According to new reports, Indonesia's e-commerce spending is about to skyrocket, thanks, in part, to startups.
In a recent interview with Borderless, Indonesian Tech Minister Rudiantara said that he predicts that the value of the country's e-commerce sector will surge in 2020 to $130 billion. Last year, this figure was around $18 billion, and in 2014 it was $12 billion. Indonesia's e-commerce sector is on the rise, but a seven-fold rise in four years sounds like a steep goal. Rudiantara says that this jump is possible, but the country must address several issues to reach its goal, including funding, logistics, human capital resource, infrastructure, cyber security, taxation issues, and opening the market to players outside of the country.
While Rudiantara did not go into detail about the plan to address these issues, he did reveal two interesting details about the country's e-commerce plans. One possible plan, according to Rudiantara, is government funding for startups. The Tech Minister said that the government is looking into "subsidized microloans" for startups that can be "converted to venture capital." The other plan is to set up a technology board, so that tech companies can list locally. Rudiantara said that there are ongoing talks with the Financial Services Authority (OJK) and the Indonesia Stock Exchange to set up the board, and that he expects it to form as soon as one to two years down the road. The tech board may take longer than two years to materialize, as Indonesia has a history of postponing e-commerce plans. The e-commerce roadmap was delayed several times and is still awaiting approval by the Ministry of Law and Human Rights.
Photo: © iStock.