The Indonesia eTrade Readiness Assessment is the 41st assessment undertaken by UNCTAD globally and the fourth in Southeast Asia, following the ones in Cambodia, Lao PDR and Myanmar. It provides a comprehensive review of the e-commerce and digital trade ecosystem of Indonesia, with recommendations across five policy areas, namely, e-commerce and digital trade policy framework, technology adoption, the performance of MSMEs, the legal and regulatory framework, digital payment systems and financial inclusion.
The main findings are presented below by policy area:
- Indonesia has made significant strides in building the foundation for its digital economy thanks to a series of national policies, highlighting the country’s clear intent to use digital trade as a tool for inclusive economic growth. However, the current policy environment is still consolidating given the fast pace of digital trade development. Mandates and responsibilities often overlap across government ministries and coordination between national and local levels can be irregular. While dialogue between the public and private sectors is increasing, it is still largely influenced by major digital platforms and unicorns. Compilation of data on e-commerce activity and digital trade has vastly improved thanks to the efforts of Statistics Indonesia. To fully unlock the potential of digital trade, Indonesia will need to improve coordination across institutions, clarify roles and ensure policy coherence based on solid data evidence, consensus-building and inclusivity.
- The digital transformation of Indonesia is gaining momentum, with significant improvements in broadband coverage, mobile access and cloud computing, as well as a thriving start-up ecosystem. Government initiatives regarding digital payments and satellite technology showcase a dedication to building advanced digital infrastructure. Most MSMEs now maintain some form of online presence, with the majority relying on social commerce and major marketplaces. However, usage remains shallow among MSMEs and major disparities persist, especially between Java and the outer islands, where access to reliable, affordable Internet remains a challenge. While the country is making progress in rolling out 5G and expanding data centre capacity, issues such as high electricity costs, supply constraints and complex regulations could hinder progress. Bridging those digital divides will be crucial to drive productivity gains across the whole country, not just in the major cities.
- MSMEs are the heart of the economy of Indonesia and more of them are now going online through popular platforms and supported by user-friendly digital storefronts, integrated payment systems and growing logistics support. However, many small business owners, notably in the informal sector, struggle with digital literacy, face complicated regulations and deal with unreliable delivery networks outside major cities. Access to financing is also a common issue. For informal sellers, especially women and young people using social commerce platforms, making the leap to formal business operations can be difficult. Unlocking the full potential of MSMEs in both the national and international digital economy will depend on advancing inclusive policies, expanding tailored support programmes and strengthening infrastructure nationwide.
- Over the past decade, Indonesia has developed a comprehensive legal foundation for e-commerce and digital trade, providing recognition for digital contracts and signatures, defining online consumer rights and strengthening cybersecurity provisions. Enforcement remains uneven and implementation regulations are at times still missing with MSMEs often struggling to navigate overlapping and complex regulations. Through engagement in the Regional Comprehensive Economic Partnership, WTO e-commerce discussions and the ASEAN Digital Economy Framework Agreement and preparations for OECD membership, the country is aligning its position with evolving regional digital norms. Looking to the future, issues such as AI governance, digital trust services and platform competition demand anticipatory regulation. Ensuring coherence, clarity and capacity in implementation will be key to building trust and resilience.
- The booming e-commerce sector of Indonesia has been fuelled by a fast-growing digital payments ecosystem and the country’s financial inclusion rate climbed to nearly 89 per cent in 2024. But many users still do not fully engage with their accounts and gaps in digital literacy and trust continue to limit broader adoption. Recent innovations, are helping to bring services to more remote communities, while fintech companies are expanding their offerings to include things such as microsavings and buy-now-pay-later options. Issues such as uneven Internet access and usage across regions show that more work is needed, especially in boosting digital financial literacy, protecting consumers and improving how those systems connect and work together.
The policy recommendations outlined in the Indonesia eTrade Readiness Assessment are aimed at fostering an enabling e-commerce and digital trade environment for policymakers, consumers and entrepreneurs, encouraging participation in both domestic and global markets, and promoting sustainable development.
This assessment was made possible through the financial support of the E-commerce and Digital Economy Programme Core Donors (Australia, Germany, Switzerland, Sweden and the Kingdom of the Netherlands).