Indonesia’s Digital Retail Outlook 2025

Table of Contents

Indonesia is Southeast Asia’s largest and most dynamic digital economy, and the Digital 2025: Indonesia Report highlights its rapid transformation. With a population of more than 270 million, rising internet penetration, and a vibrant young demographic, Indonesia is set to remain the engine of Southeast Asia’s e-commerce growth. For businesses, Indonesia offers both scale and complexity — a market that rewards localized strategies, logistics investments, and digital-first approaches.

The Big Picture

Population online: Over 220 million Indonesians (around 80% of the population) are internet users, up sharply from previous years.
Mobile-first nation: More than 95% of internet users access online platforms via smartphones.
E-commerce size: Indonesia’s e-commerce GMV surpassed US$75 billion in 2024, with annual growth averaging 19%. Projections suggest it will continue to dominate SEA’s online retail economy.
Digital payments: GoPay, OVO, Dana, and ShopeePay are household names, reflecting widespread e-wallet adoption. Over 80% of urban online shoppers regularly use e-wallets.

The headline: Indonesia is a growth powerhouse, but businesses must adapt to diverse consumer segments and infrastructure gaps across the archipelago.

Category Trends

1. Electronics & Gadgets

Electronics are consistently among Indonesia’s top online categories, accounting for 20%+ of transactions. Smartphones and accessories lead the pack, fueled by budget-friendly brands like OPPO, Xiaomi, and Vivo as well as aspirational demand for Apple.

Action point: Offer installment payment options and robust after-sales support. Highlight value-for-money propositions in mid-tier products, while offering exclusivity for premium segments.

2. Fashion & Apparel

Fashion is Indonesia’s largest e-commerce category, representing 16% of total online transactions. Affordable local brands and Muslim fashion dominate, making Indonesia one of the world’s biggest modest-wear markets. Seasonal demand spikes around Ramadan and Eid, with online campaigns on Shopee and Tokopedia driving record sales.

Action point: Invest in influencer marketing and livestream commerce. Leverage TikTok Shop, which has surged in popularity, to reach younger demographics.

3. Health & Beauty

Health & beauty holds the second-largest share of online sales (~14%), with skincare, cosmetics, and supplements in high demand. Korean and Japanese beauty trends strongly influence Indonesian consumers, while halal-certified products are increasingly favored. Eg: Brands like Wardah and Scarlett Whitening have built massive followings with affordable, halal-certified offerings.

Action point: Build trust with authenticity seals, product education, and reviews. Subscription services for supplements or skincare sets can build recurring revenue.

4. Groceries & Essentials

While traditional markets and warungs (mom-and-pop shops) still dominate offline, online grocery adoption is accelerating. Players like HappyFresh, Sayurbox, and GrabMart are expanding urban reach.

Stat: Around 6.9% of Indonesia’s online transactions already involve groceries and F&B.

Action point: Prioritize last-mile logistics, especially in congested urban centers like Jakarta. Promote bundle offers for families and highlight freshness guarantees.

5. Home & Living

Home appliances and furniture are gaining traction, making up ~10% of e-commerce sales. With rising middle-class incomes, Indonesians are investing in home upgrades, especially in Tier 1 and Tier 2 cities. Eg: E-commerce sales for Polytron appliances and Informa furniture surged during pandemic-driven home improvement trends and remain strong.

Action point: Provide detailed product pages, AR tools for visualization, and white-glove delivery/installation services to differentiate.

6. Toys, Baby & Hobbies

With Indonesia’s young population and growing family base, toys and baby products represent a steadily growing category. Online platforms like Orami specialize in baby care and parenting essentials.

Stat: Toys & hobbies make up nearly 10–12% of Indonesia’s e-commerce mix.

Action point: Build parenting communities with trusted content. Highlight safety certifications and offer subscription bundles for baby essentials.

Platforms and Market Landscape

Tokopedia and Shopee are the two giants, controlling the majority of transactions.
Lazada Indonesia remains a strong competitor, especially in electronics and cross-border purchases.
TikTok Shop is reshaping social commerce, particularly in fashion and beauty.
Blibli and Bukalapak maintain relevance in niche and regional markets.
Logistics and payments integration are major differentiators — partnerships with J&T Express, SiCepat, and Ninja Van are common among sellers.

Consumer Behaviors to Watch

Social commerce dominance: Indonesians are among the heaviest users of TikTok Shop in the region, blending entertainment with shopping.
Installment culture: Consumers often prefer “buy now, pay later” schemes offered by fintechs like Kredivo and Akulaku.
Price sensitivity: Discount-driven campaigns like 11.11 and 12.12 remain critical for attracting buyers.
Mobile-first habits: Almost all e-commerce is completed on mobile apps. Optimizing for app-based shopping is essential.
Halal preference: Across categories from beauty to F&B, halal certification is a significant trust signal.

Challenges Ahead

Geographic complexity: Serving a country spread over 17,000 islands creates logistics challenges and higher costs.
SME competition: Millions of SMEs compete on platforms, driving price wars and thin margins.
Flood of imports: Low-cost products from China put pressure on local brands.
Regulatory shifts: New rules on e-commerce and social commerce (such as limits on TikTok Shop) create uncertainty for businesses.

Practical Strategies for Businesses

Localize deeply: Adapt to Indonesia’s cultural, religious, and regional diversity. For example, modest fashion and halal-certified beauty should be core product lines.
Invest in logistics: Work with strong 3PL partners and explore micro-fulfillment centers in major cities to reduce delivery times.
Leverage social commerce: Prioritize TikTok Shop and Instagram Live to tap into the country’s highly engaged youth market.
Offer flexible payments: Provide BNPL options and installment plans to match local preferences.
Differentiate on trust: Highlight authenticity, safety, and warranties to stand out from low-cost imports.
Capitalize on mega-sales: Build aggressive campaigns around 9.9, 11.11, and 12.12 shopping festivals to maximize visibility.

Final Word

Indonesia is the crown jewel of Southeast Asia’s digital retail landscape. With its massive population, strong mobile-first culture, and rapidly growing e-commerce market, it offers unmatched opportunities — but also fierce competition and operational challenges.

The bottom line: electronics, fashion, health & beauty, groceries, home & living, and toys/baby/hobbies will continue driving growth. Businesses that invest in logistics, localization, social commerce, and trust-building will be best positioned to capture Indonesia’s booming digital retail economy in 2025–2026.