Indonesia's Digital Economy Predicted to Continue Strengthening Thanks to E-commerce

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Adi Ahdiat 27/10/2022 17:00 WIB

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Google, Temasek, and Bain & Company predict that e-commerce will be a major driver of Indonesia's digital economic growth.

Indonesia's Digital Economy Value Projection (2019-2025)

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Indonesia's Digital Economy Value Projection (2019-2025)

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According to Google, Temasek, and Bain & Company, the growth of Indonesia's digital economy in the next few years will be driven by e-commerce.

"Indonesia's digital economy was valued at approximately US$77 billion in 2022 and could reach US$130 billion in 2025, with e-commerce as the main driver," they stated in their *e-Conomy SEA 2022* report.

The report notes the value of the digital economy in Southeast Asian countries based on gross merchandise value (GMV), which is the total value of goods and services sold within a specific period.

For Indonesia, the largest GMV in 2022 came from the e-commerce sector, namely US$59 billion.

Other digital economy sectors, namely online transportation and food delivery services, travel booking, and online media, each had a GMV of less than US$10 billion.

Despite the very positive projections, Google, Temasek, and Bain & Company stated that there are macroeconomic challenges that could potentially burden future growth.

"With economic slowdown and a weakening labor market, consumer non-essential spending will decrease," they said.

"Inflation in fuel and food prices, as well as the depreciation of Southeast Asian currencies, are driving up transportation and food delivery costs. The limited availability of products due to pandemic policies in China is also hindering logistics and reducing consumer access to goods," they continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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