Heaptalk, Jakarta — The latest e-Conomy SEA 2023 report arranged by Google, Temasek, and Bain & Company projected Indonesia’s Gross Merchandise Value (GMV) would attain US$110 billion (around Rp1,719 trillion) by 2025. The report also revealed that Indonesia’s digital economy performed a stable growth and is predicted to reach US$82 million of GMV, elevating 8% YoY this year. The digital-based businesses have transformed their focus into monetization towards profitability.
The digital economy in the country is forecasted to continue uplifting, aligned with regional growth on average, and expected to be the main driving force of Southeast Asia’s digital economy enhancement.
Managing Director of Google Indonesia, Randy Jusuf, admitted, “Amidst macroeconomic uncertainty, the Indonesian people show extraordinary resilience yearly. Digital platform users have become an essential part of everyday life. As the digital divide narrows, especially outside metropolitan areas, the number of Indonesian active users of digital services is projected to grow significantly. This situation will fuel further growth in this digital decade, enabling us to reach a GMV of US110 billion by 2025.
The report also disclosed multiple sectors contributed to the growth of the digital ecosystem in the archipelago, including:
- E-commerce, this sector continues to drive Indonesia’s digital economy. This sector penetration is predicted to grow, while the increasing consumer spending and general economy enhancement, with expected GMV development up to 15%, attaining US$82 billion by 2025, compared to this year at US$62 billion.
- Travel also performed the most significant increase at 68% in 2023, reaching a US$6 billion GMV value. According to the report, the lifting of mobility restrictions in the post-pandemic becomes a significant factor as it drives increased domestic demand and business travel.
- Transportation and food delivery is estimated to decrease its GMV value, becoming US$7 billion by the end of this year. Nevertheless, this sector is projected to grow with a CAGR of 13%, reaching US$9 billion in GMV in 2025 as the sector players have minimized promotions and incentives to balance this enhancement.
- Online media encountered moderate growth, with a GMV of US$7 billion and a CAGR of 5%. This sector’s GMV is expected to double to US$15 billion by 2030.
With this record, the report revealed that the archipelago is estimated to be the most prominent digital payments market in Southeast Asia, with a projected Gross Transaction Value (GTV) reaching US$760 billion by 2030. The digital payment has evolved up to 10%, attaining US$313 billion this year.
Digital loans are believed to grow to $15 billion by 2025, more than double the projected 2023 value of US$6 billion. With increasingly tight competition among digital financial service (DFS) players, the report disclosed that the pure play fintech businesses have expanded their loan services to segments that have previously relied more on non-bank financial services. Meanwhile, traditional banks are also initiating to shift their primary customer base to digital services.
“Southeast Asia’s digital economy is resilient, and the sector players have made strides towards a healthier and more sustainable economic unit. Indonesia’s economy remains the largest and most diverse in SEA. In addition to the digital payments market continuing to grow, we also believe offline-to-online behavior will boost the digital financial services sector.” The Partner and Head of Vector in SEA of Bain & Company, Aadarsh Baijal, said.
