Triyan Pangastuti, Jakarta – E-commerce transaction value is projected to hit Rp 395 trillion, or approximately around $27.5 billion, by the end of 2021, a senior official said on Monday.

That marks a 48.5 percent increase from last year's transaction value, which stood at Rp 266 trillion. The projected growth is in line with how people now embrace digital transactions. Not to mention the digital transformation of the payment system.

"This increase is in line with digital economy growth, the rise in fintech, as well as the improving ease of access to digital banking," Coordinating Minister for Economic Affairs Airlangga Hartarto told the 9th US-Indonesia Investment Summit on Monday.

Digital banking transactions will also enjoy quite significant growth. Its transaction value is expected to jump 30.1 percent from Rp 27,356 trillion in end-2020 to Rp 35,600 trillion this year. Digital banking will see a transactional volume of 7.25 million, up from 4.9 million transactions.

Electronic money transactions will soar 35.7 percent from a year earlier to Rp 278 trillion at the end of the year. Its transactional volume will also likely hit 5.2 million transactions, according to Airlangga.

"The enhancement of digital transactions has become crucial, and contributes to Indonesia's economic recovery during the pandemic," Airlangga said.

According to the minister, Indonesia has a high digital adoption. The country is also home to a large population with a great portion being in the productive age group. As many as 45 percent of Indonesians also use e-commerce to sell their products.

"The average daily internet usage is almost 9 hours per day. The average social media use of users in Indonesia reaches 3 hours and 14 minutes," Airlangga added.

About 72.73 percent of the total digital economy transactions in Indonesia come from e-commerce. This makes e-commerce a major contributor to Indonesia's rapid digital economy growth, according to Airlangga. He also hoped Indonesia's digital economic activity could continue to increase.

Indonesia's digital economy grew to $44 billion in 2020. The archipelagic country accounts for 41.9 percent of Asean's digital economy, which was valued at around $105 billion last year. Indonesia's digital economy is expected to reach $124 billion in 2025.

Source: https://jakartaglobe.id/business/ecommerce-transaction-value-to-hit-275b-in-202