Indosat Ooredoo Hutchison in collaboration with Twimbit reveals the 4 pillars of Indonesia’s digital economy, which consist of e-commerce, fintech, mobility, and digital media.
Heaptalk, Jakarta — Indosat Ooredoo Hutchison (IOH) launched a digital economy study entitled Empowering Indonesia 2023 to mark 365 days after the merger of Indosat Ooredoo and Hutchison 3 Indonesia on January 4, 2022 (1/4). The results of this collaborative research with a research firm Twimbit are expected to be a reference for all digital telecommunications industry players toward the vision of Indonesia 2045.
IOH and Twimbit’s research reveals the 4 pillars of Indonesia’s digital economy, which consist of e-commerce, financial technology (fintech), mobility, and digital media. Overall Indonesia’s digital economy is valued at Rp1,408 trillion in 2022 and is estimated to grow 18% in 2027 reaching Rp3,216 trillion.
The e-commerce pillar contributes Rp877 trillion in 2022 and is predicted to reach Rp1,845 trillion in 2027 or grow by 16%. The financial technology pillar is valued at Rp390 trillion in 2022 with the contribution of e-commerce transactions through e-wallets reaching Rp143 trillion. In 2027, fintech is predicted to grow 26% to reach Rp1,254 trillion with an e-commerce transaction through an e-wallet contribution of Rp429 trillion.
Meanwhile, the mobility pillar reached Rp196 trillion in 2022 and is expected to grow 12% in 2027 to reach Rp348 trillion. Digital media contributes Rp88 trillion in 2022 and is predicted to grow to Rp198 trillion or grow 17% in 2027.
According to the research, multiple digital infrastructures have attracted high-value foreign direct investment. ICT infrastructure projects, spanning Palapa Ring Project, Base Transceiver Station (BTS) tower, and Satria Satellite Project, became the backbone to grab investments in technology.
Indonesia’s foreign direct investment (FDI) reached $20 billion in H1 2022, an increase of 33% compared to the same period in 2021. Several well-known companies put large investments, including Hyundai’s $1.55 billion in electric vehicle (EV) manufacturing, LG’s $1.1 billion in the production of EV batteries, and AWS’ $5 billion in the construction of data centers and other facilities to fuel digital transformation in Indonesia.
Seven drivers of Indonesia’s digital economy growth
In general, Empowering Indonesia 2023 contains the landscape of Indonesia’s digital economy, drivers of digital economic growth, pillars of the digital economy, technology that accelerates transformation, and the empowerment of Indonesian people by IOH.
President Director and CEO of Indosat Ooredoo Hutchison Vikram Sinha said, “We have gone through 365 days, and many initiatives have been carried out in IOH’s efforts to meet our larger purpose. We express our gratitude for the support and trust of all parties so that IOH can be the main part of increasing industry and Indonesia’s economic growth. This is a great start to IOH’s journey ahead, and we will continue to focus on delivering marvelous customer experiences.”
Further, Vikram delivered that digital technology is presumed to be able to support Indonesia’s GDP. This belief stems from rising internet penetration with the digital economy forecasted to contribute roughly 14% of GDP in 2027, an increase of 6% from its value in 2022. Currently, internet penetration in Indonesia has reached 77% and is predicted to reach 86% in the next 5 years.
“IOH, in partnership with all stakeholders, has an unwavering commitment to playing an important role in accelerating the nation’s digital transformation agenda, which will eventually contribute to the growth of Indonesia’s digital economy,” said Vikram.
The research also explained seven drivers of Indonesia’s digital economy growth, spanning untapped rural potential, a growing middle-income class begets growing economic benefits, the great revolution of micro and small enterprises, bringing large and medium enterprises into the future, inspiring widespread digital innovation with tech start-ups, the changing landscape of national digitization, and building a stronger foundation for the digital economy with digital talents.
“Drive Indonesia’s digital economy requires collaboration from various parties, and IOH wants to be the key agent collaborator for now and in the future. Together, let us embrace the spirit of cooperation to realize the dreams and aspirations of every Indonesian,” concluded Vikram.
