Transportation and Warehousing PDB Nears Rp 100 Trillion

The emergence of internet technology has transformed people's lifestyles, one of which is how they shop. The digital era has given rise to a new phenomenon: online shopping, a shift from the previous offline model (consumers buying goods at the seller's location). The proliferation of online shopping, coupled with the growth of the middle class and millennials—the target market for marketers—will boost the logistics sector's economy.

Data from the Central Statistics Agency (BPS) recorded that the Gross Domestic Product (GDP) of the transportation and warehousing sector in the second quarter of 2017 reached Rp 99.46 trillion, growing by 8.37 percent compared to the same quarter of the previous year. The land transportation sub-sector still dominates, accounting for more than 55 percent of the total GDP of transportation and warehousing. This is followed by the air transportation sub-sector at 17.5 percent of the GDP. Then comes the warehousing sub-sector; supporting transportation services; post and courier services at 15.7 percent.

The surge in online shopping has driven the growth of the warehousing sector; supporting transportation services; post and courier services by 4.83 percent in the second quarter of 2017 compared to the previous quarter (MoM) and also grew by 7.96 percent compared to the second quarter of 2016 (YoY). According to a Nielsen report, Indonesia's e-commerce market only reached US$ 1.68 billion or 1.2 percent of total retail sales worth US$ 145.8 billion. However, it is projected to reach US$ 46 billion by 2025, or about 8 percent of the domestic retail market.