi are also becoming more popular in the smartphone category.15
Indonesians are a mobile first populace, with mobile devices being favoured over desktops or laptops for daily internet use. We are Social and Hootsuite’s Digital 2021 Indonesia reports that 71 per cent of Indonesians access the internet via mobile devices. Back in 2019, Statista estimated that 70.05 per cent of Indonesians would be using smartphones in 2020 with this growing to 89.21 per cent in 2025.16
With that in mind, it’s no surprise that mobile phones and smartphones are the most widely bought consumer electronics items online. Shoppers’ preference for foreign brands in this segment will serve as a boon to sellers from outside the country. In fact, Euromonitor mentions that among the top 5 manufacturers in consumer electronics, nearly all of their sales came from smartphones.17 During 2020’s 11.11 sale, mobiles and tablets were the best-selling categories with Xiaomi emerging as the top brand.18
The Toys, Hobby & DIY segment is projected to reach US$ 6.78 billion in 2021 and grow to US$ 9.93 billion in 2025 by Statista.19
Statista estimated that the largest segment is DIY, Garden & Pets with a projected market volume of US$ 2.16 billion. This might have been largely driven by the pets category as Euromonitor mentioned that leading players in the Indonesian market performed well, seeing increased demand from existing pet owners as well new pet owners who emerged during the crisis.20
As for the home and garden segment, Euromonitor mentions that COVID-19 slowed the home and garden segment in Indonesia back in 2020. This was largely due to the slowing housing and property market in the country, and lower disposable incomes of consumers.21
Millions are born every year in Indonesia, Southeast Asia’s most populous country.22 A survey by EcommerceIQ found that 66 per cent of Indonesian shoppers purchase mom and baby products online, and 57 per cent buy such products once a month.23
One of the major reasons cited by respondents in the study included the convenience of shopping at home. This allows pregnant mothers to shop without having to leave one’s baby or travel to brick-and-mortar stores and malls. Another major reason Indonesian mothers shop for these products online is the variety of brands available via eCommerce. Many eCommerce sellers also sell in bundles, which allows them to offer larger discounts compared to selling the items individually which can help Indonesian mothers save money.24
The good news is that Indonesian mothers are generally open to trying new brands when shopping for mom and baby care products both online and offline.25 They tend to visit online marketplaces directly, especially sites dedicated to mom and baby products.26 They also use Google, Facebook, and Instagram to discover new products. You can consider going onto these platforms if you are looking to sell mom & baby products online in Indonesia.
Baby clothing can account for nearly half of purchases in the mom and baby category in Indonesia. Given Indonesian moms’ shopping habits noted above. This allows you to appeal to mothers by offering an array of designs and sizes along with a relatively large discount.27
Baby gear is the second most popular segment in this category, making up nearly a quarter of purchases.28 Baby gear includes products like diapers, prams and more.
As product quality is one of the major concerns of Indonesian online shoppers, the onus is on eCommerce sellers around Southeast Asia to prove the quality of their items, including baby gear.29 Demonstration videos and word-of-mouth recommendations on Facebook and Instagram—the social media channels that Indonesian moms most use to discover baby products, according to EcommerceIQ—will enable retailers to establish a brand of quality. Having positive product reviews on your site also helps.
Indonesia’s furniture and appliances segment is projected to grow to US$ 6.26 billion in 2021 according to Statista. They also expect this segment to grow to US$ 9.71 billion in 2025.30 Both furniture and appliance segments saw their retailers forced to shift to online channels as a result of COVID-19. Due to the decrease in average Indonesian disposable income, Euromonitor estimates that growth in these segments had slowed down compared to 2019. 31
Prior to the pandemic, rising urbanisation and a strong middle class fueled furniture purchases according to Mordor Intelligence.32 Mordor posits that muti-purpose furniture such as sofa cum beds, hydraulic beds, foldable tables, and beds with storage were gaining popularity among Indonesians who wanted to optimise the use of their home’s space. Mordor also suggested that Indonesian homeowners could be looking beyond just basic functionality of their furniture and make decisions more based on style and comfort.
Small cooking appliances took a hit in Indonesia as they are non-essential items amidst dropping disposable income.33 On the other hand, Euromonitor reported that the sales of blenders and juice extractors benefited slightly from rising health and wellness awareness during 2020 which was itself driven by wanting to keep oneself safe from COVID-19.34
Wanting to improve their diets and increase their intake of essential nutrients, fresh juice became more popular as many Indonesian consumers are already aware of the strong nutritional profile of fresh fruits and vegetables and the juice that comes from them.35
Thinking about expanding your online store to Indonesia? Get the latest tips and tricks in our latest Indonesian e-book, now updated with Ramadan-related info:
As for the beauty and personal care segment, eCommerce revenue here is expected to grow to US$ 4.15 billion in 2021 and grow to US$ 6.35 billion in 2025.36 Shopee uncovered a surge in demand for personal care products when it saw sales of 4 million facial care products during its 11.11 sale in Indonesia.37
Skin care products make up three-fourths of all cosmetics imported in Indonesia, according to Austrade. ASEAN eCommerce sellers have the opportunity to differentiate their skin care products by responding to the demand for cosmetics with organic and herbal formulations.38
The pandemic contributed to a rising trend of increased self-care and personal grooming as a way of taking care of one’s well being according to Zalora’s Southeast Asia Trender Report 2020. With in-person interactions decreasing and more time being spent at home, Indonesians are likely to continue shifting their spending away from cosmetics like lipstick and instead go for beauty products like clay masks (130 per cent increase in demand according to Zalora) and night cream.39
Back in 2018, Austrade reported that internationally branded cosmetics hold a 70 per cent market share in the country.40
That may soon change, though. The same report states that more and more Indonesian buyers, especially young, modern, and affluent women, are choosing halal-certified cosmetics. The use of local celebrities and beauty vloggers for promotion has also driven these products’ appeal.41 The same Austrade report notes that a majority of halal cosmetics sold in Indonesia are made locally. It’s also getting tougher for foreign sellers to enter this space. Effective 2019, Indonesia is requiring all halal cosmetics (as well as all products that meet halal requirements, such as meat) entering the country to adhere to its Law No. 33/2014 on halal product assurance.42
If you are planning on entering Indonesia’s cosmetics market, you should check whether the government of the product’s country of origin has an agreement with that of Indonesia to consider the former’s halal certification valid.
Indonesian shoppers are also exhibiting an increased preference for natural and organic-certified products—a trend again driven by MACs and reflective of global trends. This same conscious choice is driving the growth in demand for ethically produced items.43
It bears repeating that no two countries are alike, and that Indonesia’s online shopping habits and preferences may vastly differ from that of your country. It’s important to constantly research and monitor your target country’s eCommerce trends and laws. Factors like culture, religion, and trade policies affect the country’s eCommerce industry, which makes expert local knowledge vital.
It’s also good to have help when entering new markets. Make sure you have a trustworthy international logistics service provider and a good local seller-partner with in-depth knowledge and understanding of the country’s eCommerce logistics trends, challenges, and opportunities to make the most of entering Indonesia’s eCommerce market.
“Hi Janio Team,
Thanks! My team has been happy using your company’s services instead of our usual shipper. Despite the 1 or 2 customs hiccups, generally our team has been very happy.”
If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs like Honey City’s, come and have a conversation with us!
Interested in eCommerce in Indonesia? Find out more about Indonesian eCommerce scene here:
In 2021, the United States of America still has the largest GDP in the world at US$ 20.93 trillion1 while still retaining the global number 2 spot in terms of eCommerce sales.2 This article follows up on our earlier art ...
On 1st August, Indonesia's Customs will make it mandatory for imports to have the consignee's NPWP number on each consignment note.
Discover the latest trends in eCommerce and logistics and supply chain with insights from this Google panel featuring Janio, DHL and EasyShip
How do parcels enter Singapore from China via air freight? What kind of customs documents do you need to clear SG customs? Find out here!
How do parcels enter Singapore from China via air or sea? What kind of customs documents do you need to clear ID customs? Find out here!
How do parcels enter Indonesia from China via air or sea? What kind of customs documents do you need to clear ID customs? Find out here!