Heaptalk, Jakarta — The latest e-Conomy SEA 2024 report by Google, Temasek, and Bain & Company revealed that Indonesia’s digital economy is set to reach a Gross Merchandise Value (GMV) of US$90 billion by 2024, reflecting a substantial 13% increase from 2023.
E-commerce remains the dominant sector within Indonesia’s digital economy, growing 11% to reach a GMV of $65 billion in 2024. This growth is driven by continuous innovations among leading e-commerce platforms, which enhance the online shopping experience.
Furthermore, businesses are also increasingly leveraging AI for precision-targeted advertising, enhanced customer engagement, and immersive user experiences. This possibility makes artificial intelligence (AI) another transformative force in the digital sphere.
AI adoption is further fueled by Indonesia’s expanding data infrastructure, with data center capacity projected to grow by an impressive 268%, up from the current capacity of 202 megawatts. This scaling up is expected to meet the rising demands for AI-powered services, data storage, and computational resources.
Growth of other digital sectors
- Digital Financial Services (DFS)
This sector in Indonesia is rapidly gaining momentum. Digital payments, which grew by 19% in 2024, are projected to achieve a Gross Transaction Value (GTV) of US$404 billion, positioning Indonesia as the most significant digital payment is complemented by robust growth in digital lending, which is expected to reach a GMV of US$9 billion by 2024, catering to the financial needs of individuals and small businesses.
- Online Travel
The online travel sector stands out as the fastest-growing industry within Indonesia’s digital economy, with a 24% increase in GMV, reaching US$9 billion in 2024. The sector’s expansion is buoyed by a surge in international travel, with spending on overseas trips skyrocketing by 400% since 2020. Although Southeast Asia remains the primary destination, accounting for 51% of international travel spending, this trend signifies a renewed appetite for global exploration among Indonesian consumers following pandemic-related restrictions.
- Online Transportation and Food Delivery Services
Online transportation services are rising, with a GMV growth from $2 billion in 2023 to $3 billion in 2024. This increase is driven by the recovery in demand for both domestic and international travel, combined with high adoption rates in smaller cities and aggressive promotional campaigns by new market entrants.
Additionally, food delivery services’ GMV increased from $5 billion in 2023 to $6 billion in 2024 as consumer demand increased and businesses expanded their delivery networks into rural and small-town areas.
- Online Media
Although comparatively smaller within Indonesia’s digital economy, the online media sector is steadily growing. The sector’s GMV is projected to increase by 12%, from US$7 billion in 2023 to $8 billion in 2024. This growth is driven by the rising popularity of digital content, online gaming, and streaming services.
Archipelago’s private investment expected to rebound
Despite a subdued investment climate, with $300 million raised across 51 transactions in the first half of 2024, investor sentiment shows optimism for a rebound in transaction volume. Many investors are incredibly hopeful for sectors such as Software as a Service (SaaS), financial technology (fintech), healthcare, and artificial intelligence (AI). According to this year’s report, 65% of investors in Indonesia anticipate a rise in domestic funding between 2025 and 2030.
“Investors are confident in Indonesia’s digital economy potential, driven by robust fundamentals, favorable demographic trends, and a highly active user base. Temasek will deploy capital into Indonesia’s digital economy to drive sustainable and inclusive growth, fostering prosperity across generations.” Director of Temasek Southeast Asia, Cassie Wu, said.
This potential reflects a broader belief in Indonesia’s growing digital landscape, underscored by the government’s support for digital innovation and a rising middle class embracing digital platforms. Analysts expect these factors to fuel sector-specific investment further, particularly as investors look for opportunities to tap into Indonesia’s market.
