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Indonesian Consumers Flock Online to Purchase Products and Services

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Mobile phones are catching up as the favoured online shopping device
Credit card security remains a key concern for online shoppers

JAKARTA, 03 SEPTEMBER 2014: Indonesian digital consumers enjoy online shopping along with the growth of connected device ownership and when it comes to traveling, online purchase becomes a convenient way of transaction, according to an e-commerce report released recently by global information and insights company, Nielsen.

The Nielsen Global Survey of E-Commerce polled more than 30,000 internet respondents[i] in 60 countries to examine the online shopping and purchasing intentions of consumers worldwide. The study provides clarity about global consumers’ buying intentions for both consumable and non-consumable categories in the growing e-commerce landscape.

The survey findings revealed that travel services are the most commonly purchased items online in Indonesia, along with tickets for events such as movies, live performances, exhibitions and sports games; as those categories are included in the top five for intention to purchase online. Around half of Indonesian consumers plan to go online to purchase flights (55%) and make hotel and tour reservations (46%) within the next six months. Four in ten consumers plan to purchase ebooks (40%), almost four in ten consumers plan to purchase clothing/accessories/shoes (37%), while more than one third plan to purchase tickets for events (34%) online. (See Chart 1).

“Internet penetration in Indonesia has been increasing since 2010. By now, around a third of the population of the big cities have ever accessed internet within the past 3 months, “notes Anil Antony,Executive Director, Consumer Insights in Indonesia. “Along with it, ecommerce retailers’ product and service offerings have evolved significantly in recent years as the popularity of online shopping has increased. Consumers are going online and they are increasingly searching out online channels to research and purchase the products and services they need and want.”

When it comes to devices most frequently used to shop online, the use of mobile phones for online shopping is growing in popularity. Indonesia ranks in the top markets globally for use of a mobile phone to shop online together with The Philippines , Vietnam and Thailand; while all Southeast Asia markets scored above the global average. More than six out of ten consumers (61%) will use their mobile phones most frequently to shop online while more than half (58%) will use their  computers. Tablet usage is also gaining traction as a means of accessing online retail sites with more than one third (38%) consumers saying that they will use tablet to shop online. (See Chart 2).

“Mobile phone penetration in Indonesia urban areas’ general population has reached 88%. The device ownership in is by far one of the most significant factors impacting the shopping behaviour of consumers across the country,” emphasises Anil. “Rising affluence, availability of high-speed connectivity and evolving online offerings will compound this effect in the years ahead. With this growth set to continue, e‑commerce represents a huge opportunity for online retailers and operators alike to tap into the expanding online consumer base. The key  to staying ahead of the curve lies in identifying and understanding consumer demand, staying up-to-date with evolving online behaviour and implementing tactics which build a lasting connection with consumers.”

Indonesia digital consumers enjoy going online to shop especially when it comes to read online reviews and product research as they view the internet as a means of checking out products to inform their offline purchases. However, credit card security remains a key concern. Consumers are really cautious when it comes to providing credit card information online. Six of ten consumers (60%) say that they do not trust giving their credit cards information online. Other concerns on online shopping include the shipping cost (50%), and confusion over how shopping website works (49%).  (See Chart 3).

“As concern around providing credit card information online remains a barrier to purchase, providing reassurances around online payment security is essential for online retailers in order to gain the trust of consumers.” said Anil.

Across Southeast Asian markets, the convenience that online shopping brings to time-poor shoppers combined with the availability of product information, reviews and price comparisons are key drivers of online shopping. (See Chart 4).

“The degree to which consumers are browsing online before purchasing offline signals a need for retailers to ensure they do not neglect digital as part of their overall engagement strategy.” Anil concluded.

CHART 1: INTENTION TO PURCHASE PRODUCTS/SERVICES ONLINE IN NEXT SIX MONTHS (TOP FIVE CATEGORIES)

Chart 1 E-Commerce

Source: Nielsen Global Survey of E-Commerce, Q1 2014

CHART 2: DEVICE USED MOST FREQUENTLY TO SHOP ONLINE

Chart 2 E-Commerce

Source: Nielsen Global Survey of E-Commerce, Q1 2014

CHART 3: CONCERNS ON SHOPPING ONLINE

Chart 3 E-Commerce

Source: Nielsen Global Survey of E-Commerce, Q1 2014

CHART 4: TOP THREE DRIVERS OF ONLINE SHOPPING IN SOUTHEAST ASIA

Chart 4 E-Commerce

Source: Nielsen Global Survey of E-Commerce, Q1 2014

About the Nielsen Global Survey

The Nielsen Global Survey of E-commerce was conducted between Feb. 17 and March 7, 2014, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 percent. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

About Nielsen

Nielsen N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands.

[i] While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration is still growing, audiences may be younger and more affluent than the general population. In addition, survey responses are based on claimed behavior, rather than actual metered data.