Opinion: Areas brands in Indonesia should be building up on in the second half of 2020

The global eCommerce industry has seen 10 years’ worth of growth in just three months thanks to COVID, and Indonesia is no different. Given the country is estimated to see 50% year-on-year eCommerce growth in 2020, mobile-first will undoubtedly remain the key in 2021 as more Indonesians are getting smartphones - many ​of them for the first time. Mobile penetration in the country is currently at 60% with 92.54% of the market share belonging to Android, vastly overshadowing iOS at 7.25%. This penetration rate is expected to reach 90% by 2025. 

E-wallets such as OVO and GoPay, are also becoming more commonplace, with 37 of them registered in the country, and the rate of growth has been greatly accelerated by COVID. Digital payments via QR code are replacing cash, which is increasingly seen as a payment method that can spread contagion. Bank Indonesia recognised as much in March of this year when it ordered all digital wallet providers to use the Indonesian Standard QR code (QRIS) for one unified payment platform.

Increased mobile phone and social media usage has given prominence to social commerce. Around 76% of Indonesian merchants use WhatsApp to sell goods, and 72% use Instagram, while homegrown Indonesian platforms such as Vidio have also witnessed an  increase in user base thanks to people staying inside and streaming more. The China-based video sharing platform TikTok has had its bumps in the road, being temporarily banned in Indonesia in 2018, but now has six million monthly active users an increase of 329% active users from January to June, with average engagement time doubling between March and June.

Brands are leveraging social media platforms in creative new ways to drive revenue. Quick-build eCommerce has shown itself​ to be an invaluable tool for brands in response to the rapid onset of COVID. With new quick-built commerce features, Grab and Gojek stood out the most. Gojek has​helped over 100,000 MSMEs to expand into eCommerce  by providing solutions to digitise their marketing, order processing, payments and  shipping. Grab, on the other hand, shifted 149,000 of their drivers from ride-hailing and taxi services to delivering food and other online purchases. 

Given these new growth areas, the question now is how can brands capitalise on this period of change to prepare for the new year?

Optimising the omnichannel approach should be a priority for firms in the second half of the year. 

This means offering multiple payment options such as electronic wallets and QR code, plus diverse click and collect options so customers can buy online and pick up in store (BOPIS). The Indonesian ​Kanmo Group​, for example which is a client of ours, continues to offer multiple retail solutions to enable a frictionless and frustration-free shopping experience as customers switch between channels and devices.

Progressive Web App (PWA) technologies will help businesses offer their clients mobile services with the quality of an app and the ease and familiarity of a website. Customer data platforms are an essential part of an omnichannel system, letting companies track users across platforms, offering an uninterrupted customer experience over all channels, including social commerce channels. 

The unpredictability of the future means speed is vital when implementing an eCommerce strategy, and minimum viability products (MVPs) are at the heart of this approach. ​One of our clients, Matahari, has put in place new eCommerce growth strategy which proves that MVPs allows companies to adapt to changing market realities in real-time, while letting even those with less prior eCommerce experience compete in a progressively online retail environment.  

The latest technologies will enable firms to be ready for 2021, but only if they are used in a targeted way to support the processes and help the people that form the core of all companies. Only in this way can businesses grow in tandem with, and have the chance  to shape the future of, Indonesia’s digital ecosystem.

The writers are CEO Thai Son Nguyen and Asia MD Jack Tran at SmartOSC.