E-commerce in Indonesia has grown rapidly over the past year. According to President Joko Widodo, its rate of growth is quite remarkable. In fact, half in jest, he said that if the current growth of e-commerce continues, many malls will have to close down because of the change in people’s consumption patterns.
He added that these changes are happening not only in Indonesia. When visiting the United States and the UK, nearly everyone he met said something similar. "So, look out mall owners," Widodo said jokingly during a speech in the Indonesian E-Commerce Summit and Expo at Indonesia Convention Exhibition (ICE), BSD City, Wednesday (27/4). (Read: Lippo Launches E-Commerce Worth US$ 500 Million).
Jokowi also asked e-commerce players to compete with foreign e-commerce giants. The government will create a supportive environment for growing a strong e-commerce sector that can compete globally. "After all, I heard Alibaba (a Chinese company) has landed here. It's a warning for us,” said Jokowi.
Previously, Minister of Communication and Informatics Rudiantara mentioned the huge potential of Indonesian e-commerce. The minister said the trade potential of e-commerce in 2015 is an estimated US$ 20 billion, or around IDR 280 trillion. This is higher than figures of US$ 12 billion last year and US$ 8 billion in 2013. (See also: Trade Minister: e-Commerce Rules to Protect SMEs).
Noting this growth, Jokowi has asked businesses to come up with an app to connect communities such as fishers, farmers, and small and medium businesses, to make it easier for them to sell their products. "I expect e-commerce to be able to do that," he said.
Meanwhile, Trade Minister Thomas Trikasih Lembong said that although the prospects look very bright, e-commerce players should prepare for the worst-case scenario. Technology development often brings swift changes leading to business transformation. "Although we should remain optimistic, we must be prepared for the hard times," said Tom.