The Digital Economy of Indonesia

Indonesia’s digital economy is developing at a rapid pace. To learn more about which industries are bolstering growth, read below.

March 2022 , by YCPS Marketing & Communication Group

This March 2022, GoTo Group launched their initial public offering (IPO) and raised approximately 1.1 billion USD from investors as per data from Reuters. The Indonesian tech giant is the result of a merger between two of the country’s two largest start-ups—Gojek and Tokopedia—so investor interest is no surprise, even amidst recent losses in the overall investments space.

The strong performance of the GoTo IPO does not only signify the company’s potential, but more importantly, it indicates the strength of Indonesia’s growing digital economy. Already, Indonesia is home to eight unicorn companies, and in Southeast Asia, is uniquely positioned to continue its development amidst rapid digital acceleration.

Bolstering Indonesia’s Growth
In the YCP Solidiance white paper “Road to Recovery: Post Pandemic Business Outlook in Southeast Asia,” industry experts analyzed the current and future state of business in ASEAN and found that Indonesia’s digital economy led the region with a value of 70 billion USD. Given that Indonesia is exhibiting a 20% CAGR, this valuation is expected to double by 2025. 

While e-commerce has played a large part in boosting the digital economy of Indonesia and its fellow ASEAN member countries, other industries are poised to grow in the coming years. Within Indonesia specifically, Transport and Food are expected to leverage growing digitalization to their advantage. Currently, companies involved in these sectors can already be considered as leaders in the country’s digital economy, utilizing tech solutions such as contactless delivery, app-based ride-hailing, and online grocery shopping to increase consumer awareness and acceptance of digitalization. As these industries mature, their contribution will also increase significantly, making for a well-rounded digital economy in Indonesia.

Encouraging Forward Thinking
To fully capitalize on the emergence of the digital economy, those keen on further involving themselves must remain proactive, especially as Indonesia rebounds from the global pandemic. Due to the digital economy boom currently happening, investment opportunities are present at several levels (national, regional, cross-country). These opportunities also present the chance for greater public-private partnerships, which only serves to further grow business at both a national and international level.

While there is an abundance of intriguing business prospects, it is important to equip oneself with the necessary tools. For example, considering that small and medium-sized enterprises (SMEs) play a large role within Indonesia’s business landscape, these businesses will need to scale and adapt accordingly. Given that most will be navigating post-pandemic recovery, SMEs should utilize digitalization to remain adaptable in their operations. This will allow for a dynamic approach to business wherein transactions between stakeholders will be facilitated and highly influenced by digital economies.

As Indonesia’s digital economy matures bolstered by an influx of activity in several industries, expect involved businesses to mirror similar growth as well. These companies will not only play an influential part in driving growth within Indonesia but also across the entire Southeast Asian region. 

To learn more about the emerging digital economies all throughout Southeast Asia, and what implications these developments could have, subscribe to our newsletter here and check out these reports:

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