E-commerce Growth, Digital Business Expectations for 2024, and Related Issues.
February 2024
The Indonesian economy is predicted to continue experiencing significant growth in 2024, strengthened by the rapid development of the digital economy, which will reach USD 110 billion in 2025, according to the 'e-Conomy' SEA 2023 report. This is good news for the country’s micro, small, and medium enterprises (MSMEs) as e-commerce has many ways to develop their businesses and enable them to penetrate the global market.
Indonesia is the 9th largest market for eCommerce with a predicted revenue of US$67,758.3 million by 2023. With an expected increase of 4.2% in 2023, the Indonesian eCommerce market contributed to the worldwide growth rate of 8.7% in 2023. Like in Indonesia, global eCommerce sales are expected to increase over the next few years. The Indonesia e-commerce market is expected to grow from USD 52.93 billion in 2023 to USD 86.81 billion by 2028, at a CAGR of 10.4% during the forecast period (2023–2028).
Issues and Grievances Surrounding E-Commerce
The swift rise in e-commerce activities can adversely affect consumers in the absence of standardized services. Data from the Indonesian Consumers Foundation (YLKI) reveals 124 consumer complaints in 2023 pertaining to e-commerce or online shopping concerns.
E-commerce grievances constituted 13.1 percent of the total complaints received by YLKI last year, amounting to 943 complaints. The majority of these complaints centered on fund refunds or reimbursements in e-commerce, comprising 23.4 percent of the total e-commerce complaints.
Following closely were instances of fraud or hacking, comprising 14.8 percent of the complaints, non-delivery of goods at 5.5 percent, and delivery issues at 4.7 percent of the complaints.
Rio Priambodo, Head of Complaints and Legal Affairs at the Indonesian Consumers Foundation (YLKI), noted that numerous cases of fraud in e-commerce during 2023 have been reported to e-commerce platforms.
How to avoid customer complaints
1. What are good tips for dealing with customer complaints? While there is no one-size-fits-all solution to reduce customer complaints, here are five tips to help.
- Be proactive.
- Over communicate and analyze customer complaints and implement feedback.
- Don't ignore feedback, and always look for patterns.
- Accept that mistakes happen.
- How you respond is what’s going to make or break overall customer satisfaction.
2. How can you prevent customer dissatisfaction?
While you’re going to make mistakes, the best way to prevent customer dissatisfaction is to be proactive and have a specific plan for when things go wrong.
3. How can you use customer complaints to improve your business?
While it can be tempting to make excuses as to why something went wrong, the best way to use customer complaints to improve your business is by listening, asking for feedback, and doing your best to make things right.
Projection of Gross Transaction Value/GMV of E-Commerce in Indonesia (2021-2030)
According to projections by Google, Temasek, and Bain & Company in the e-Conomy SEA 2023 report, the gross merchandise value (GMV) of e-commerce in Indonesia in 2024 will reach US$ 62 billion.
This is a 7% increase over 2023, although slower compared to 20% in 2022.
In 2023, electronic money transactions in Indonesia are targeted to reach IDR 508 trillion, or grow by 25.7 percent compared to 2022.
Source: databoks.katadata.co.id
Google, Temasek, and Bain & Company assess that Indonesia's e-commerce growth in 2023 will slow down because many companies are changing business strategies.
"Growth slowed down because price-sensitive consumers looked for alternative options. However, the number of consumers who remained was quite large, thereby compensating for slowing market growth with higher net income growth," said the Google team in its report.
The Google team projects that Indonesia's e-commerce GMV could increase to US$82 billion in 2025 with a compound annual growth rate (CAGR) of 15%, and could even reach US$160 billion in 2030.
Source: databoks.katadata.co.id
“While national digital payment standards and frameworks in Indonesia have triggered a sharp increase in digital payment adoption,” said the Google team, they assess that Indonesia's digital economy still faces a number of challenges, one of which is related to regulation.
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**By: Stefani W. Anggraeni — Marketing Communications Manager & Social Media Specialist