Why Is E-Commerce Growing Rapidly? This Is The Factor Why

YOGYAKARTA - The trend of using e-commerce or online buying and selling continues to increase from year to year. Indonesia with the fourth largest population in the world, is the largest e-commerce market in Southeast Asia. Especially now that various online shopping platforms have emerged. So why is e-commerce growing rapidly.

Buying and selling activities are easier and more practical thanks to the development of digital technology. This advantage is not only felt for buyers or customers, but also enjoyed by sellers. Many companies in technology also compete to present platforms to meet the trade needs of people around the world.

The growth of the e-commerce industry is growing rapidly and is welcomed by people. Shopee ranks first as the most accessible e-commerce by users in Indonesia in 2023.

Online shopping needs are also increasingly booming with various e-commerce in addition to the oren store, such as Tokopedia, Bli-Bli, Lazada, and others. Even the TikTok social media platform does not want to miss the riding the wave, by presenting TikTok Shop. Why is e-commerce growing rapidly, it turns out that this is the cause.

The dominant factor driving e-commerce growth is a significant increase in population. In 2019, the number of middle class populations in Indonesia experienced a 21% jump from the total population.

Although in 2023 and in the next few years the population growth in Indonesia is predicted to slow down or decline, the population is still among the largest ranks in the world. This increase in population affects online shopping patterns.

The smartphone company continues to offer mobile phone products that support the ease of internet access for everyone. This target also experienced a positive track because it was proven by the fact that almost 89% of Indonesia's population had used smartphones in 2020.

The widespread spread of smartphone use in Indonesia is influenced by the needs of the times. The pandemic has encouraged students to have devices such as smartphones and laptops. In addition, the price of smartphones in Indonesia is quite affordable, so it can be owned by various levels of society.

The number of internet users in Indonesia is in line with the growth of smartphone users. The data shows that 70% of internet users in Indonesia use smartphones to access the internet.

When talking about transactions on online trading platforms, smartphone users play a major role with nearly 75%, exceeding online transactions made via private laptops or computers.

Usually, purchase decisions on online trading platforms are also affected by marketing strategies carried out by sellers through social media. Therefore, the large number of social media users in Indonesia has a significant impact on accelerating e-commerce growth.

With so many users, it is not surprising that a large number of trade activities take place within the scope of social media. The role of influencers is also able to play an important role in encouraging social media users to engage in certain e-commerce transactions.

Another factor that also affects e-commerce growth in Indonesia is the development of financial technology. In mid-2018, around 66% of Indonesia's population still does not have a bank account.

However, along with the emergence of more e-commerce platforms, the use of bank accounts and non-cash transactions has increased drastically. Data compiled from Bank Indonesia shows that the total non-cash transactions recorded in 2020 reached around Rp126.95 trillion, much increasing from the previous figure which only reached Rp47.19 trillion.

The drastic increase in the use of electronic money plays an important role in encouraging the rapid growth of online markets in Indonesia. Satisfaction with the ease of payment through e-money makes Indonesians more likely to shop on online store platforms.

That is the answer why e-commerce is growing rapidly. The growth of the e-commerce industry cannot be separated from the factor of increasing smartphone and social media users. This increase in online buying and selling activities that then occur contributes to both business people or MSMEs.

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