TEMPO.CO, Jakarta - Indonesia is slowly becoming the largest digital economy in Southeast Asia. Two years ago, just 7.4 million had shopped online, with transactions totaling Rp48 trillion. Last year, this increased to 11 million online shoppers with transactions totaling Rp68 trillion. It is estimated that this year's total online shopping transactions will reach Rp95.48 trillion.
Those numbers are just for online sales (e-commerce). This growth in digital-based startups has attracted the government's attention. Minister of Communication and Informatics Rudiantara still recalls when he said two years ago that there would likely be five unicorns in Indonesia in 2019. "At that time, I was asked this by the top people of venture capital companies in Silicon Valley, United States," said Rudiantara, on Monday last week. "I just said there would be five. I didn't know where they would come from."
As it turned out, the growth of the digital economy surpassed all predictions. E-commerce, whether as commercial advertising, retail, and online malls, has grown rapidly. It is estimated that such transactions will account for 3.1 percent of the retail market this year. Transactions conducted through financial technology or fintech have reached Rp252 trillion, most of which come from digital payments. E-travel, represented by mobility and travel businesses, has contributed Rp105.798 trillion this year.
The rapid digital economic growth has seen four startups reach unicorn status- companies valued at over US$1 billion. The latest to achieve this title is Bukalapak.com, an online market started by Achmad Zaky. "I cannot yet say who invested in Bukalapak," said Zaky, on Thursday two weeks ago in Jakarta. "The main point is that Bukalapak's valuation is over a billion dollars." Bukalapak is in the same class as Go-Jek, Tokopedia, and Traveloka, which already received millions of dollars of investments.
It is this promising growth which has led Tempo to put together projections for the digital economy in 2018. Plenty of research predicts that consumption and investment in the digital economy will rescue the economy next year. In 2016, the information and communication sector grew by 8.87 percent. As of the third quarter of this year, it has grown by 9.35 percent. These figures would be higher if other sectors which utilize information and technology were to be factored in.
Signs that the digital economy could drive economic growth next year can already be clearly seen this year. Research done by Google with A.T. Kearney released in September indicates that the value of investments in digital-based startups reached Rp40 trillion in the first half of this year. This figure surpassed the value of investments in the food and beverage sector. Local and global investments in startups are only less than capital outlays in the mining and oil and gas sectors. Of course, that Rp40 trillion figure does not include the investment received by Bukalapak.
Read the full article in this week's edition of Tempo English Magazine