Future Growth of Indonesia E-Commerce Logistics Market: Ken Research

Overview for Indonesia E-Commerce Logistics Industry

The E-Commerce logistics market in the Indonesia is one of the growing markets in the country due to increasing demand for e-commerce. Fast growing of middle class population, high consumer confidence, changing consumer preferences, growing number of financing options, increase penetration of internet and smartphone has pushed demand for e-commerce leading surging demand for e-commerce logistics as well.

The industry is witnessing huge investments by e-commerce players in logistics to ensure time bound delivery. Jakarta, Surabaya, Sulawesi, Bandung, Kalimantan are they key hubs for demand and supply of e-commerce logistics. Emerging business opportunities in the market has led to entry of new players in the market. The COVID-19 pandemic has also pushed the demand in the market as need for social distancing has forced people to rely on online shopping.

With launch of new retail products, continuous infrastructural developments by the government, surging e-commerce demand for diversified product categories, the market has been taking initiatives in order to attract investments in the market. Indonesia medium and small enterprises accounts for 57% GDP have transformed their business from offline to online leading to e-commerce growth in the country. Further novel fintech platforms are leveraging data and technology to offer attractive finance assistance to consumers and retailers which has also boosted e-commerce growth in the market.

Logistics costs pose a challenge in the industry due to landscape hurdles and poor infrastructure especially in remote areas. Shipping in domestic region is expensive than shipping from Indonesia to foreign countries. Landscape hurdles and inadequate infrastructure has also led to high delivery time. Majority of the shipments are delivered in 2-3 days and the share of same day shipments is very less. Inadequacy of infrastructure has restricted the islands to operate in a self-sufficiency manner which has encouraged more of intra-city delivery. Jakarta, Bandung and Surabaya are the major regions from where the products are produced and shipped to different regions of the country. Jakarta is the key demanding region due to high internet and smart phones penetration and high population in the region.

The e-commerce industry in Indonesia witnessing a huge demand during 2020 owing to the COVID-19 outbreak resulting in the change in consumer buying behavior who are now willing to shop online to avoid stepping out.

Surging demand of instant and same day deliveries of e-commerce shipments from the millennium is contributing to the growth of e-commerce logistics companies in Indonesia.

Companies such as Blibli, Lazada, Shopee are having their in-house logistics in Indonesia. The market is anticipated to witness a surge in the number of e-commerce companies having their in-house logistics in next few years.

Flexibility and cost advantage through economies of scale are reasons why in-house logistics is preferred by e-commerce companies

Indonesia’s govt. revised the investment rules in 2016 following which the e-commerce industry recorded huge investments from companies such as Expedia, Alibaba and others.

In line with the moderately fragmented nature of the market, logistics tech is emerging as the next demanded industry. Logistics Tech is expected to fill the gap in the logistics services in Indonesia. Route planning, blockchain, automated sorting, data analytics tool, WMS is expected to reduced delivery time and logistics costs. Growth of the logistics companies is expected to rely on the adoption of merging technologies. The market is expected to witness strong collaboration

Key Target Audience:

3PL Logistics Companies

Integrated Logistics Companies

E-Commerce Marketplace Platform

Retail Companies

Logistics/Supply Chain Industry Associations

Time Period Captured in the Report:

Outlook Period: 2019 to 2025

E-Commerce Logistics Companies Mentioned:

Lazada Express

JNE

Sicepat