the trend of e commerce in developing country

The Trend of E-Commerce in Developing Country: Indonesia

Presenter : Nurfazlina Binti Haris

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Conclusion

CONTENTS

Introduction

Economy & Technology Infrastructure

Trend of E-commerce in Indonesia Payment Method

Indonesia Online Consumer

Access trend in Internet

SMEs E-commerce

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INTRODUCTION

242.3 million of Population

4th largest population in the world

Lowest contributor of GDP in South East Asia

Position as a lower middle income class (world bank 2012) 3

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INTRODUCTION

Recently, Indonesia government is inviting foreign investor tocreate inside competition (Chulmo&Yulia , 2010)

Expanding IT infrastructure by allocating at least 10% of $12trillion in total investment in 2011 - 2030 (Shirley, 2011)

Political aspect has gone wide change than previously andthis also still effect the E-commerce policy bond withIndonesia Civil Codes which affect the e-signature and legaldata protection issues. (Raman & yap, 1996 ; Della , 2011)

Susilo Bambang Yudhoyono

INTRODUCTION

“E-Commerce is a universal concept which covering any

form of business transaction or exchange of trade by using the IT and Telecommunication” (Whitely, 1998)

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“The Use of the Internet and the Web to transact business or

digitally enabled commercial transactions between and among

organization and individuals.”

(Kenneth & Jeffrey, 2007)

2008

2011

Gross Domestic Product

Economic Infrastructure

As due to the success to be ranked at 44th among 139 countries in aGlobal competitiveness report 2011As the Economic pressure risingannually, both opportunity and challenge to related bodies andinstitution in Indonesia, where push improve theirbusiness, legislative, and IT infrastructure for a bright future.(Shirley, 2011)

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Figure: GDP of Indonesia from 2008 to 2011(World Bank, 2012)

TechnologyInfrastructure

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

18,602,20916,429,083

26,193,906

43,618,615

Internet User in Indonesia

2008 2009 2010 2011

2006 : Third generation (3G) has deployed in Indonesia and

many operators compete to grab

mobile user attention

Then enhancement to

3.6 Mbps of HSDP access technology

Ownership of personal computer

steadily increase from

2006 (1.4 million) to 2008 (2.5 million).

2008 : Government of Indonesia allocate 1.93

million for 2.3 GHz WiMAX

2010 : WiMAX successfully

been deployed

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Figure:

(World Bank, 2012)

Chulmo & Yulia (2010); Basharat & Marayedis (2010); Donny & Mudiardjo (2009)

Indonesia fixed lined Internetbandwidth is also more expensivethan mobile phone services.

Warnet (Internet café) has become apopular place to access the Internet.(Deloitte Access Economies, 2011)

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TechnologyInfrastructure

E-commerce was still underdeveloped which isin 2010, Indonesia only spends US$230 millionper year whereby less than 0.1% of GDP.

It is estimated that only 1.6% of directcontribution of the internet to the IndonesiaGDP in 2011 (Deloitte access economics, 2011)

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Trend of E-Commerce in Indonesia

Payment Method

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A survey has been made and most online consumer Spent only RP. 500,000 in E-Commerce

Pay m e nt w a s m a d e f r o m

Telkomsel was introducing a mobile wallet service known as T-Cash, to allow and promoting their customers to use their mobilephone to buy and pay for services online through the use of SMS.

(Varitrans& Dailysocial, 2011)


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Indonesian mostly reflect to the affection of purchasing in E-commerce, especially around the workplace, was the place forpeople to get awareness about the Internet.

Education level and age also are the factor for the intention ofpurchasing in E-commerce. (Rofiq, 2011)


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Characteristic of Indonesia internet user’s toward making apurchasing in online was also formed from them:

Dispositional trust (Trust level of person in general)+ Interpersonal trust (Trust arises from outside influence)

Rather than the issues of risk perception in privacy and securities. (Hidayanto,2012)

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WHERE ARE THEY SHOPPING IN ONLINE?

Most of the consumer refers to the “Facebook”, “Kaskus”, and “Tokobagus”, websites to shop

SMEs Internet Business in Indonesia

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SMEs E-commerce in Indonesia, increase their salesrevenue with positive value from 41% - 60 %

Cost of maintenance for websites is less than companytotal capital

(As’ad & Ahmad ,2012)

(Deloitte Access Economies, 2011)

SMEs Internet Business in Indonesia

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Constra int factors

Internet Connectivity

Bank Administration

Goods distribution to buyer

Poor Infrastructure

Poor Strategic

Poor Skills

(As’ad & Ahmad ,2012)

Access trend among Indonesia Internet User

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The Indonesia mobile phone user which uses to access the Internet

Based on the study, Indonesia has a huge opportunity for grown in M-business, moreover Indonesia was overpopulated with the Smartphone andmobile phone internet application (Carrie et al. 2012)

(Deloitte Access Economies, 2011)

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Conclusion

The E-Commerce in Indonesia was relatively increased from timeto time. SMEs and Internet user are aware of the onlinecommerce advantages. The government of Indonesia also awareof the advantage of utilizing the Internet’s capabilities, toincrease the country GDP, society's welfare, and country’sinfrastructure especially in, technology and health.

RecommendationsImproving the country's technology infrastructure,Establish better procedures and policy especially in paymentmethod,Provide better product competitive and customer support in theonline commerce.Transform the business and government administration to usethe internet as a strategic tool.

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• *16+ Carrie Y., McMillan, J. et al. “2012 Outlook for The Retail and Consumer Products Sector in Asia; Indonesia” p. 34. PriceaterhouseCooper (PWC) Limited. 2011

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References

http://www.thejakartaglobe.com/business/it-sector-vital-to-indonesia-growth-official/446953













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