Currently, online shopping now cannot be done through e-commerce, but also through social media. Based on the latest We Are Social report, in 2020 it was stated that there were 175.4 million internet users in Indonesia. Of that number,160 million active social media users. Because the number of users of social media, making some of the users take advantage of opportunities to do business.

Period: 2020/1/18 – 2020/7/17
Respondents: 1000 Indonesia men and women

Q: Do you know the difference between online shopping and social media shopping? (SA)

Both of the respondents, male with 84.6 percent and female with 86.8 percent, do know the difference between online shopping and social media shopping. The basic difference between the two is for online shopping, you shop online through e-commerce platforms, such as Tokopedia, Bukalapak, Blibli, and others. While social media shopping, you shop through Instagram, Facebook or Twitter.

According to the report ‘The digital archipelago: How online commerce is driving Indonesia’s economic development’, predicted that around 30 million people have shopped through online platforms out of a total population of 260 million in 2017. The prediction of GMV transaction value from online commerce reaches US$ 8 billion in the same period. The figures come from the official e-commerce platform contribution of US$ 5 billion, and informal commerce, known as social media shopping for more than US$ 3 billion, McKinsey projects GMV numbers will balloon to US$ 55 billion to US$ 65 billion in 2022. Informal commerce is said to contribute around US$ 15 billion to US$ 25 billion, the rest is controlled by official e-commerce.

Q: Online shopping or social media shopping, which one do you most often do? (SA)

Both male and female respondents shop online more often through e-commerce, with 65 percent and 66 percent. It is because consumers can get many variations of the sought product when shopping through e-commerce. Google Search in 2018 named Indonesia the largest and fastest-growing e-commerce market in Southeast Asia. Indonesia’s market in 2018 will reach US$ 12 billion. Compounding e-commerce growth between 2015 and 2018 rose 94 percent. It is estimated that this growth will rise 41 percent between 2015 and 2025.

Q: What items do you buy through social media shopping? (MA)

Fashion product becomes the most purchased item in e-commerce and social media by male respondents (32 percent) and female respondents (48.8 percent). Based on We Are Social’s data, in 2018, sales for this category reached around Rp 32 trillion. While 18.4 percent of males buy accessories through social media, but 22.4 percent of females prefer to buy food and drinks.

Q: What social media do you use to look at a selection of items? (MA)

Both males (68 percent) and females (60.4 percent) choose Facebook as the first place to shop, followed by Instagram with 42 percent of males and 59.2 percent of females.

The “Asia Social Commerce Report 2018” report released by PayPal with Blackbox Research shows Instagram and Facebook to be the most used social media for sellers in Indonesia to promote their business. Three main reasons to trade on social media are increasingly reliable. First, the social media platform considered easier to reach a wider potential market. Second, it easier to open business through social media. Last, the social media platform could increase their network of friends and acquaintances that could drive business growth.

Q: When you do social media shopping, how do you order the store directly? (MA)

After they choose a product through Facebook or Instagram, 47 percent of females and 41.2 percent males order by WhatsApp directly to the owner of the shop.

Q: What payment methods do you use when doing social media shopping? (MA)

According to the survey above, bank transfer and digital wallet services were chosen by both females and males respondents when they shop through social media. Bank transfer is expected to decline slightly to take a 24 percent share of the market by 2021, by which point it will be overtaken by digital wallets. Currently, the third most-used e-commerce payment method, digital wallets are rapidly increasing in popularity. Around 38 e-wallet apps are currently registered at Bank Indonesia. According to a report by meta-search website iPrice Group, the total value of transactions made through these apps in the country was US$1.5 billion in 2018, and by 2023 it is estimated to reach $25 billion. The Indonesian fintech industry is currently dominated by local players. According to App Annie’s Q2 2019 data, the top five e-wallet apps based on monthly active users from both Google Play Store and iOS are GoPay, OVO, DANA, LinkAja, and Jenius.

The Conclusion

Indonesian market began to use social media for shopping lately. We can see that social networks have a large impact on how people spend their money these days. However, the playing field is getting increasingly more crowded. Staying up to date on the trends will remain important to success. Also, always finding innovative, unobtrusive ways of getting your message out there will likely prove necessary to future success.