A new report by Google, Temasek, and Bain & Company projects Indonesia’s digital economy to reach a Gross Merchandise Value (GMV) of USD 90 billion (approximately IDR 1,414 trillion) in 2024. This represents a 13 percent increase from the previous year, positioning Indonesia as the largest digital economy in Southeast Asia, according to reporting from Tempo.
The e-Conomy SEA 2024 report identifies the e-commerce sector as a significant contributor to this growth, with an anticipated 11 percent rise in GMV to USD 65 billion in 2024. Continuous innovations from leading e-commerce platforms have been crucial in enhancing user experiences, fueling this increase.
In addition, Tempo highlights Indonesia’s rapid growth in the creator economy, with the country ranking as the second-fastest-growing market for video uploads, showing a Compound Annual Growth Rate (CAGR) of 16 percent between 2022 and 2024.
Veronica Utami, Country Director of Google Indonesia, noted the expansion of video commerce and the creator economy, saying, “The rapidly growing video creator community in Indonesia underscores the significant potential of this sector,” in a statement on Wednesday (13/11/24.)
Utami further explained that artificial intelligence (AI) is a key driver in Indonesia’s digital transformation, with applications across marketing, gaming, and education, offering more personalized user experiences. To support AI-driven services and data growth, Indonesia’s data center capacity is expected to expand by 268 percent, reaching 202 MW.
Utami emphasized the importance of AI implementation and collaboration with government and industry to ensure digital security and build user trust. “We believe Indonesia has the potential to lead digital innovation in the region,” she added.
Other digital sectors in Indonesia are also on the rise, Tempo reports. The online travel sector is projected to grow by 24 percent to reach USD 9 billion in GMV, boosted by a 400 percent increase in international travel since 2020. Digital financial services are expected to reach a Gross Transaction Value (GTV) of USD 404 billion, with a growth rate of 19 percent. Digital lending is predicted to hit USD 9 billion GMV, while food delivery and online media are forecasted to reach USD 6 billion and USD 8 billion, respectively.
Aadarsh Baijal, a Partner at Bain & Company, highlighted Indonesia’s key role in Southeast Asia’s digital economy, saying, “We estimate that GMV will double by 2030, primarily driven by e-commerce and online travel, especially with the anticipated increase in intra-regional travel.”
Source: Tempo
Stock image by Pete Linforth from Pixabay
