In a country with over 175 million internet users, it is no surprise that there is also a high level of social media engagement in Indonesia. Last year alone, the country saw a 12 million increase in people using platforms for social interaction, bringing the total to a massive 160 million by January 2020. This increase puts the country 10% above the global average for social media penetration, with 59% of the population accessing platforms such as Facebook, Instagram and Twitter.
With a ready-made audience, are retailers and tech startups in Indonesia cashing in on the ever-growing social media population? We look at how some startups in Indonesia are engaging with this tech-savvy demographic to win customers and increase sales using the current social commerce trends.
The growth of online commerce in Indonesia
With increased access to the internet, thanks to smartphones and growing WiFi connections, Indonesia’s eCommerce scene has blossomed in the last few years. Rising eWallet usage and platforms such as Tokopedia, Shopee and Lazada have made online purchasing accessible, affordable and secure. These and many other eCommerce providers have seen a massive increase in revenue as a result of the way that local purchasers have integrated online shopping into their everyday lives. With over 86% of internet users aged 16-64 already buying online, it is natural that retailers and service providers seek to expand their potential to make money through online sales.
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This love affair with shopping on laptops and mobile phones is likely to continue to grow in the coming years, with consultancy giants, McKinsey & Company, predicting the market will be worth $40 billion USD in the next few years. The COVID-19 pandemic has given eCommerce a boost too as more consumers turn to their devices to make purchases and avoid having to spend time in bricks and mortar shops. In particular, grocery looks like one sector set to benefit. Now, many eCommerce platforms are hoping to build on this upswing in online retail activity by using engagement tactics such as gamification, live product demonstrations and social media to start conversations that end in sales. As eCommerce platforms become more socialised, the reverse is also happening with social media becoming an ever-more essential sales portal.
The expanding role of social commerce
While social commerce has been relatively slow to take off in Indonesia and may have even been in decline until recently, the global pandemic has possibly provided the lifesaving jumpstart it needed. By implementing new methods and engaging more with customers through social media, many companies and individuals are starting to see business and revenues increase.
With more people working from home and also spending more time indoors than usual, social media has become somewhat of a lifeline to the world outside. Staying connected with family and friends while social distancing has led to a heavier reliance on the internet, and offered an increased opportunity for businesses to market to their target audiences.
Using micro-agents to engage with customers through social media is one method embraced by eTailers in Indonesia. This approach allows suppliers and tech startups to reach wider audiences. Platforms such as Kaskus and RateS are making selling to your network easier. Kaskus offers a “buy and sell” section alongside its news and community forums opening the door for people to connect and shop all on one platform. RateS, on the other hand, helps users to blend their virtual stores with their online lives by supplying ready to sell products that they can promote to their friends.
With the current trend for purchasing grocery, household and personal care items online, platforms such as Chilibeli and Woobiz are likely to see an increase in traffic. These two mediums focus mainly on women working in the home and utilise their networks and communities to sell and resell beauty products, household goods and groceries.
By removing the need to physically go to a marketplace to sell fresh produce, Chilibeli gives growers a ready market and allows busy people to purchase quality, fresh ingredients from their home or workplace. Similarly, Woobiz offers an income-earning opportunity through the resale of products and helps to educate and train sellers in the art of eCommerce.
As the country continues to deal with the fallout of the pandemic, they can take some comfort knowing that their economy should be salvageable. This is partly thanks to a robust support system for tech startups in Indonesia, a population eager to spend time online and social commerce trends increasing B2C engagement and sales. If they can continue to pivot and embrace the new methods of selling online, startups in Indonesia should have a healthy future. Newly formed or increased habits to make purchases online are likely to become ingrained in the way of life for most Indonesians.