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Courier giants to benefit from Indonesia’s e-commerce boom

Indonesia boasts 90 million internet users with online retail sales of USD2.6 billion in 2014. The e-commerce boom has fed robust growth in express courier services. Recognizing this trend, the Indonesia Supply Chain & Logistics Summit 2015 gathered industry leaders and government officials to discuss key industry trends, opportunities and challenges.

Jeffrey Bahar, Deputy Chief Executive Officer of the Spire Research and Consulting group, was invited as a guest speaker at the Supply Chain & Logistics Summit 2015. In his presentation, Bahar highlighted Indonesia’s booming e-commerce industry, focusing on the surge in the express courier services market.

Bahar mentioned that outsourced/contract logistics services in Indonesia are worth approximately USD29 billion, with more than 2,500 players in 2015. The industry is supported by growth in Gross Domestic Product (GDP) and domestic consumption.

At the same time, Indonesia’s e-commerce market continues to shine. A population of 255 million with an expanding middle-class drive the growth of this sector. Popular e-commerce platforms including OLX, PinkEmma and Bhinneka; there are many more.

Moreover, logistics providers are cashing in on the e-commerce wave. Industry leaders like FedEx Express, First Logistics and DHL Express support deliveries for e-commerce platforms.

Nevertheless, roadblocks remain. Due to inadequate infrastructure, higher logistics costs are incurred – which means longer shipping lead times that dampen consumer enthusiasm. Moreover, Indonesia is a cluster of around 20,000 islands, which poses a geographical disadvantage. Other limitations include poor execution of government initiatives as well as limited skilled logistics workers.

Bahar’s presentation deck on “The Rise of Express Courier in E-commerce Business” can be found here.


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