Socio-Demographic Outlook of Indonesia
With a population totaling around 270 million individuals, Indonesia is the fourth-largest country in terms of population size. Its ethnic composition is characterized by variety, in fact, wide variety, as the country contains hundreds of different ethnic groups and cultures. Demographic skewed towards young urban population; prefers the convenience of shopping indoors these days with GDP growth rate of 3.7% and an inflation rate of 1.6%
Overview Of the D2C Market in Indonesia
D2C Market in Indonesia is <1% of the Total E-commerce market but will have a huge growth rate owing to the large target Audience, Rising Online Shoppers, High Per capital Income, and Venture capitalists’ firms backing up the D2C Start-Ups In the country. Brands are offering Omni Channel Strategy-Online and Offline for better Client Retention & Higher penetration with Fashion and Beauty being the Most Prominent category of D2C Space in Indonesia.
Market Segmentation in Indonesia D2C Market
Market Segmentation by End Users by GMV:
Fashion and Apparel remained the dominant category in the market in terms of revenues in the D2C Market in Indonesia. The growth of the majority of the brands in the Fashion Category is driven by high populated regions with their growing middle class and lagging offline shopping infrastructure followed by the Beauty & Personal Care and FMCG segment.
Market Segmentation by Delivery Period by Number of Orders:
Most of the deliveries take more than 2 days to deliver due to logistics Issues and Complex Infrastructure. These usually include segments like fashion, Jewelry, Furniture, and others while only 3% of the deliveries are done on the same day and these usually include health and FMCG products due to small shelf life.
Market Segmentation by Region By GMV:
Jakarta being the capital region witnessed very high GMV accompanied by strong retail growth and contributed the majority of the revenue share due to its high population followed by Surabaya, Medan, and Bandung.
Snapshot Of Different End-Users of The D2c Market
Fashion and Apparel remained the dominant end-user in the market in terms of revenues in the D2C Market in Indonesia followed by the Beauty & Personal Care and FMCG. Other end users are health, food, beverage, and others (including furniture, insurance, and many more).
Key Trends:
- Customization
- Sustainability at the forefront
- Natural & organic products
- Inventory management technologies
- Integration of point of sale (POS)
- Optimize the delivery experience
Marketing Techniques Used:
- Local brands targeting
- digital advertising
- Influencers
- sample products through subscription boxes.
- Search Engine Marketing (SEM)
- Reviews and Feedback
- Location-based SEO
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Future Developments:
- Shift from desktop to mobile and improving the mobile browsing and checkout experience
- Government stipulates halal certification mandatory for cosmetics products.
- Augmented Reality and Virtual Reality enabled doctors to deliver personalized care experiences.
- Use of Artificial Intelligence and Machine Learning for Fraud detection in FMCG E-Commerce.
Success Case Studies of The D2c Market
Many Brands Like Casper from the US, Perfect Dairy, and Maia Active from China have shown huge success over the years in their D2C business.
These brands have adopted multiple Marketing strategies to build this powerful positioning in the world. Focused Marketing is the key of all the brands to reinforce the message that its brand was trendy — and urban.
Competition Landscape of The D2c Market
The market structure of the D2C Market is highly Fragmented with high penetration from Youth Population. Companies are increasingly adopting Influencer marketing & distribution strategies post COVID to gain a foothold in the market since customers are skeptical about visiting offline stores.
Due to high Penetration of smartphones and increasing Youth population, Companies are getting huge attention by focusing on marketing strategies that attract the millennials for trying out new brands into the market.
Major Competition parameters for this type of market are- Product Differentiation, Price, Retail Touch Points, After-sale services, Number of SKUs, and Price. The company tends to solve customer issues and attract people to their Product Uniqueness along with affordable price leading to high sales of D2C Brands in Indonesia.
Future Outlook of The D2C Market in Indonesia
D2C Market in Indonesia will have a huge growth rate owing to the large target Audience, Rising Online Shoppers, High Per capital Income, and Venture capitalist firms backing up the D2C Start-Ups In the country. Indonesian customers are highly influenced by K-Pop Culture & Korean beauty Brands along with natural & Eco-friendly products, especially Millennials. For every two men, there are 5 women in Indonesia giving rise to Beauty USD ~ Bn GMV by 2024.
Key Segments Covered in Indonesia D2C Market: -
By End Users
Fashion includes glasses & Frames
Beauty & Personal Care
Food and Beverage
Health
Jewelry
Others includes Furniture & more
By Delivery Period By Number of Orders
Same Day Delivery
Next Day Delivery
Two Days Delivery
More Than Two Days Delivery
By Region by GMV
Jakarta
Surabaya
Medan
Bandung
Makassar
Others such as Batam, Depok, Batu and more
Key Target Audience
D2C Companies
Venture Capitalists
Potential Investors
E commerce Companies
Time Period Captured in the Report:
Historical Period: 2016-2021
Forecast Period: 2021–2026
Key Topics Covered in the Report
Indonesia E commerce Market Introduction
Indonesia Retail Market Introduction
Indonesia D2C Online Retail Market Introduction
Indonesia D2C Online Retail Market Size, 2016-2021
Indonesia D2C Online Retail Market Segmentation, 2021
Growth Drivers for Indonesia D2C Online Retail Market
Landscape of E commerce, D2C Players, Vertical Players, Logistics Companies in Indonesia D2C Online Retail Market
Competition Scenario of Indonesia D2C Online Retail Market
Issues and Challenges in Indonesia D2C Online Retail Market
Customer Analysis in Indonesia D2C Online Retail Market
Snapshot of All Vertical Sectors in D2C Online Retail Market
Indonesia D2C Online Retail Market Future Outlook and Projections, 2021-2026F
Case Study of the Global Players in D2C market
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Indonesia D2C Online Retail Market
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Ankur Gupta, Head Marketing & Communications
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