Hundreds of e-commerce companies have descended upon Indonesia in the past four years. The increase is largely thanks to Chinese investment. It’s expected to drive the country’s economic growth.
CGTN’s Silkina Ahluwalia reports.
With more than 130 million internet users in the country, Indonesia is becoming one of Asia’s largest smartphone markets. As people’s spending habits continue to shift online, Indonesia’s e-commerce market is projected to reach $45 billion in 2025, coming in third behind China and India.
President Joko Widodo has a vision to make Indonesia the “Digital Energy of Asia”, further supporting and enhancing the digital industry especially the e-commerce market.
“The e-commerce sector and digital economy has, just in the last three or four years, gone from very small to suddenly accounting for 15 to 20 percent of our total annual FDI so I estimate that annual FDI or inflow into the e-commerce industry amounts to two to three billion U.S. dollars every year now.” said Thomas Lembong the Chairman of Investment Coordinating Board.
A recent study shows that foreign investments can help Indonesia achieve its economic growth rate of more than five percent this year. The e-commerce sector is expected to be the new driver for that growth.
“We see that in the last three years at least 10 e-commerce start-ups in Indonesia injected by foreign investors especially from China. That’s why in 2017, the data around $4.8 billion in total investment, direct and indirect investment, were made to local startups.”, said Bhima Yudistira an economic analyst.
The e-commerce sector alone is growing 20 to 25 percent per year, largely credited to Chinese investors.
“Chinese e-commerce companies and Chinese digital companies are among the most sophisticated and the most advanced and of course, among the largest technology companies in the world. China is also the largest economy in Asia and a direct neighbor of Indonesia. I think the booming trend of Chinese digital companies, technology companies and e-commerce companies coming to Indonesia is highly natural and strongly welcome,” said Thomas Lembong the Chairman of Investment Coordinating Board.
The increase in the number of Chinese investors in Indonesia is proof that the two countries are continuously working closely together in hopes to achieve stronger economies.