Indonesian online shoppers browse on mobile apps but shop via desktops: iPrice Group

• The conversion rate value of desktop traffic is 200% higher than mobile
• Highest conversion rate in Indonesia happens on Wednesday

REGIONAL e-commerce network iPrice Group shares its research results on e-commerce users in Southeast Asia e-commerce in 2017 and the challenges local companies face.

The research was compiled with data from iPrice’s 1,000 e-commerce partners across Southeast Asia. In Indonesia, they partnered with over 200 e-commerce players and merchants including Tokopedia, Bukalapak, and Lazada.

According to the report, in Q2 2017, Indonesia had the largest number users visiting e-commerce sites through mobile phones (87%).

“The high number could be affected by a local habit of spending more time using their smartphones. As for e-commerce players, they put a lot of time and investment into mobile development,” said iPrice Group senior content marketer Andrew Prasatya.

As an example, Shopee, that is solely a mobile marketplace, and some others, offer promotions or discounts when transactions are made through a mobile app. These activities help to trigger a surge, says Andrew.

In general, the conversion rate of Indonesian e-commerce sites is 10% higher than the average in Southeast Asia. Singapore shares same figures as Indonesia and it is 20% higher than the conversion rate in Malaysia.

Although mobile traffic seems to be rising in Indonesia, the report shows that mobile and desktops have different conversion rates.

This can be seen from the conversion rate graph based on the type of traffic. The conversion rate value of desktop traffic is 200% higher than mobile which means that, Indonesian prefer to make online transactions through their desktop.

Andrew explains that consumers prefer to purchase through desktops because it offers better displays and efficiency in payment.

The report also indicates that the Average Order Value (AOV) from desktops in Indonesia reached US$42 per basket size and US$35 per basket size for mobile. Total AOV in general is US$36 per basket size, which is still lower than Singapore (US$91).

“There are some factors that affect the AOV. For example, the average income per capita. This could cause differences in buyer behaviour and influence the trends of online shopping in each country.”

In terms of time and day preference, Indonesian online orders peak at 11 am.

“This number is 69% higher than the average number of orders on Indonesian e-commerce sites.”

The highest conversion rate in Indonesia takes place on Wednesday, when it is 12% higher than on other days.

However, during the weekend, the conversion rate decreases by 30%, which is way lower than the base conversion rate in the week.

“Promotions are perhaps offered more during weekdays rather than weekends. And people might be spending time with their family during weekends,” explains Andrew.

The percentages of people visiting e-commerce sites are dominated by smart phone users on Friday (82%), Saturday (88%), and Sunday (90%).

Payment systems also play an important part in e-commerce. This report also shows the most popular payment systems provided by Indonesian sites.

Bank transfers (94%) are by far the most popular payment system.

Indonesia is second in terms of the number of e-commerce players offering instalment payments (41%), after Vietnam (45%).

Cash on Delivery (COD) is also quite popular in Indonesia with 43% of local e-commerce sites offering this method of payment.

Andrew feels COD is less efficient because it is more costly for the company to send someone directly to customers to pick up the cash.

“But, the locals still have trust issues in buying things online, and that is one of the problems that needs to be addressed by e-commerce players. They need to share detailed information about sellers and securities.”

Logistics and payment need to be strengthen

Andrew sees four main challenges for e-commerce in Southeast Asia:

• Internet access and experience in online shopping
• Internet speed
• Topography
• Unbanked population

“There are 81 million smartphone users here, but only 32% of them have experience shopping online.”

Internet speed in Indonesia is also becoming a general issue that is being faced by all industries including e-commerce.

“The average speed of the internet here is only 5.19 Mbps, which is a bit slow to load e-commerce websites.”

In terms of topography, Indonesia is the same as the Philippines, which is an archipelago, “so it is challenging for logistics and takes longer to deliver goods.”

The unbanked population remains as challenge in the industry as well. According to Finclusion.org, only 24% of the population in Indonesia had a full-service bank account in 2016.

According to Andrew, what needs to be strengthened from the ecosystem itself are payment and logistics. "More payment systems and education needs to be conveyed to online shoppers and also, partnering with the right logistics player and providing real-time tracker to gain users’ trusts.”

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