Indonesia: Shipping Guide and eCommerce Market Insights

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Jakarta Roundabout

SHIPPING TO INDONESIA

Southeast Asia (SEA) has been heralded as the next land of opportunity for eCommerce. With fast-growing markets like Indonesia looking ripe for cross-border sales of your eCommerce goods, it would ideal for your shipment to sail through customs, reaching your customers safely and on time.

 

Country ID ID
Capital City Jakarta
Official Language Bahasa Indonesia
Currency Rupiah (IDR)
Population Size 273 million

 

Indonesia’s eCommerce market value is US$26 billion in 2020 and expected to grow to US$50 billion by 2024 – a near double increase between 2020 and 2024, as reported by Statista.

This rapid growth of Indonesia’s eCommerce sector is supported by the increase of smartphone and Internet usage, a big population of 273 million individuals with increasing purchasing power, and a growing population of the young and tech-savvy.

Dealing with customs in Southeast Asia could be challenging seeing that each country has its own set of customs regulations, import duties, paperwork and taxes that need to be complied with.

This is a living page that will frequently be updated with insights about:

 


PART 1: CUSTOMS CLEARANCE IN INDONESIA

1. Indonesia’s De Minimis Rate, Import Taxes and Customs Duties

According to Indonesia’s Directorate General of Customs and Excise, Ministry of Finance, on the 30th of January 2020, Indonesia will lower their de minimis value threshold from US$ 75 to US$3 on inbound shipments. This means that additional import duties and taxes will be imposed on products above US$3 which includes VAT, income tax and import duties, which vary depending on the item being imported.

The infographic below shows how this differs for bags, garments and shoes for instance.

Indonesia De Minimis 2020 - duties and taxes

To get a fuller explanation of how these changes could affect your Indonesia-bound imports, check out our article on Indonesia’s 2020 de minimis changes.

For a full list of import duties for different types of goods, you can check this list.

 

Next: Restricted and Prohibited Goods

2. Restricted and Prohibited Goods

Restricted items that require licenses before going through customs clearance:

  • Grains
  • Medicines
  • Health & Beauty products that are applied directly onto the skin or taken for consumption

Prohibited items that cannot be imported into the market:

  • Narcotics and drugs
  • Pornographic materials
  • Politically sensitive materials such as printed papers and pictures
  • Firearms, explosives, ammunition (requires a special license)
  • Guns, sports weapons, hunting guns (requires a special license)

This list may change depending on government regulations. Visit the official customs page for the latest information. It can be found in the ‘Lartas Information’ section under the ‘NTR Indonesia’ tab. There you can check which items are prohibited and restricted,  categorised by an import permit.

 

Next: Required Customs Documents

3. Required Customs Documents

Documents required by Indonesia’s customs clearance include:

1. Packing List

This gives product details, shipment volume in kilogram or cubic meter, and serves as a checklist to ensure shipment has been packed correctly or not.

2. Commercial Invoice

This gives total shipment value usually in US dollar. Helps to determine the import duties and taxes, and eligibility of shipment.

If you are shipping without a logistics partner that can clear customs on your behalf, you may need to include the following shipping documentation as well:

  • Certificate of origin
  • Bill of lading or airway bill
  • Insurance policy
  • Receipt of payment of import duty and import-related taxes (SSPCP)
  • Import declaration form (PIB)
  • Other relevant permits, licenses, and certificates

 

Next: Section 2: How to Ship to Indonesia from Various Countries

PART 2: HOW TO SHIP TO INDONESIA FROM VARIOUS COUNTRIES

Shipping from one country to another, be it an eCommerce delivery or a full container moved via sea freight follows a general set of steps:

You can click on any of the links above to find out more about each step

steps in cross border shipping

 

Next: 1. First Mile Delivery in the Origin Country

First-mile Delivery in the Origin Country

The first-mile stage in international shipping refers to the first stage of the shipping supply chain, where it either leaves the merchant’s address, be it a storefront, office, or warehouse. Prior to your goods leaving your storage facility, the product has to be packaged and labelled appropriately to facilitate smooth cross border shipping.

Great preparation can help minimise the chances of your shipment going missing or getting damaged during delivery. Generally, you’ll want to do the following:

  • Engage the right shipping partner
  • Packaging your products
  • Choosing the right service levels
  • Providing shipping details
  • Printing and attaching shipping labels and documents to your package(s)
  • Hand over shipment to carriers

If you’d like a more in-depth to each of these steps, you can find more at this preparation guide for merchants.

You can also find out more about what the first mile entails in our first-mile article.

 

Next: Origin Country Customs Clearance Origin Country Customs Clearance

Origin Country Customs Clearance

As your shipment arrives at the origin country’s port or airport, the parcel would need to be cleared by local customs for export. This is where the customs officers will inspect the parcel’s contents and shipping documents and determine if it’s exportable from Singapore. If you’re planning to ship with B2B, you may want to check if you need to produce specific customs documentation for export on your local customs websites. You can find a list of these on our Customs Clearance in SEA resource page.

 

Next: Freight or Mid-mile to Indonesia

Freight or Mid-mile to Indonesia

When it comes to freight options, shipping your goods to Indonesia can generally be done in two ways – air freight and sea freight.

For merchants shipping B2C parcels, air freight is the faster option, especially if you don’t have a consistent order volume and need your parcels to reach the destination country quickly.

On the other hand, sea freight is generally more cost-effective for shipping in bulk. However, it is slightly slower than air freight. When managing your inventory, you’ll need to take into account the estimated delivery date so that you can plan out your supply chain accordingly.

We’re currently building guides to ship to using different mid-mile methods to Indonesia from various origins.

More are on the way, so be sure to check back often:

 

Next: Customs Clearance in Indonesia

Customs Clearance in Indonesia

Once your item arrives in Indonesia’s airport or port, your shipment will be transported into a customs warehouse for clearance. This is where the customs officers will inspect your parcel and shipping documents and determine if your product is allowed to enter Indonesia.

To clear customs for import into Indonesia, you or your shipping partner would generally need to provide the following documents:

  • Certificate of origin
  • Master airway bill or bill of lading
  • Insurance policy
  • Receipt of payment of import duty and import-related taxes
  • Other relevant permits, licenses, and certificates

More information about this is available in this guide’s customs clearance section.

 

Next: Distribution and Last Mile in Indonesia

Distribution and Last Mile in Indonesia

Overview of how international delivery and last mile delivery works in Jabodetabek

Once your shipment has cleared customs, it will enter the distribution stage of the shipping journey. If your shipment was delivered to a port or airport in Jakarta and the consignee’s address is within the Jabodetabek region, your B2B shipments can be delivered directly to its destination.

However, B2C parcels need to be at a transport hub to sort them out before the last mile journey can begin. However, if the address is beyond an address that can be reached by vans or trucks, an additional domestic flight will be needed before your shipments can be sorted or sent to last-mile delivery.

The last mile delivery stage is where your parcel will be sent from the destination warehouse to your consignee’s address. In Indonesia, this stage of the delivery is done via vans or motorcycles. During the last mile delivery stage, your logistics service provider will ensure that your shipment is received by your consignee. According to Statista in 2019, around 1 in 10 online transactions are paid via cash on delivery. Thus, it helps to offer cash on delivery in order to win the trust of your eCommerce consumers.

Ramadan also brings with it various last mile challenges, you can read more about that in our article on tackling last-mile issues that arise during Ramadan.

Different countries have different steps at origin customs clearance and different freight modes. To find out more about these for specific origin countries, check out our posts below:

 

Our next section covers Indonesia’s eCommerce insights to power your online promotions and campaigns.

Next: Find out more What’s Driving Indonesia’s eCommerce Market?

PART 3: INDONESIA ECOMMERCE INSIGHTS

Why Indonesia? Key stats of Indonesia’s eCommerce market

 

  • Indonesia’s eCommerce market stands at US$21 billion in gross market value (GMV) in 2019.
  • With many investments pouring into the country, Indonesia displays great potential to be one of the biggest eCommerce economies in the region. The eCommerce industry is expected to hit an impressive US$ 82 billion by 2025–a nearly four-fold increase from 2019
  • In 2017, 35 million people in the country made online purchases; this figure may reach 119 million by 2025, according to a report by Google and Temasek.

 

4 Major Factors Driving eCommerce In Indonesia:

1. Growing Middle Class

  • The World Bank notes that at least 52 million out of 265 million people in Indonesia are now part of the middle class, who now have higher spending power and internet access.

 

2. High Internet and Mobile Penetration rates

  • The rising rates of smartphone and internet penetration have given people even in rural areas access to online shops, marketplaces, social media sellers, and apps.
  • Half of Indonesia’s population are active internet and social media users, according to data compiled by Hootsuite.

 

3. New Payment Methods are Appearing in Indonesia

  • Currently, e-wallets are still in a nascent stage in Indonesia and are slowly getting picked up by online retailers.
  • The agent-to-consumer method is also popular, in which shoppers would pay for purchases via sales agents’ online payments and then pay the agents in cash.
  • Alternative finance is also flourishing. For instance, Kredivo offers an online credit card that only requires one’s mobile phone number for registration. It allows buyers to pay in instalments either online or offline.

 

4. eCommerce Tech Investments in Indonesia

  • After Indonesia’s government relaxed investment rules in 2016, investors have been quick to make headway into Indonesia’s eCommerce scene.
  • Since gaining greater investment, both Bukalapak and Tokopedia have announced the creation of research and development centres for eCommerce.
    • Both aim to support local SMEs and develop capabilities in machine learning and drone delivery, which will shake up the Indonesian business scene.
  • Go-Jek recently launched a marketplace for deal vouchers and created an interest-free virtual credit card.

We dive much deeper into these four factors in both our downloadable Indonesia guide and also our overview on Indonesia’s eCommerce drivers.

 

Next: Meet Indonesia’s Major Online Shoppers

 

Sources:

Google & Temasek | World Bank | We Are Social | Finch Capital | Helix Institute | Reuters | e27 (Tokopedia) | Daily Social Indonesia | e27 (Go-Jek)

Meet Indonesia’s Major Online Shoppers

Types of Indonesian shoppers:

Indonesia's Online Shoppers Personas - Austrade - 2020

Indonesians’ Primary Motivations for shopping online:

Practicality or Convenience

  • These practical reasons include avoiding massive traffic or the ability to compare products and prices among different sellers without leaving one’s seat for instance.

Lower Prices

  • Many marketplaces and branded websites could sell the same product for lower price compared to brick-and-mortar establishments
  • Ability to easily compare deals among various sellers.

Product Range

  • eCommerce stores can aggregate the products of different sellers to offer more choices, and even offer items that are not found in Indonesia.

Reliable Reviews

  • The availability of reliable reviews increases the likelihood of Indonesians trying out an online store.

Promotions

  • These include tantalising offers such as zero interest rates and free shipping as their main reason for buying online.

 

Types of Personas you could cater to:

The City Convenience Seeker:

  • Loves following the latest trends, e.g. tech, fashion
  • Buys online because: Convenience – e.g. skipping traffic jams in urban areas

Meet Arief, our City Convenience Seeker. He lives in Jakarta and earns roughly IDR 120 million

(US$8,200) per year working as a software engineer.

In his free time, he likes to watch videos of YouTubers unboxing and reviewing gadgets. He reads extensively about mobile phones before choosing which one to buy. But because he lives in Jakarta, going to the mall to purchase a new phone means driving through hours of traffic. So he buys it online instead, comparing deals between Lazada and Tokopedia.

The Trendsetter

  • A big fan of trendy, international brands and items
  • Buys online because: Availability – some items cannot be found locally – e.g. K-pop fashion

Putri is a professional in her mid-20s who lives in up-and-coming cities like Bandung and makes around IDR 80 million per year. She’s one of Indonesia’s Trendsetters.

She likes finding trendy clothes at a bargain and follows Indonesian fashion icons on Instagram. While the city she lives in is experiencing rapid growth, it doesn’t have a wide enough range of apparel stores, including niche boutiques like those that sell K-pop-inspired clothing. She turns to online retail stores like Shopee to get her affordable fashion fix, as well as to social sellers on Instagram and Facebook.

 

What Else Influences Online Purchase Choices in Indonesia?

Online Searches

  • Before making a purchase, at least 45 per cent of Indonesian buyers conduct Google searches and read customer reviews, and 98 per cent of mobile users look up products online.

Social Media Reviews

  • They also rely on social media to discover products—especially YouTube, Facebook and Instagram
  • They want reassurance from trusted sources that what they are going to buy is worth their purchase

Chat and Social Groups

  • You should also bear in mind the influence of social groups on WhatsApp and Line.
  • In messaging groups like these, Indonesians tend to ask one another for product and store recommendations.
    • On these platforms, links to reviews and even promotions and store landing pages can be shared directly among users
  • Indonesians rely a lot of word-of-mouth and reviews from their peers when deciding what to buy online. That being the case, it pays to be cautious when branding your store and products to Indonesians.

 

Personas like Arief and Putri aren’t the only buyer’s personas in Indonesia you can target. There are at least two other Indonesian buyers’ personas that you could target, such as industrious mothers and busy small business owners. To find out more about them, visit our post on who are Indonesia’s major types of online shoppers.

Another up-and-coming group of shoppers you could target in Indonesia are its Muslim Millennials. To find out more about their preferences and influences, head over to our post about this young group of shoppers.

 

Next: Top eCommerce Product Categories in Indonesia

 

Source: Austrade

Top eCommerce Product Categories in Indonesia

Vector image Fashion, Consumer Electronics, Health and Beauty, Mom and Baby

1. Fashion

  • Fashion accounts for a projected $2.6 billion of revenues in Indonesia—an amount expected to grow to $3.9 billion by 2023.
  • Comfort and appearance were the top considerations of fashion buyers in Indonesia, but tastes change as the country develops.
  • In 2017, their main priorities towards fashion changed towards comfort and size fit.
  • New Clothes are particular important to Indonesia’s primarily Muslim populace during the Ramadan month
  • Two emerging fashion trends that are gaining traction in Indonesia: Contemporary hijab/modest fashion & sustainable fashion

If you’d like to find out more, check out our article on Indonesia’s modest wear eCommerce trends.

2. Consumer electronics

  • Indonesia’s consumer electronics and appliances market’s revenue is projected to reach US$ 2.5 billion in 2019
  • Higher-income shoppers tend to buy foreign—particularly Western—brands, while lower-income shoppers strongly prefer local brands
  • Smartphone penetration expected to reach 67 per cent in 2020
  • Shoppers’ preference for foreign brands in this segment will serve as a boon to sellers from outside the country
  • Revenue in the wearable electronics segment in Indonesia is expected to reach $120 million in 2019
  • Indonesia is the fourth of the top five markets in the world with the greatest sales potential for this segment.

3. Mom & baby

  • Around 1.6 million babies are born every year in Indonesia
  • 66 per cent of Indonesian shoppers purchases mom and baby products online, and 57 per cent buy such products once a month. Reasons being:
    • Convenience of shopping at home.
    • Variety of brands available via eCommerce.
    • Save money buying in bundles through eCommerce

 

  • Indonesian mothers are generally open to trying new brands when shopping for mom and baby care products both online and offline.
  • They tend to visit online marketplaces directly, especially sites dedicated to mom and baby products

4. Health and beauty

  • Demand for cosmetics and toiletries in Indonesia grew by 11.9 per cent 63 in 2017—higher than the average growth rate of 10 per cent in the past six years.
  • Health and beauty products are high in demand during the Ramadan period in Indonesia.

 

  • More Indonesian buyers, especially young, modern, and affluent women, are choosing halal-certified cosmetics.
  • The majority of halal cosmetics sold in Indonesia are made locally. It’s also getting tougher for foreign sellers to enter this space.
  • Indonesian shoppers are also exhibiting an increased preference for natural and organic-certified products

Indonesians are also willing to spend extra on skincare. Find out in our blogpost on Indonesian skincare eCommerce trends.

 

This is a summarised version of one of our blog posts. To find out more, check out our post about Indonesia’s Top 4 eCommerce product categories

Ramadan is also a period with high online spending in Indonesia, but is also a time when Indonesians spend more on relatively different types of products. To find out they’re buying during the period, check out one of our recent posts about what Indonesians buy online during Ramadan.

 

Indonesia is one of the world’s leading fashion manufacturing hubs. Next to fashion, other homegrown products such as pantry items and cosmetics have export potential for those who are looking for new suppliers. Check out more in our Indonesia’s export potential series:

 

Next: Popular Online Shopping Platforms & Payment Methods in Indonesia

 

Primary Sources: Statista – Fashion Indonesia | Deloitte | Today Online | Jakarta Global | Statista – Consumer Electronics Indonesia | Ipsos | Unicef | EcommerceIQ | aCommerce | TechinAsia | Statista – Beauty and Personal Care Indonesia | Austrade

Popular Online Shopping Platforms & Payment Methods in Indonesia

In Indonesia, as elsewhere, there are several types of online platforms that sell not just Indonesia’s top-performing product categories but also a huge variety of goods. These platforms include business-to-consumer sites (B2C) and more recently, consumer-to-consumer (C2C) shopping sites as well.

Mainstream Online Platforms

Marketplaces

  • Different marketplaces in Indonesia have different specialisations and cater to different demographics.
  • Their wide variety and large numbers of sellers make them popular among Indonesians.
  • Some of these cater to specific niches such as local products or premium, branded products while others cater to the wider market. Some examples include:
    • JD.ID
      • JD.com’s Indonesian marketplace is a great place to sell your products on if your products are more on the premium quality and price spectrum

 

    • Bukalapak
      • Bukalapak is focused on helping local Indonesian small-to-medium enterprises sell products and services online.

 

    • BliBli
      • Blibli goes more for wider appeal and selling as wide a variety of products as possible.

Branded websites

  • Businesses sell directly to consumers from their own websites or stores.
    • This is especially useful for luxury brands that aim to maintain exclusivity and control.
    • Others choose to use omnichannel retail, where their website is an additional sales channel to existing methods like brick-and-mortar

Social Commerce Platforms

  • Social commerce allows buyers to connect with individual sellers through online social networks like Facebook.
    • Around 30 per cent 73  of online purchases in Southeast Asia in 2016 were made via social networks.
  • Customers might purchase directly from businesses for their availability of supply or because they trust the seller or brand.

 

Preferred Payment Methods for Online Purchases

Cash on Delivery, Credit Cards and Bank Transfers

  • Originally being used for 65.3 per cent of digital purchases, cash on delivery is still important in Indonesia as it still serves 14 per cent of eCommerce payments according to JP Morgan
  • Credit cards are used for 34 per cent of purchases, while ATM or bank transfers account for around 26 per cent.

eWallets

  • Different eCommerce platforms offer their own eWallets as well, or partner with fintech companies to do so.
  • The country’s high mobile phone penetration rate has also paved the way for cashless payments to be made via mobile.

This information and more can be found in our post on Indonesia’s major online shoppers.

 

Next: Major Online Sales Events in Indonesia

 

Sources: e27 | JP Morgan | Blackberry Messenger blog

Major Online Sales Events in Indonesia

 

Singles’ Day, Harbolnas, 10.10 and Ramadan are some of the biggest Indonesian major online sales events.

  • Singles’ Day & Harbolnas
    • Singles’ Day started in Nanjing University in 1993 when four single guys met on November 11th to discuss ‘how to break free of the loneliness and monotony of single life’. It soon grew popular among single Chinese youths.
    • Singles’ Day has since become an online shopping festival when Alibaba took the opportunity to launch “Double 11” deals to boost sales
    • Lazada Indonesia created Harbolnas, Indonesia’s own ‘National Online Shopping Day’ on 12.12, to encourage Indonesian consumers to shop online with the idea that if all the eCommerce stores collaborate rather than compete, they could accomplish bigger sales results.

 

  • Shopee 10.10
    • With numbers 11 and 12 already taken, Shopee sought to capitalise on another double-number date.
    • In 2016, Shopee launched its 10.10 campaign and ran discounts throughout the week leading up to ‘Mobile Shopping Day’ on October 10th.

 

  • Ramadan
    • The Ramadan month is considered a sacred period for millions of Muslims in Indonesia.
    • During Ramadan, many Indonesians also prepare their homes for visits during the upcoming Hari Raya Idul Fitri celebrations held after the fasting month by shopping for house décor, festive food and clothes
      • Tokopedia reports a growth of 30% from the clothing category for a two-month period leading up to the Hari Raya celebrations
    • Indonesians also purchase consumer electronics such as smartphones, tablets and cameras and toys/games during this period
      • Shopback reports that toys and games were the best performing category in online sales in Indonesia in 2017.

Other popular shopping seasons include:

Event Name Event Period
Lunar New Year Usually in Jan or Feb
Lazada Birthday Festival Apr 25 – 27
Tokopedia Anniversary Aug 17
Shopee’s 10.10 Oct 10
Singles’ Day & Harbolnas Nov 11, Dec 12
Mother’s Day Dec 22
Ramadan Changes every year as it follows the Islamic calendar

 

If you’d like to find out more, we cover each of these periods in more detail in our post on Indonesia’s major online shopping events.

 

Next: Section 4: Public Holidays and Top Import and Export Countries

PART 4: ADDITIONAL INFORMATION

Non-working days in 2020

Saturday, Sunday and public holidays are non-working days. Please expect shipment delays on these days.

List of public holidays:

Date Holiday
Jan 1 New Year’s Day
Jan 25 Chinese New Year
Mar 22 Isra Miraj
Mar 25 Hari Raya Nyepi
Apr 10 Good Friday
May 1 Labour Day
May 7 Waisak Day
May 21 Ascension Day
May 22 Lebaran Holiday
May 24-25 Hari Raya Idul Fitri
May 26-27 Lebaran Holiday
Jun 1 Pancasila Day
Jul 31 Idul Adha
Aug 17 Independence Day
Aug 20 Muharram
Oct 29 Maulud Nabi
Dec 24 Cuti Bersama
Dec 25 Christmas Day

 

Indonesia’s Top Import and Export Partners

EXPORTS
Rank Market
1 China
2 Japan
3 United States
4 India
5 Singapore
IMPORTS
Rank Market
1 China
2 Singapore
3 Japan
4 Thailand
5 United States

 

 

Sources: Office Holidays (2020) | World Bank (2020)

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