How Online Commerce Contributes to Indonesia’s Development
Online commerce makes socioeconomic impact in Indonesia.

McKinsey recently launched a report that explores the impact of online commerce in Indonesia titled “The Digital Archipelago: How Online Commerce is Driving Indonesia’s Economic Development”.
Here are some of the significant impacts of online commerce to Indonesian society:
8x growth on spending
The study projected that spending in Indonesia will grow 8x from 2017 to 2022, from $8 billion of spending in 2017 to $55 to $65 billion by 2022.
Empowering women and broadening financial inclusion
35% of online retail revenue is generated by women, while women only generate 15% of the revenue in offline retail. This breaks the paradigm that women cannot contribute much to the growth of the economy.
Growing rate of new to above 30%.
Online commerce delivers more choices, greater accessibility and more competitive prices for consumers. Consumers outside Java generally save 11%-25% when buying online.
Growth will be driven by more smartphone users and the increasing purchase power of Indonesians.
26 million jobs by 2022
Digital commerce has created 4 million jobs, both directly and indirectly but will directly or indirectly support about 26 million jobs by 2022.
Direct support includes new jobs that would not have existed otherwise. For example, programmers at online commerce companies and positions at logistics companies.
How to maximize the potential of online commerce?
McKinsey says Indonesia has to address three fundamental challenges to maximize the potential of online commerce:
1.Talent shortages in the digital arena, such as digital professionals, digital facilitators, and digital-savvy leaders.
2. More midsize to large companies that could capture domestic consumption or export opportunities.
3. Lack of tracking methods to monitor the impact of digital on Indonesian society.
Addressing these three broad issues will accelerate Indonesia’s progress in the digital economy in a more sustainable manner.
Read the executive summary of McKinsey’s study report: http://bit.ly/McKinsey-TheDigitalArchipelago

