Since the pandemic, the existence of online shopping has been growing in society. This situation made various brands sell their products via e-commerce. However, offline shopping (buying products directly in the official store) still exists too. Do you know how much online purchasing impacts Indonesia?
According to the annual report of SYNC Southeast Asia by Meta and Bain & Company that carries the digital economy and the future of e-commerce in the region, more than 80% of Indonesian consumers do their pre-purchase and post-purchase processes on online channels, but offline channels are still considered highly important at the purchasing stage.
If we look at the long-term prospects in Southeast Asia, this condition is very promising by looking at the projected growth of Southeast Asia’s Gross Domestic Product (GDP) from 2022 to 2023 which is expected to exceed other markets such as the United States, the European Union, and China.
This study showed that Southeast Asia is expected to show growth of 5.1% compared to other markets such as the United States (1.3%), European Union (2.1%), and China (4.7%) by the end of 2023. Projected annual inflation rate in Southeast Asia from 2022 to 2023 is also expected to run better than most of its peers and is projected to decline from 4.2% to 3.3% by the end of 2023. Meanwhile in Indonesia, the prospect of overall digital shopping remains positive, with e-Commerce Gross Merchandise Value (GMV) increasing its share to USD 56 Billion million.
This was largely driven by the steady growth of Indonesia’s digital consumer population which is the highest among Malaysia, Philippines, Singapore, Thailand and Vietnam with 168 million Indonesian digital consumers, where around 46% of the population is aged over 15 years. Even more, Southeast Asia’s digital consumer population is still growing and is expected to reach 370 million people by the end of 2022, in which 82% of the total population are consumers aged over 15 years. This situation is projected to increase further to 402 million people in 2027.
“This new evolution of the digital consumer will undoubtedly be a driving force for growth of
Southeast Asia’s e-Commerce Gross Merchandise Value (GMV) with a favorable long-term demographic profile, and because Southeast Asia leading the way in the adoption of tomorrow’s technology, focused business on staying on track in this region, building an integrated channel strategy and the necessary capabilities, has resilient supply chains, and leverage the latest tools and technologies to engage with its digital consumers, we will emerge victorious,” said Edy Widjaja, Partner at Bain & Company.
Pieter Lydian, Country Director of Meta in Indonesia stated another important finding in this study is that Indonesian digital consumers take advantage of many integrated channels such as video and business messages in their buying process. “We saw videos and business messaging continues to grow and plays an important role in consumer purchases in the country. Indonesians spend 44% more time consuming videos and 55% more time sending messages. Businesses and brands can take advantage of this opportunity to provide a seamless and integrated shopping experience that enables them to walk on online and offline channels smoothly in this endemic world era. It’s vital for businesses to connect and meet customers where they are, driving the experience of more attractive retail customers,” said Pieter.
More than 30% of Indonesian respondents said video is one of the top 3 ways to find and evaluate products. This is a proof of their strong will to experiment and get involved and it impacts on the emergence of business messages and video consumption in digital shopping spaces. Top channels for short video discovery are social media ads, organic social media posts, and video streaming ads.
Indonesia is at the forefront of the regional curve in terms of new technology adoption. Although this is still in its early stages, Metaverse is a new chapter of technological innovation that gives a lot of hope in various countries – one of them is Indonesia. Metaverse-related technologies are gaining attraction where around 72% of Indonesian respondents have used the technology in the past year. Variations in the types of Metaverse-related technologies used in the country including cryptocurrencies (46%), augmented reality (34%), virtual worlds (29%). This was followed by NFT and VR.
“As technology advances, the emergence of technologies related to the metaverse will build bridges to immersive experience in the future. Metaverse will open up new opportunities for people, communities, and businesses . We will continue to focus on infrastructure readiness, build ecosystems for creators, upgrade skills and tools to prepare us and Indonesian talents to face the future, which is not too far from now,” added Pieter.
The study found that Southeast Asia sees more foreign direct investment being channeled to this region. Foreign direct investment accounts for a larger proportion of total investment in 2021, at 17% compared to 15% in 2015 and only 9% in 2009. This steady increase in foreign investment is evidence of investor trust in Southeast Asia and it encourages the growth of new technologies such as fintech.
This study also found that Southeast Asia demonstrates higher penetration of e-Wallets, cryptocurrencies and Non-Fungible Token (NFT) compared to other markets such as China, the United States, the European Union and Japan, with nearly 70% in Southeast Asia used at least one technology related to the Metaverse in the past year.
According to the study, metaverse-related technological experiences such as augmented reality, virtual reality, virtual worlds, cryptocurrencies, and NFT will evolve from the many 2D applications used today and become an immersive virtual 3D experience in the next 2-3 years. This study estimated that virtual reality for business domains such as training, development, workspaces and hosting social events in the virtual world will be available in the region in the next 10-15 years.
The SYNC Southeast Asia study was based on a survey involving approximately 16,000 digital consumers and gathered insights from interviews with more than 20 Chief Experience Officers (CXOs) across 6 countries in Southeast Asia, namely Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Surveyed digital consumers were those who have made an online purchase at least in 2 product categories for the past 3 months and aged over 15 years.
For more information, read the full report online at: https://www.facebook.com/business/m/sync-southeast-asia