Home Blog Opening an E-commerce Company in Indonesia Business Setup | Company Registration | Indonesia Opening an E-commerce Company in Indonesia InCorp Editorial Team 6 September 2024 9 reading time Table of Contents What is E-commerce in Indonesia? Top 12 E-commerce Companies in Indonesia The Trend of E-commerce Business Sectors in Indonesia Foreign Investment in Indonesia's E-Commerce Sector Types of E-Commerce Businesses in Indonesia Steps to Establish an E-Commerce Company in Indonesia 2024 Updates on E-Commerce Business Regulations Establish an E-commerce Company in Indonesia with InCorp Since Presidential Decree No. 44 Year 2016 was issued, foreign investors can now open an e-commerce company in Indonesia with 100 percent full ownership for foreigners. This condition opens an opportunity for e-commerce businesses to expand fully in Indonesia. This article will explain how to establish an e-commerce business in Indonesia. Since there are many requirements, you must pay attention to every detail to welcome this opportunity. What is E-commerce in Indonesia? E-commerce in Indonesia encompasses various online platforms, including marketplaces, daily deal websites, price comparison services, and listing sites. These platforms allow businesses to reach consumers and offer products or services online. Market Size of E-Commerce in Indonesia The Indonesian e-commerce market is projected to grow from USD 52.93 billion in 2023 to USD 86.81 billion by 2028, with a compound annual growth rate (CAGR) of 10.4% over the forecast period (2023-2028). In 2022, Indonesia led the ASEAN region with USD 51.9 billion (approximately IDR 778.8 trillion) in e-commerce revenue. Overall, ASEAN’s e-commerce revenue in 2022 totaled USD 99.5 billion, with Indonesia accounting for 52% of that figure. READ MORE: Exploring the Promising Future of E-Commerce in Indonesia Top 12 E-commerce Companies in Indonesia Indonesia’s e-commerce landscape has rapidly evolved into one of Southeast Asia’s largest and most dynamic markets. With a growing digital economy, the country hosts several prominent platforms featured on Indonesia’s list of e-commerce companies, catering to millions of consumers and businesses. Shopee Shopee is one of the biggest e-commerce in Indonesia, with over 57% of businesses using it as their primary sales channel. Its parent company, SEA Group, went public in 2017. Shopee’s free shipping (Gratis Ongkir Rp 0) helped it gain popularity quickly. It also offers ShopeePay for payments and ShopeeFood for food delivery. Tokopedia Founded in 2009, Tokopedia is a central Indonesian e-commerce platform that offers services such as online shopping, digital payments, and travel bookings. It merged with Gojek in 2021 to form GoTo, listed on the Jakarta Stock Exchange. Recently, TikTok acquired a 75.01% stake in Tokopedia, enhancing its position in Indonesia’s e-commerce market. Blibli Backed by the Djarum Group, Blibli focuses on lifestyle and household goods and serves B2B, B2C, and B2B2C markets. As one of the top e-commerce in Indonesia, Blibli offers services like Click & Collect, BliPay, and Paylater. It has also acquired Tiket.com and a supermarket operator, further expanding its business. Lazada Lazada, launched in 2012 and backed by Alibaba, is an e-commerce player in Southeast Asia, including Indonesia. Lazada’s platform helps businesses, especially tiny ones, reach consumers easily. Its LazMall guarantees 100% authentic products and offers fast delivery and easy returns. Bukalapak Bukalapak helps small businesses, mainly traditional warungs, sell online. It provides services like bill payments and supply chain support. Transactions during the pandemic rose 130%, and Bukalapak now supports 13.5 million MSMEs. Bhinneka Bhinneka, founded in 1993, is a veteran of Indonesia’s e-commerce scene. Initially focused on gadgets, it has since expanded into groceries, industrial equipment, and healthcare products, mainly serving B2B customers. Orami Orami, established in 2016, is the largest online platform for parents in Indonesia. It offers a marketplace, parenting guides, and community support. The platform attracts 26.3 million monthly visits and is popular among young parents seeking advice and products. Ralali Ralali is a B2B marketplace similar to Alibaba. It connects suppliers with buyers in office supplies, medical equipment, and agriculture. Through partnerships with banks and FinTech companies, it also provides financial and logistics support. Sociolla Sociolla is Indonesia’s top beauty e-commerce platform, known for its eco-friendly practices and extensive product range. With over 30 million users and stores across Indonesia and Vietnam, Sociolla is a leader in the country’s growing beauty industry. Zalora Zalora is a leading online fashion retailer in Southeast Asia, offering products from over 500 local and international brands. Its efficient logistics network allows fast delivery across Indonesia, making it the top online fashion destination in the country. MatahariMall Launched by Matahari Department Store in 2015, MatahariMall attracts over 30 million monthly visitors. It offers a wide range of products, maintaining the high standards of its parent company and making it a significant player in Indonesia’s e-commerce market. JD.ID JD.ID, a joint venture between JD.com and Provident Capital Partners, entered Indonesia in 2015 and was known for its vast product selection and fast delivery. At its peak, JD.ID had over 60 million monthly visitors in the Indonesian e-commerce market. However, the company ceased operations on March 31, 2023. The Trend of E-commerce Business Sectors in Indonesia The e-commerce market in Indonesia is rapidly expanding, driven by technological improvements and changing consumer behavior. As one of Southeast Asia’s largest economies, Indonesia is experiencing a surge in online retail, fueled by increasing internet access, smartphone adoption, and the rising demand for fashion and lifestyle products. Rising Internet and Smartphone Usage Indonesia has steadily increased internet penetration, growing from 78.1% in 2023 to 79.5% in 2024. This, coupled with the widespread availability of smartphones, is fueling the e-commerce industry. With smartphone adoption expected to rise to 94% by 2028, Indonesians can conveniently shop online, driving the growth of online retail. Growing Fashion and Apparel Segment With higher disposable incomes and greater fashion consciousness, Indonesian consumers increasingly use e-commerce for fashion and apparel. Mobile commerce is booming, and retailers are optimizing their platforms for mobile shoppers, further accelerating growth in this sector. Foreign Investment in Indonesia’s E-Commerce Sector Indonesia’s e-commerce sector presents promising opportunities for foreign investors. With the right level of capital investment, foreign entities can own a significant portion, or even 100%, of e-commerce businesses in the country. 100% Foreign Ownership: Eligibility and Requirements Foreign investors can own 100% of an Indonesian e-commerce company if they invest a minimum of IDR 100 billion (around US$7.4 million). For companies investing less than this threshold, foreigners are limited to 49% ownership. However, businesses investing under IDR 10 billion can still be wholly owned by foreigners if they create at least 1,000 local jobs. E-Commerce Businesses Eligible for 100% Foreign Ownership: Reservation Platforms: Websites that allow users to book services such as hotels or restaurants. Web Portals: Platforms that host user-generated content, including articles, audio, and videos. Marketplace Platforms: Websites facilitating transactions between buyers and sellers. E-Commerce Businesses with Ownership Restrictions: Content Publishing Sites: Platforms where the company creates and publishes written, audio, or video content. Ad-Supported Marketplaces: Marketplaces that offer sellers advertising opportunities. Distribution Services: Websites providing delivery services. Foreign Investment Rules for E-Commerce with Less Than IDR 100 Billion Businesses with investments below IDR 100 billion can operate in Indonesia under the Micro, Small, and Medium Enterprises (MSME) regulations from Government Regulation No. 17 of 2013, but foreign ownership is capped at 49%. Micro Enterprises: Investments below IDR 50 million, with annual revenue up to IDR 300 million. Small Enterprises: Investments between IDR 50 million and IDR 500 million, with annual revenue from IDR 300 million to IDR 2.5 billion. Medium Enterprises: Investments between IDR 500 million and IDR 10 billion, with annual revenue from IDR 2.5 billion to IDR 50 billion. Types of E-Commerce Businesses in Indonesia Indonesia’s e-commerce landscape consists of various business models catering to different markets. This section explores the main types of e-commerce businesses and highlights the opportunities they present for entrepreneurs and investors. Business-to-Consumer (B2C): The fastest-growing sector, focusing on consumer needs. Business-to-Business (B2B): E-commerce serves the needs of other businesses. Business-to-Government (B2G): Platforms catering to local, regional, and central government needs. Steps to Establish an E-Commerce Company in Indonesia Here are the legal steps for opening an e-commerce business in Indonesia for both big companies and micro, small, and medium enterprises: Register Your Company Begin by preparing the company deed and consulting with a notary. The notary will verify the availability of your company name through the Ministry of Law and Human Rights and issue the necessary documents for registration. Obtain a Domicile Letter Secure a domicile letter from the local government office where your business will be located. This document is essential for further registration steps. Get a Tax ID With your domicile letter, you can obtain a Tax ID (NPWP) and a tax card from the local tax office. This step is crucial for tax compliance. Register with the Ministry of Law and Human Rights Register your company online with the Ministry of Law and Human Rights. Ensure you include all required documents, such as bank and transaction statements. Obtain SIUP and TDP After completing the registration process, obtain your SIUP (Business Trading License) and TDP (Company Registration Certificate) from the regional one-stop-service office. These documents confirm your business’s legal status. Register with the Ministry of Manpower If your business employs more than ten staff with a minimum salary of IDR 1 million, register with the Ministry of Manpower. This registration includes obligations for worker insurance and health coverage. Launch Your Business Once you have completed all the legal requirements, you can start setting up and operating your e-commerce company in Indonesia. 2024 Updates on E-Commerce Business Regulations As of 2024, entrepreneurs interested in opening an e-commerce company in Indonesia must satisfy the following requirements. Local and Foreign E-Commerce Organizers (PPMSE) Must apply for an E-commerce Trade Business License (SIUPMSE). Foreign PPMSE must establish a representative office for foreign trade. Local and Foreign E-Commerce Merchants Local merchants need a proper trade business license for e-commerce. Local merchants must obtain an SIUPMSE on their e-commerce platforms. Foreign merchants must register their business licenses with a local PPMSE. Local and Foreign Intermediary Services Organizers (PSP) Must obtain a SIUPMSE unless they are not directly involved in e-commerce transactions as beneficiaries or intermediaries. Guide to Doing Business in Jakarta Mailchimp Free eBook Indonesia Business Insight Full NameEmail I have read InCorp's Privacy Policy and agree to InCorp using my information provided to contact me about related content, and services.*Subscribe Establish an E-commerce Company in Indonesia with InCorp At InCorp, we offer comprehensive services to support businesses of all sizes, from micro, small, and medium enterprises to large corporations. Whether you want to establish a wholly foreign-owned e-commerce company or expand your existing operations, we provide the expertise and support you need. Why Choose InCorp? Faster Time-to-Market: Our streamlined processes ensure you can launch and operate your e-commerce business in Indonesia without unnecessary delays. Reduced Costs: Leverage our expertise to avoid costly mistakes and optimize your business operations efficiently. Enhanced Market Entry: Benefit from our in-depth knowledge and support to smoothly navigate the Indonesian e-commerce landscape. Peace of Mind: Rest easy knowing your business complies with local regulations and is backed by seasoned professionals. Our Services Include Company Registration: Establish your business with all the necessary legal documentation. Business Licensing: Secure the appropriate licenses to operate legally in Indonesia. Tax Compliance: Ensure your business meets all tax requirements and obligations. HR Advisory: Get expert advice on managing your workforce and complying with local employment laws. Ready to start your e-commerce venture in Indonesia? Fill out the form below to get started with InCorp. Read Full Bio Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.