Indonesia E-commerce: Booming digital industry attracts Chinese investors
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As Southeast Asia's largest economy, Indonesia is seeing itself come out on top in the digital sector. Hundreds of e-commerce companies have sprung up in the past 4 years, quickly improving the country's economy. Chinese investors are now looking to invest in sectors other than shipping and manufacturing. CGTN's Silkina Ahluwalia reports.
With more than 130 million internet users in the country, Indonesia is becoming one of Asia's largest smartphone markets. As people's spending habits continue to shift online, Indonesia's e-commerce market is projected to reach 45 billion US Dollars in 2025, coming in third behind China and India. President Joko Widodo has a vision to make Indonesia the "Digital Energy of Asia", further supporting and enhancing the digital industry, especially the e-commerce market.
THOMAS LEMBONG, CHAIRMAN INVESTMENT COORDINATING BOARD "The e-commerce sector and digital economy has, just in the last 3 or 4 years, gone from very small to suddenly accounting for 15 to 20 percent of our total annual FDI so I estimate that annual FDI or inflow into the e-commerce industry amounts to 2 to 3 billion US dollars every year now."
A recent study shows that foreign investments can help Indonesia achieve its economic growth rate of more than 5 percent this year. The e-commerce sector is expected to be the new driver for that growth.
BHIMA YUDHISTIRA ECONOMIC ANALYST "We see that in the last three years at least 10 e-commerce start-ups in Indonesia injected by foreign investors especially from China. That's why in 2017, the data around 4.8 billion US dollars total investment, direct and indirect investment, were made to local start-ups."
The e-commerce sector alone is growing 20 to 25 percent per year, largely credited to Chinese investors.
THOMAS LEMBONG, CHAIRMAN INVESTMENT COORDINATING BOARD "Chinese e-commerce companies and Chinese digital companies are among the most sophisticated and the most advanced and of course, among the largest technology companies in the world. China is also the largest economy in Asia and a direct neighbor of Indonesia. I think the booming trend of Chinese digital companies, technology companies and e-commerce companies coming to Indonesia is highly natural and strongly welcome."
The increase in the number of Chinese investors in Indonesia is proof that the two countries are continuously working closely together in hopes to achieve stronger economies. Silkina Ahluwalia, CGTN, Jakarta.