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Indonesia has emerged as one of the most rapidly expanding e-commerce markets worldwide, according to a recent report by Google, Temasek, and Bain & Company, e-commerce in Indonesia is projected to reach a market value of $82 billion by 2025 with a compound annual growth rate (CAGR) of 35% per year.
This increase is accompanied by a substantial increase in online shoppers, making Indonesia a suitable market for online businesses.
This article provides valuable strategies for sellers looking to thrive in big online platforms and take advantage of the exciting opportunities in E-commerce in Indonesia.
What are the factors driving the market growth of e-commerce in Indonesia?
The E-commerce market in Indonesia has experienced rapid growth due to many factors.
Broadband access in Indonesian villages
The Indonesian government has actively supported the growth of e-commerce in the country by launching initiatives like the “100,000 Broadband Villages” program in 2020. This program aims to improve internet access in rural areas, bridging the digital divide and enabling rural communities to participate in e-commerce.
With a large and growing number of internet users in Indonesia, reaching approximately 224 million in 2022 and projected to reach around 270 million by 2028, the potential consumer base for e-commerce is significant.
Additionally, the government has implemented training programs in collaboration with the Ministry of Cooperatives and SMEs.
These programs provide digital skills training and workshops to empower SMEs, guiding them on effectively using e-commerce platforms to sell their products and services online. One such program is the “Digital Talent Scholarship” program.
Warung culture and digitalization
Traditional small-scale shops in Indonesia, known as warungs, are now part of the e-commerce platforms. They partner with warungs to use them as pickup points and delivery hubs for online orders. This collaboration expands the reach of online shopping, especially in areas with limited delivery services.
By leveraging the existing warung infrastructure and trusted local presence, e-commerce platforms provide convenience and accessibility to customers, combining online shopping with traditional retail.
How to become a merchant on marketplaces in Indonesia
In Indonesia’s e-commerce market, Shopee and Tokopedia are the dominant players, leading the e-commerce landscape in Southeast Asia based on monthly web sessions as of the second quarter of 2022.
Indonesians trust these marketplaces due to their strong brand reputation, buyer protection programs, and convenient payment options. Being a successful seller on these platforms requires careful planning, strategic execution, and a deep understanding of the platforms themselves.
Following are the steps to help you become a successful seller in these popular marketplaces in E-commerce in Indonesia.
Step1# Account setup
Before you can start selling on popular Indonesian marketplaces like Shopee and Tokopedia, you must complete a few essential steps to ensure a smooth onboarding on these platforms.
- Registering a company
To sell on Shopee and Tokopedia, you need to have a registered company(PT PMA) in Indonesia.
- Indonesian bank account
You need an Indonesian bank account to receive payments from customers and make necessary transactions with the marketplace.
- Tax identification number (NPWP)
Obtain a tax identification number (NPWP) from the Indonesian tax office. This is required for tax purposes and ensures compliance with the local tax regulations.
Emerhub streamlines the process by assisting you through company registration, bank account setup, and NPWP acquisition, ensuring a successful entry into the increasing Indonesian e-commerce landscape. Get in touch today to get started.
Shopee and Tokopedia registration process
Registering as a vendor on these marketplaces includes the following steps.
- Visit Shopee or Tokopedia website or app
Go to Shopee or Tokopedia’s website or download their apps on your mobile device.
- Fill out personal and business information
Provide your personal details, such as name, address, and contact information. Additionally, fill out your business information, company name, and registered address.
- Upload required documents
Upload the required documents including your ID card (KTP), and your NPWP to verify your identity as a seller.
- Agree to terms and conditions
Read and agree to their terms and conditions, which outline the rules and guidelines for selling on their platform.
Step 2# Managing your store
Managing your store well is essential for success in the competitive marketplace. Once you’ve established your presence on platforms like Shopee and Tokopedia, effective store management becomes essential.
- Listing products
Once approved as a seller on either platform, you can start listing your products. Provide accurate and detailed product descriptions, attractive images, and competitive prices to attract potential customers.
- Order and inventory management
Regularly monitor your orders and manage your inventory to ensure a smooth fulfillment process.
- Promotions and marketing
Take advantage of promotional campaigns and marketing tools offered by Shopee and Tokopedia. Utilize features like discounts, vouchers, and sponsored placements to increase your product visibility and attract more customers.
Step# 3 Fulfillment options
Efficient fulfillment is required for running a successful online business on marketplaces like Shopee and Tokopedia. There are two main fulfillment options to ensure a smooth and satisfactory experience for your customers.
- Self-fulfillment
You can handle your products’ storage, packing, and shipping independently. Ensure efficient packaging and reliable shipping methods to deliver products promptly and securely.
- Shopee or Tokopedia’s fulfillment services
Both Shopee and Tokopedia offer fulfillment services (FBS for Shopee, and TOPEDS for Tokopedia) that handle storage, packing, shipping, and even returns and refunds. Consider using these services to streamline your operations and enhance customer satisfaction.
Tips for success on Indonesian Marketplaces
Here are some valuable tips to help you stand out and achieve success.
- Identify your unique selling proposition (USP) to differentiate yourself from competitors.
- Incorporate relevant keywords, accurate categorization, and detailed specifications for better visibility.
- Prioritize timely responses to customer inquiries and messages to build trust and positive relationships.
- Establish clear policies for shipping, returns, and refunds to ensure transparency and customer satisfaction.
- Take advantage of Shopee and Tokopedia’s advertising options to increase product visibility.
- Collaborate with influencers and run social media marketing campaigns for broader reach.
Unlock the market potential of e-commerce in Indonesia
Emerhub assists you to become a successful seller on big online marketplaces in Indonesia’s increasing e-commerce industry.
Our team provides expertise in e-commerce, legal and compliance support, localization and market entry strategy, logistics, and supply chain management. Additionally, we provide consultation on digital marketing and customer acquisition, as well as data analytics and performance tracking.
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