Indonesia's US$22b social commerce future: How live shopping is reshaping retail

In Indonesia, social commerce has gone from a supporting act to the main stage — redefining how consumers discover, engage with, and purchase products online. Once a fringe channel, it now accounts for a significant share of the country's eCommerce landscape, projected to reach a gross merchandise value of US$22 billion by 2028. 

This transformation is powered by video-first commerce, community trust, and an audience that increasingly shops for entertainment. The country's unique blend of high mobile penetration and a deeply rooted community culture also plays a part, positioning it as a leader in the region's social commerce revolution.

To understand the landscape, MARKETING-INTERACTIVE spoke with industry experts Arfitrianto Zulnaini, country head of Indonesia and Malaysia at Integral Ad Science (IAS), and Vitya Vijayan, global head of search and social at M&C Saatchi Performance, who shared insights into the trends shaping this market.

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"Indonesian shoppers prefer social commerce over traditional eCommerce due to factors such as personalised recommendations, real-time engagement and an integrated browsing-to-buying experience," said Zulnaini.

"Well, shopping is no longer just about finding the best price or product; it has become an entertainment," added Vijayan.

The power of 'shoppertainment' and live shopping

Social commerce in Indonesia has seen exponential growth, accounting for 79.5% of digital transactions in 2024, said IAS. 

A defining feature of Indonesia's social commerce is "shoppertainment", where content, community, and commerce merge to drive engagement and impulse purchases, M&C Saatchi Performance added. This includes short-form videos, influencer marketing, and livestream shopping, which have become core strategies for brands looking to capture audience attention.

"Live shopping is a key driver of engagement, with six in 10 Indonesians making purchases through live platforms in 2024," Zulnaini explained. Vijayan echoed this sentiment, stating, "Live shopping is now a staple in social commerce. Conversion rates are up to three times greater on live-streaming platforms compared to traditional eCommerce."

Beyond entertainment, live shopping also fosters trust—a critical factor for Indonesian consumers. "Real-time product demonstrations and endorsements go a long way in establishing credibility," added Zulnaini. Influencers, in particular, play a vital role in driving purchase decisions, as Indonesian consumers seek authenticity before committing to a buy.

This isn't just a marketing gimmick — it's reshaping consumer expectations. It bridges the gap between seller and buyer in a way static product pages never could.

"If a product feels real, tested, and recommended by someone they trust, they're more likely to convert," Vijayan concluded. The format resonates deeply in Indonesia, with 83% of consumer participating in online live shopping.

This shift explains why influencer marketing spend in Indonesia rose by 18.8% to reach US$190 million, and why 51.6% of consumers rely on reviews as part of their decision-making process.

TikTok Shop: From upstart to ecosystem core

Indonesia ranks as one of the largest markets for TikTok Shop in the region. With over 100 million TikTok users in the country, the platform has fundamentally reshaped how Indonesians shop online, integrating entertainment, discovery, and purchasing into a single experience.

Since its 2021 launch, TikTok Shop has become the most dominant platform in Indonesia's social commerce scene, boasting 22 million active users — even surpassing Shopee, M&C Saatchi Performance said. Its merger with Tokopedia in 2023 further solidified its central role in the market.

This, of course, has benefited small businesses, which have leveraged TikTok Shop to expand their reach and drive direct sales. In Indonesia, 86% of consumers have used social media for shopping, with 40% engaging in social commerce regularly, IAS said.

TikTok Shop and similar platforms have made shopping seamless, letting users browse, learn, and buy all within one app. The appeal isn't just in convenience—flash deals, bundled offers, and smart pricing tactics continue to spark impulse buys, said Vijayan.

Then, there's the growing popularity of video content. The reason why TikTok Shop is leading the charge is because video-first commerce work, she said. In Southeast Asia, more than 40% of online shoppers now turn to video content as part of how they decide what to purchase.

"Video commerce has completely reshaped eCommerce, now accounting for 20% of total online sales, up from less than 5% in 2022. eCommerce itself is also picking up speed again, growing 15% year-on-year, and much of that growth is thanks to video-based shopping," Vijayan said. 

"Consumers are actively using video content to make purchase decisions. TikTok's algo-driven discovery makes it easier for brands to get in front of the right audience at the right time."

Fast growth, high engagement — but still evolving

Social commerce isn't just growing — it's outperforming traditional digital marketing. Social ads see an average engagement rate of 21.7%, compared to 14.1% for banner ads. And with fashion, beauty, and home appliances topping purchase categories, the verticals benefiting most are those that thrive on visual content and peer validation.

Yet experts agree: the space is still maturing. There's room for better measurement, smarter campaign optimisation, and more robust platform data — especially as Indonesia's internet user base climbs past 185 million.

Nevertheless, Indonesia's social commerce boom stands out from neighbouring markets. Unlike Singapore, where brand-led experiences dominate, Indonesia thrives on community-driven, influencer-powered ecosystems, often led by SMEs and local sellers.

The purchasing experience is highly integrated and seamless, with platforms offering chat support, instalment plans, and "buy now, pay later" options that make the channel accessible across income levels.

The emotional component is also strong. FOMO (fear of missing out) and active community discussions during livestreams encourage real-time purchases and repeat engagement — often blurring the line between shopping and socialising.

For marketers, the key takeaway is clear: social campaigns need to be measured, optimised, and tailored to an engaged audience. "If you're not investing in social commerce in Indonesia, you're missing out on one of the fastest-growing digital retail opportunities in the world," Vijayan said.

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