Analysis – Indonesia Online Markets & Payments
As Southeast Asia and its countries continue developing on the road of becoming some of the world’s leading countries, it also begins to be more accepting of online markets and payments, nurturing both to facilitate the demands of their people. Here we will take a look at one of the biggest GDP earners in Southeast Asia, which is Indonesia.
Having boasted an estimated population of 261 million, Indonesia is an archipelago with one of its islands, Java, being listed as the world’s most populous islands in 2010 by Guiness World Records. Indonesia is also ranked as 4th in the world’s most populous countries, and has at least 143 million people using the Internet. The user count for mobile phones is even higher, with an expected amount of 184 million people who will be using them by the end of 2018. Along with these trends, the online markets and payments community in Indonesia has been growing as well, as shown by the presence of various online markets and payment providers, some of whom we will talk about below:
Probably one of the most famous online marketplaces for Indonesians, Tokopedia has successfully made their presence known. These days, even people who haven’t heard of them might probably start using their platform, because their ads are just everywhere: on your TV, radio, and newspaper. Since receiving a US $1.1 billion investment from Alibaba, they have become even more aggressive. These days, if you go to a cinema that’s run by the 21 Cineplex network, chances are high that you might encounter one of their ads, proudly displayed on the big screen before you get to watch your favorite movie.
Tokopedia remains as the strongest local player, with more than an estimated 111 million monthly visits. They have also implemented their very own digital wallet and payment system which is called TokoCash, along with their already existing credit card application feature. They are taking things a step further, by not only selling products, but helping their users to apply for loans and making investments. With all these reasons, it is no wonder that Tokopedia is a popular choice among Indonesians.
Bukalapak is also one of the biggest online local marketplaces in Indonesia that’s a direct competitor of Tokopedia. It is trailing closely with an estimated monthly visit count of 100 million. Since receiving an undisclosed funding round in February 2015, Bukalapak has also joined Tokopedia as a unicorn company – which is a private company with a valuation that exceeds US $1 billion.
Aside from the usual payment options that see Indonesians able to pay by credit cards and digital wallets (in the form of digital Rupiah, Indonesia’s official currency – as cryptocurrencies are not yet admitted as legal tender in Indonesia), Bukalapak works together with Bareksa, an online investment management service, to enable their users to buy mutual funds by using their digital wallet’s balance at Bukalapak. With this feature, Bukalapak aims to facilitate their millennial users to start investing for their future, and it’s one uniqueness that differs Bukalapak from their competitors.
Presenting itself as a serious competitor to the two aforementioned local brands, Lazada is also making its mark in Indonesia. First started in Singapore in 2012, it decided to copy and adapt Amazon’s business model, aiming to target the emerging Southeast Asian market. March 2018’s estimated monthly traffic count for Lazada Indonesia was 118.5 million.
Lazada implements the standard digital payment options that Tokopedia and Bukalapak also make use of (which are credit cards and digital wallets), however, they have unique features that are not available on their competitors’ platforms, such as the chat room. With these unique features, it should be safe to say that they are here to stay.
What about cryptocurrencies in Indonesia? Can I use them as a form of payment when purchasing goods from these marketplaces?
No. As briefly mentioned above, you cannot use cryptocurrencies to buy/sell products or services in Indonesia, nor can you be at the receiving end of it as a payment option for the goods/services that you are providing. The only use case of cryptocurrencies in Indonesia remains as a commodity to be traded, and that’s it. If you, however, are looking for online platforms to help you acquire some cryptocurrencies in Indonesia, there are a few options that you can try:
- Indodax – currently the biggest Indonesian crypto exchange, Indodax is getting ready to overtake the country’s stock exchange that’s a century old, in user count.
- Tokocrypto – literally means “crypto shop”, this new emerging crypto exchange enables you to buy and sell crypto assets as you see fit.
- International exchanges – some international exchanges can be accessed and used to buy cryptos in Indonesia, although you might have to buy Bitcoin first before exchanging it with another crypto asset in these exchanges. Some of the popular options include Bittrex and Binance.
- Upcoming local exchanges – there are a couple new exchanges that are coming soon as well, such as Biido and Kriptonid.
P.S. Some of these exchanges might ask you to do KYC procedures. Our suggestion is to go through with it, as it also helps to protect your assets and allows you more freedom when withdrawing/transferring them.
All in all, as a country that is projected to be one of the world’s main economic powerhouses by 2045, Indonesia makes it look likely that they will continue to embrace the future of online markets and payment options – maybe even by acknowledging cryptocurrencies to be used as a form of payment. While waiting for the future to arrive, you can be prepared: check out our gold price-backed cryptocurrency, the DinarCoin. It offers advantages that most crypto assets don’t, for its price is more stable since it’s based on the worldwide gold spot price. We also have other products that you can explore and learn more about here.