The digital archipelago: How online commerce is driving Indonesia’s economic development

02 October 2018

E-commerce has become a lifeline for many developing Asian countries by helping SME growth and making products and services available and accessible to consumers across the region. This McKinsey report outlines research on how e-commerce has powered Indonesia’s economic development and how it can continue to benefit this economy in the future.

Indonesian consumers are enthusiastic users of social media and smartphones, and the country has seen significant business opportunities rise due to greater connectivity, growing social commerce and improved access to services. However, challenges such as fear of and aversion to technology and online shopping still remain and slow the progress of e-commerce. In order for e-commerce to develop further and to create significant opportunities and benefits, businesses need to help to improve logistics and infrastructure within the supply chain. There is also a growing need for seamless, secure and scalable payment opportunities (especially cashless payments) and a professional and digital commerce ecosystem comprising micro, small and medium enterprises (MSMEs). Businesses can also help by encouraging a strong local talent pool and creating a healthy investment climate. By learning about the e-commerce landscape in Indonesia and taking steps to participate in its development, businesses can also create further opportunities for themselves as Indonesia’s economy grows and prospers.

Read the full report on the McKinsey & Company website.

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