Indonesia Conquers the Largest Share of ASEAN’s Digital Market Among Its Neighbours
With almost 40% of the overall value of digital market share in ASEAN, Indonesia is leading the ranks with the most digital economy transactions in 2022. With this achievement, Indonesia is paving the way to igniting the digital economy within the country. The digital sector proved one of the most critical factors in hastening recovery following the pandemic.
Putting a focus on science and technology, Indonesia is pivoting to add value to its digital economy. Hence, the country’s rapid development of startups reflects the digital economy’s accelerated progress. Indonesia ranks sixth in the world with the most startups, with over 2,400. The government has supported developing critical areas like human resource capability to expedite this.
When it was announced, a ministry expert stated that the value of the digital economy in ASEAN has reached US$194 billion, with Indonesia holding 40 per cent of it.
Additionally, he claimed that the emergence of e-commerce, or online shopping platforms, due to advancements in information and communication technology, has made it simpler for customers to access goods and services and generated new business opportunities, changing how the ASEAN retail industry looks.
Pandemic An Overlooked Catalyst
The pandemic has been a blessing in disguise, as it has inevitably driven business needs to survive via the digital realm. In turn, the digital retail industry grows at break-neck speed with the ever-intensifying internet penetration and use of smartphones.
With many millennials opening up to learn the opportunities to generate income through the digital economy, other industries like banks, energy and logistics are collaborating with the government to develop the digital economy. Whilst e-commerce may emerge as the champion for Indonesia’s digital economy, the crypto asset industry is rising by 50%. In 2021, there were 11.2 million consumers or users of cryptocurrency assets, according to data from the Commodity Futures Trading Regulatory Agency (CoFTRA). From the end of November 2022, when it stood at 16.55 million people, this figure had increased by 48.7%.
An interesting point of view is that the development of some ASEAN countries’ digital economy has surpassed the global digital economy development rate of 3.1 per cent. Countries like Malaysia, Vietnam, the Philippines, Cambodia, Singapore, and Indonesia have recorded growth rates between 3.8 to 8.7 per cent.
Indonesia’s Central Bank is collaborating with the central banks of four other ASEAN nations, namely Singapore, Thailand, Malaysia and the Philipines, to facilitate payments using QR to boost the digital economy. QRIS is a non-cash transaction technique that will help partnering countries make cross-border payments more effortless without needing a money changer.
At 3E Accounting, we are always ready to help owners grow their businesses in the local market. Our expertise in local market insights will enable companies to flourish in Indonesia’s business climate. Contact us to know more about how we can help your business.
