Indonesia to lead SE Asian online shopping boom

[JAKARTA] Indonesia is set to lead a boom in online shopping across Southeast Asia as Internet access explodes and investors pour money into a rapidly growing host of retail startups, analysts say.

Much like China several years ago, the region is enjoying a rapid increase in web access that observers say is starting to drive a fundamental shift in shopping habits among the emerging middle class.

According to a recent report by investment bank UBS, business-to-consumer e-commerce in Southeast Asia will increase at least five-fold by 2020, and could reach as much as US$35 billion a year.

It cited strong growth in Thailand and the Philippines but said Indonesia, the region's biggest economy, was the most promising market despite currently having modest online sales and low Internet penetration.

This hope is based on an expected rapid increase in web users, with consultancy Redwing saying that 125 million people are expected to be online by the end of 2015, from 55 million in 2012, coupled with an increasingly affluent middle class.

"There is huge opportunity," Daniel Tumiwa, head of the Indonesian e-commerce association, told a recent startup conference in Jakarta. "The middle class is a major, major, major driving force."

E-commerce growth across Southeast Asia has been given a kickstart by an explosion in the availability of cheap smartphones, analysts say, with many getting their first taste of the Internet on handsets that come loaded with social media and popular retail sites.

AFP