Indonesia is experiencing rapid growth in social commerce, a phenomenon that combines social media engagement with e-commerce. Platforms such as TikTok Shop, Instagram Shopping and WhatsApp Business are transforming the way consumers discover and purchase products, creating new opportunities for foreign companies, including Italian SMEs.
With more than 205 million internet users and smartphone penetration exceeding 70% of the population, Indonesia represents a strategic market for Italian companies operating in sectors such as fashion, cosmetics, food and design. According to a study by eMarketer, 40% of online purchases in the country are made through social commerce, highlighting the growing importance of this sales channel.
Key social commerce platforms in Indonesia
Several platforms dominate Indonesia’s social commerce landscape:
- TikTok Shop: a market leader thanks to live shopping, competitive pricing and direct interaction with consumers. It reached more than 10 million active sellers in 2023.
- Instagram Shopping and Facebook Marketplace: effective tools for showcasing products in a highly visual and engaging way, with more than 40 million monthly active users in Indonesia.
- Shopee Live: combines live product demonstrations with limited-time offers to drive purchases. Shopee recorded a 30% increase in sales generated through live streaming in 2023.
- WhatsApp Business: widely used for informal sales and direct customer interaction, with more than 50 million monthly active users.
Consumer preferences and emerging trends
A recent study by PCMI found that Indonesian consumers favour shopping experiences based on trust and direct interaction. Influencer marketing, live streaming and the ability to negotiate prices via chat are key factors in the purchasing decision-making process.
The role of influencers and social commerce
Sixty-three per cent of Indonesian consumers say they are more likely to trust a product recommended by an influencer than one promoted through traditional advertising. Partnerships with digital creators have therefore become an essential strategy for brands seeking to establish themselves in this market.
Moreover, 60% of online shoppers use social media not only to discover new products but also to make purchases directly through digital platforms.
Live-stream shopping, particularly popular on Shopee and TikTok, is also experiencing significant growth, with 60% of consumers having made at least one purchase through live shopping in 2024. This trend offers companies a unique opportunity to engage with audiences in an authentic way and increase conversions in real time.
The dominance of mobile commerce
Indonesia is a mobile-first market, with 80% of e-commerce purchases made via smartphones. The ease of use of e-commerce applications, combined with the integration of digital payment methods such as e-wallets, which account for 35% of transactions, has made mobile shopping the norm for Indonesian consumers.
Italian SMEs seeking to enter the Indonesian market should therefore optimise their digital strategies for mobile devices, ensuring that their e-commerce platforms are fully mobile-friendly and provide fast payments and a seamless user experience.
Growing interest in international brands
Approximately 20% of e-commerce sales in Indonesia come from cross-border purchases, demonstrating growing interest in international brands. Indonesian consumers are attracted to high-quality products and foreign brands, particularly in the fashion, beauty and technology sectors.
However, success in the Indonesian market depends on a company’s ability to localise its sales strategy by adapting pricing, payment methods and marketing campaigns to local consumer preferences.
As digitalisation continues to advance and social media plays an increasingly central role in the purchasing journey, companies that invest in social commerce and mobile-first strategies will be well positioned to capitalise on the opportunities offered by Indonesia’s e-commerce market.
Regulation and emerging challenges
The sector has undergone significant regulatory changes following the introduction of Regulation No. 31/2023, which redefined the role of social media platforms in online commerce. The main changes include:
- Ban on direct transactions through social media: platforms may promote products but may not directly process payments.
- Licensing requirements for operators and sellers: businesses selling online must obtain specific authorisation from the Ministry of Trade.
- Minimum price for imported products: set at USD 100 to protect the domestic market, with significant implications for foreign sellers.
- Compliance with quality and consumer protection standards: businesses must ensure that products sold online meet applicable safety and quality requirements.
Opportunities for Italian SMEs
Despite the regulatory challenges, Indonesia’s social commerce market offers significant opportunities for Italian companies, particularly in the following sectors:
- Fashion and accessories: Made in Italy products are highly valued for their quality and design. Indonesia is the world’s fourth-largest e-commerce market for fashion.
- Cosmetics and beauty products: demand for natural and halal-certified products is increasing. Indonesia’s cosmetics market exceeded USD 6 billion in 2023.
- Food and gastronomy: there is strong interest in authentic, high-quality Italian products. The online food and beverage segment grew by 35% over the past year.
Market-entry strategies
Italian SMEs looking to enter Indonesia’s social commerce market should consider the following practical recommendations:
- Establish a local presence: work with Indonesian partners to facilitate regulatory compliance and improve logistics.
- Leverage the most popular platforms: TikTok and Instagram are essential marketing channels, particularly when content is tailored to local audiences.
- Ensure legal compliance: obtain the certifications and authorisations required to operate in the Indonesian market, including PSE registration where applicable for online operators.
- Adapt communications to local audiences: develop authentic content aligned with local culture and consumer preferences, with a strong emphasis on brand storytelling.
- Harness the potential of influencers: collaborate with local creators to increase brand visibility and build trust among consumers.
- Monitor market trends: invest in market intelligence and analysis to continuously adapt sales strategies to changing consumer preferences.
Final considerations
Indonesia represents a significant opportunity for Italian SMEs seeking to expand into Asia’s digital economy. With its young population, increasing digital adoption and rapidly evolving social commerce ecosystem, the country offers fertile ground for Made in Italy products and brands.
Success in this market, however, requires a carefully planned strategy, a clear understanding of the regulatory environment and a strong digital presence. Italian companies that are able to adapt to the dynamics of Indonesia’s social commerce landscape will be well positioned to achieve sustainable growth and strengthen their presence in the market over time.