Indonesia's online shopping $150 billion in 2020

Bank Indonesia (BI) reports Indonesian online shopping reaches Rp75 trillion (US$5.6 billion) in 2016 or every person spends Rp3 million (US$225) per year if it is shared by the average internet users who shop online. The central bank also projected that online transactions would rise to Rp1,995 trillion (US$150 billion) by 2020 or 10 percent of Indonesia's GDP.

Tinuku Indonesia's online shopping $150 billion in 2020

"Growth of digital-based startup is tremendous in the trade sector of goods and services, modes of payment, and financing. The number of internet users who shop online last year reached 24.73 million people," said BI Governor Agus Martowardojo on Wednesday.

Martowardojo said the utilization of the digital revolution in the economic activities of the community led to a growth of 7.00 percent or well above the current national economic growth of 5.01 percent. Indonesians are beginning to shift from conventional to digital consumption patterns in e-commerce and fintech most to the blessings of the digital revolution.

"The digital revolution has also touched the financial sector as the number of financial technology firms in Indonesia in 2015-2016 grew 78 percent," Martowardojo said.

Martowardojo said the potential utilization of the digital revolution and Big Data services is huge. However, many Indonesians have not yet benefited from the digital revolution. The ratio of internet users and population in Indonesia in 2016 is 51 percent or very low.

The ratio well below Japan is already above 90 percent, Malaysia at 71 percent and Thailand at 67 percent. The main cause is the quality of internet service that lags behind other countries. Another obstacle is investment in the field of information technology (IT) is low.

"IT investment in key sectors contributing to economic growth, such as manufacturing and mining is still relatively low, in fact, tend to be lower compared to countries in the same group," Martowardojo said.

Several central banks, including Bank Indonesia in recent years, have built Big Data optimization services to strengthen monetary decision making processes, financial markets, financial system stability, payment systems and money management.

"We believe that this ongoing digital revolution, if put to good use, will bring Indonesia to a trajectory of economic growth of about 7 percent per year," Martowardojo said.