Social Media, Indonesia's election, and the growth of e-commerce

Editor's note: This article is part of a special report on Indonesia published in connection with our exclusive ranking of the Top 100 Indonesia brands, which in turn is part of our Asia's Top 1000 Brands ranking.

A democratic development from recent years, the 2014 elections have concluded fairly well without any occurrence of events to disrupt Indonesians’ livelihood. Furthermore, as the fastest growing country of social media users, Indonesians took to the digital world to express their support towards their respective presidential candidates. This year is the first time that mass rallies in public spaces were rarely seen. In urban areas, a majority of the campaign took place on the Internet with followers of both candidates campaigning their ideas through myriad social media platforms. 

Never before has any presidential candidate managed to gather thousands of volunteers to create materials on social media platforms for them, placing Indonesia in the top worldwide trending topics, particularly on Twitter.

As the number three Twitter country in the world, Jakarta ranks as the top Twitter city, ahead of London, New York, and Tokyo. The many hours Indonesians (in particular Jakarta residents) spend on the road in heavy traffic jams is allegedly a major factor in the fast-growing use of the social medium. Jakarta Tweeps (twitter people) are Millennials, mostly under 25 years old, and are digital-savvy early adopters. Always on the go, Indonesians depend on mobile devices to post and read tweets.

While Indonesia’s internet penetration at 15 per cnet is lower than the world average of 30 per cent, mobile penetration is actually much higher than the world average (112 per cent vs 93 per cent). This data tells us that the majority of Indonesians access the internet through their mobile apps, which is in line with the cheap mobile data plans widely available from competitive telecommunications providers. Another factor is most Indonesians own at least two or more mobile devices. BlackBerry, because of its widely used Messenger service, is still the preferred handset. Although WhatsApp has been gaining popularity recently and could lead to greater use of other devices.

In the past few years, traditional media has also started taking its social cousin more seriously.  Publishers now write stories based on issues that first appeared in social media. For instance, when a public figure mentions something notable on a social platform, the traditional media often follows-up with a story the next day.

Such phenomenon gives Indonesian society an opportunity to be the referee for candidates as well as become a watchdog for fair elections. With the society so entrenched in social media, the influx of information from various social media channels (legitimate and illegitimate alike) can sometimes confuse readers.

With the high interest in social media and the internet, it is no surprise that many see Indonesia as the next frontier for online retailers. Indonesian e-commerce, at US$1.7 billion, is still low compared to India, but some projections peg it to surpass US$4 billion by 2016.  Surveys indicate most purchases happen during office hours.  Since fixed-line internet connections at home are typically slow and unrealisable, online shoppers take advantage of more stable and fast connections at their offices. Another supporting factor for e-commerce growth in the next few years is the country’s lack of adequate transport infrastructure - with busy lifestyles, Indonesians do not want to spend time on the road just to shop.

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According to Euromonitor, consumer-to-consumer commerce is also on the rise in Indonesia.  People use various mobile and social media platforms, such as Kaskus, tokobagus.com, Facebook, Instagram, WhatsApp, and BlackBerry Messenger, as the front window of their online shopping experience. Kaskus is the largest online marketplace in Indonesia and has millions of members as well as very active online discussion forums.  However, these platforms are mostly popular in tech-savvy urban communities.

Increasing consumer trust in secure-payment transactions has also spurred e-commerce growth. Payment by bank transfer is still a preferred method, while most shoppers favour Cash-on-Delivery services (via courier). These online shops get fans/followers and buyers from word-of-mouth, and rely on seller-buyer trust and honesty.  The multitude of products ranges from branded goods to home made products.

M-commerce is also likely to see growing presence in the next 3 years as e-commerce sites prepare to launch their m-commerce apps for easy browsing and purchasing via smartphones. However, the most common hindrance of e-commerce and m-commerce is shopper preference to visit physical stores to touch and feel the products.  The ever-growing numbers of shopping malls around major cities cater to these more traditional needs.

Euromoney also notes that apparel and footwear are likely to record the strongest performance in internet retailing, both international and local brands are prominent in this scene. In the midst of ever-rising nationalistic sentiment, young Indonesians lean towards the preference of trendy local footwear and apparel brands to purchase from online retailers. One example is the local apparel brand, Tulisan (www.tulisan.com).  Its artistry and exclusivity has managed to create a strong fan base and the firm uses mailing list and Instagram to communicate its latest products to followers.

Another example is local men’s footwear brand, Brodo, which two engineers from Bandung started, having the dream of affordable but great footwear for themselves and their friends. They started the business by selling the products via social media and now have two offline stores for their “brothers” (that is, customers).  

Indonesia’s shift to a more connected mobile and social society has already had implications for politicians but brands should expect the same kind of treatment as the influences of affluence and internet penetration both expand in the country. Look for Indonesians to leave off following and start setting trends.