The Ministry Of Finance: E-Commerce And OTA Becomes Indonesia's Digital Economic Power

Illustration. (Photo: Doc. Antara)

JAKARTA - The government is preparing to welcome the golden era of Indonesia's digital economy. Various efforts to encourage the development of the digital ecosystem are continuously being prepared, starting from the regulatory framework, matchmaking business events, to the latest preparation of a red and white fund to fund Indonesian start-up companies.

Not long ago, Deputy Minister of Finance of the Republic of Indonesia, Suahasil Nazara said based on the projection of the Ministry of Finance Indonesia's digital economy grew 20 percent from 2021, to US$146 billion in 2025. The largest contributor is estimated to be through e-commerce and online travel (OTA).

"If we look at the size of the digital economy, Indonesia is growing very rapidly and of course the big strategy from Indonesia is facing the industrial revolution 4.0 in the future. This is all carried out with a digital ecosystem with innovation and also with various Indonesian digital infrastructures," said Suahasil, quoted Tuesday 4 October.

Seeing this phenomenon, the Government included the digital economy as one of 18 pioneer industries that received fiscal policies related to electronic transactions and digital goods. No wonder technology companies (tech companies) are competing to innovate in building their digital ecosystem.

In practice, entrepreneurs use various ways to attract customers to spend their money. Starting from the promotion of discounted prices, synergizing the service ecosystem, to integrating digital and conventional sales channels (omnichannel) to expand and facilitate consumer access.

In line with Suahasil, a researcher from the Center of Economic and Law Studies (Celios), Muhammad Andri Perdana said that Indonesia's economic growth has been helped by the financial industry and the digital economy. The concept used by many developing startups is the integration of digital technology. According to him, merging digital services between the two platforms will result in a healthy business ecosystem.

"From a business perspective, this collaboration model is profitable because it enlarges the market niche, as well as boosts revenue from e-commerce. In addition, this E-commerce and OTA business model is based on digital technology, so it will automatically boost the digital economy in Indonesia and become something that new and extraordinary," said Andri.

In Indonesia itself, several companies have started to implement this business scheme. For example, two start-up companies belonging to the Djarum group, Blibli and tiket.com. Under the auspices of GDP Venture, Blibli synergizes with tiket.com to combine the e-commerce and OTA ecosystems.

"Through the integration of e-commerce services and online travel agents, users can combine memberships from both applications to get maximum benefits from meeting their daily needs and lifestyle," said CEO and Co-Founder of Blibli, Kusumo Martanto in a written statement last July 2022.

Late last year, Blibli even acquired a majority stake in PT Supra Boga Lestari Tbk (RANC) to strengthen the omnichannel ecosystem in the e-groceries sector.

"This collaboration is a momentum for Blibli in accelerating and strengthening the omnichannel of the two entities in developing wholesale services," said Kusumo on a separate occasion.

Despite the great potential, Andri again reminded that there are three challenges that these startups need to be aware of as well as opportunities. First, foreign funding began to be selective because there was a recession in foreign countries, the pattern of burning money by providing attractive promos was no longer attractive to them. But on the other hand, consumers prefer to shop at lower prices. When the promo is reduced, the demand from the public also decreases.

"For companies that do not depend on foreign funding, it will be a good opportunity," he concluded.