A Healthy Future for Online Retail in Indonesia?

A Healthy Future for Online Retail in Indonesia?

December 2016
By David I. Feygenson, SeniorAnalyst, VanEck

Indonesia is not only the fourth most populous nation in theworld after China, India, and the U.S. respectively, but it is also the fastestgrowing and largest online retail market in the Asean¹⁾ region. Despite this, however, B2C online retail sales account for only 0.2% ofworld’s total.

According to research from CLSA, in addition to theattraction of a very large population, of whom around 50% are under the age of30 years, increased smartphone and 4G penetration should provide a major boostto online retail in Indonesia. Other factors underpinning the very realpotential for significant growth in online retail in the country are bothrising income levels, and a still low level of organized offline retail.

It will be interesting to see, in five years’ time, just howB2C online retail has taken off in Indonesia.

Indonesia: Total B2C Online Retail Sales
(excluding Tax)

Source: CLSA and Euromonitor

About the Author:

David I. Feygenson (MS, Finance andEconomics, London School of Economics; BS, Economics, The Wharton School,University of Pennsylvania) is a Senior Emerging Markets Equity Analyst at VanEck. Mr. Feygenson has over a decade of buy-side investment experienceand previously held positions at Wellington Management Co and Mirae AssetGlobal Investments.

The articleabove is an opinion of the author and does not necessarily reflect the opinionof MV Index Solutions or its affiliates.

Footnotes:

¹⁾ Asean – Association of Southeast Asian Nations: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam

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