Sector Trend Analysis – E-commerce market trends in Indonesia

Socioeconomic profile

Economic profile

In 2024, Indonesia's GDP growth eased slightly to 5.03%, down from 5.05% in 2023 and below the government's 5.2% target, due to softer public consumption and external headwinds such as global economic uncertainty and potential U.S. tariffs (Indonesia Business Post & Reuters, 2025). Nonetheless, robust investment, at its fastest pace in six years, and strong government spending on infrastructure and social programs helped sustain economic momentum (Reuters, 2025). GDP per capita rose modestly to US$4,960, reflecting steady progress but remaining below the global average (Antara News, 2025). Looking ahead, Indonesia's economy is expected to grow at an average annual rate of 5.1% in real terms from 2024 to 2028, outpacing the Asia Pacific average of 4.3%. However, external risks–including global economic uncertainty and geopolitical instability–could weigh on this outlook (Euromonitor International, 2024).

Demographic trends

By 2040, Indonesia is projected to become the world's 5th largest country, with a population of 312 million, accounting for 3.4% of the global total. This increase will be driven by natural change and net migration, with a relatively young median age of 35.3 compared to the Asia Pacific average of 38.7. Mid-lifers (aged 45-64) will form the largest age group, while life expectancy is expected to rise to 73.5 years. The population aged 0-14 will grow by 8.4% from 2024, and those aged 65+ will increase by 82.9%, pushing the old-age dependency ratio to 18.0%, still below the regional average of 25.1%. Urbanisation will accelerate, with 68.1% of the population living in cities, up from 59.2%, as people seek better opportunities, making Jakarta the largest city with 11.9 million residents. Consumer expenditure is forecast to more than double (up 101.6%), supported by a 17.6% rise in middle-class households, while generational preferences will continue to shape demand. Meanwhile, birth and fertility rates will decline, with the birth rate falling from 15.8 to 13.6 per 1,000 and the fertility rate stabilising at 1.9, as more women delay childbirth due to financial, educational, and career considerations. These demographic shifts will significantly influence consumer markets, requiring businesses to adapt their strategies to evolving needs across age groups and urban centres (Euromonitor International, 2025).

Consumer income and expenditures

Indonesia is set to experience strong income and consumer market growth through 2028, driven by rising disposable income, declining unemployment, and structural economic reforms. Between 2023 and 2028, per capita disposable income is projected to grow by 22.9% in real terms–outpacing the Asia Pacific average–supported by productivity gains, infrastructure investments, and a young workforce. However, income inequality remains pronounced, with the top 10% of households holding 30% of total disposable income, while 60% of the workforce remains in informal employment. Meanwhile, consumer expenditure is expected to increase by 27.9% over the same period, with discretionary spending surpassing essential spending and household goods and services seeing the fastest growth. Food and non-alcoholic beverages will remain the top spending category, while regions like Papua and Jawa Barat will see the most dynamic growth. By 2030, Indonesia's affluent class–just 0.1% of the adult population–is expected to control nearly a third of national wealth, fueling growth in premium and inconspicuous consumption, including luxury goods, services, and wellness-related categories (Euromonitor International, 2024).

Between 2020 and 2024, per capita consumer expenditure in Indonesia grew at a CAGR of 4.6%, reaching US$2,679.7, while per capita disposable income increased at a similar pace of 4.7% to US$2,950.9. Looking ahead, spending is expected to accelerate slightly, with a projected CAGR of 5.1% from 2024 to 2029, outpacing income growth at 5.4%. Food remains a key component of household budgets, with food expenditure expected to rise 5.1% annually between 2024 and 2029. Within food categories, meat, fish and seafood, and vegetables will see the strongest gains, growing at 6.0%, 5.1%, and 5.5% respectively, reflecting dietary diversification and rising protein demand. Notably, alcoholic drinks and catering show robust projected growth (5.2% and 5.4%), indicating increased out-of-home consumption. While staple items like bread and cereals and oils and fats grow more moderately, premium and discretionary food categories are poised to benefit from expanding middle-class spending. Overall, the forecast suggests continued income growth and a shift toward higher-value consumption.

Consumer profile

Indonesia's rapidly expanding middle class, driven by economic growth and a young, tech-savvy population, is reshaping the food and drink landscape through increased engagement with e-commerce and digital platforms. Consumers–particularly Millennials and Gen Z–are blending convenience with wellness, seeking healthier, eco-friendly, and high-quality products while maintaining value-conscious habits amid rising living costs. While 51% actively hunt for bargains and 20% plan to buy more private label goods, over half prefer to buy fewer, better-quality items that align with their health and ethical values, such as non-GMO or sustainably sourced options (Euromonitor International, 2024). Health consciousness is surging, with more consumers seeking healthy ingredients, reading nutrition labels, and showing a willingness to pay more for foods with added health benefits (Euromonitor International, 2024). This shift is contributing to reduced meat and alcohol consumption, alongside increased demand for plant-based, functional, and convenient meal solutions like ready meals and food delivery–particularly popular among Millennials (Euromonitor International, 2024). E-commerce adoption is accelerating, supported by the Digital Indonesia Roadmap and widespread mobile connectivity, with 47% of consumers shopping online weekly, motivated by convenience, competitive pricing, and delivery options. Despite a continued preference for in-store product experiences, digital engagement is deepening through live shopping and brand storytelling. As trust, identity, and inclusivity increasingly influence purchasing decisions, consumers–especially affluent ones–are driving the premiumization of groceries, favouring innovative, sustainable, and wellness-oriented offerings while demanding seamless, personalized experiences across online and offline channels (Euromonitor International, 2024).

Global e-commerce market

In 2024, global retail e-commerce sales reached US$4.2 trillion, up from US$2.8 trillion in 2020, growing at a solid CAGR of 10.1%. China and the U.S. remained the dominant markets, with China growing faster at 11.2% annually over 2020-2024 and projected to expand even more rapidly at 12.6% through 2029, while U.S. growth is expected to slow to 6.8%. Among emerging markets, India and Indonesia posted exceptional growth–17.9% and 21.8%, respectively–outpacing most mature markets and set to maintain strong double-digit CAGRs through 2029. Russia stood out with the highest historical CAGR (34.8%) from 2020 to 2024, though its growth is forecast to moderate to 7.5%. Japan was the only top-ten market to contract (−4.2%) between 2020 and 2024, but is expected to rebound modestly. Meanwhile, markets like the UK, Germany, and Canada grew slowly but are forecast to see steadier gains through 2029. Overall, the global landscape is shifting, with emerging economies driving the next phase of e-commerce expansion.

In 2024, grocery e-commerce sales in the Indo-Pacific region reached US$85.0 billion, growing at a CAGR of 9.5% since 2020. China dominated the market with over half the total share (50.2%) and an 11.5% CAGR, reinforcing its central role in regional growth. Japan, once a key player, experienced a steady decline at −5.4% annually, dropping its share to 18.2%. Meanwhile, high-growth emerging markets are rapidly gaining ground–India led with a staggering 46.4% CAGR, growing from US$1.6 billion in 2020 to US$7.4 billion in 2024, now holding 8.7% of the market. Similarly, Thailand (48.7% CAGR), the Philippines (24.4% CAGR), and Indonesia (19.5% CAGR) demonstrated dynamic expansion, albeit from smaller bases. Australia stood out among developed markets with strong growth (16.9% CAGR), now accounting for 10.8% of the total.

E-commerce in Indonesia

Between 2020 and 2024, Indonesia's retail e-commerce sector grew rapidly at a CAGR of 21.8%, with sales more than doubling from US$27.7 billion to US$61.1 billion. This strong momentum is expected to continue, with a projected CAGR of 15.0% from 2024 to 2029, reaching US$123.0 billion. In contrast, offline retail sales grew modestly at 2.7% annually during 2020-2024, rising from US$112.6 billion to US$125.4 billion. Growth is forecast to accelerate slightly to 4.4% annually through 2029, bringing offline sales to US$155.9 billion. While offline retail remains larger in absolute terms, the significantly faster growth of e-commerce indicates a clear and ongoing shift in consumer shopping behavior toward digital channels in Indonesia.

In 2024, Indonesia's retail e-commerce market continued its strong growth, driven by rising internet penetration, expanding smartphone use, and broader access in rural areas. E-commerce, initially boosted by the COVID-19 pandemic, has remained robust as consumers became accustomed to the convenience and pricing advantages of online shopping. Retailers have responded with significant investment in digital infrastructure, delivery services, and pricing strategies that appeal to price-sensitive Indonesian consumers. Platforms like Shopee, Tokopedia, and Lazada have made brand switching and deal-hunting easier, especially in a challenging economic climate. Growth has also been supported by the rise of the middle class and fintech innovations that have enhanced access to digital payments (Euromonitor International, 2024).

Leading platforms Shopee and Tokopedia continued to expand in 2024 through innovation, strategic collaborations, and strong rural outreach. Shopee maintained its lead by enhancing transaction quality and adding features like Shopee Live and Shopee Affiliate, which supported small businesses and drove engagement through promotions such as free delivery and bonus events. Tokopedia, meanwhile, leveraged a high-profile collaboration with TikTok, integrating social media with e-commerce through both online and offline campaigns, including major festivals and influencer marketing. Sale events like Harbolnas and religious holidays further boosted sales, as did Tokopedia's support of local fashion brands. These developments demonstrate how digital platforms are shaping Indonesia's evolving retail landscape by blending convenience, entertainment, and inclusivity (Euromonitor International, 2025).

Retail e-commerce in Indonesia is expected to experience strong growth driven by increasing internet penetration, a young tech-savvy consumer base, and government and investment support. Festive promotions during Ramadan, Eid, and special sales dates capitalize on local consumers' price sensitivity and low brand loyalty. While logistical challenges in delivering to remote areas remain, e-commerce players are enhancing customer experience through improved services and adaptive digital strategies amid fierce competition. Live streaming and TikTok Live are expanding rapidly by offering interactive shopping experiences and exclusive deals that appeal to impulse buyers. Furthermore, advancements in AI, machine learning, and automated delivery technologies are boosting sales by enabling better consumer insights, faster deliveries, and greater convenience, fueling the ongoing expansion of Indonesia's digital retail ecosystem (Euromonitor International, 2025).

E-commerce market sizes

The retail sales data for food and drinks in Indonesia from 2020 to 2024 reveals a significant shift towards e-commerce, with overall sales in this channel growing much faster than offline sales across most categories. While offline sales of food and drinks increased at a CAGR of 5.5%, reaching US$55.9 billion by 2024, e-commerce sales surged with an impressive 33.5% CAGR to US$2.0 billion. This rapid growth is particularly evident in categories such as sauces, dips and condiments (90.4% CAGR), sweet spreads (92.7% CAGR), and sweet biscuits, snack bars and fruit snacks (102.4% CAGR). Meanwhile, staples like rice, pasta and noodles also saw strong e-commerce growth at 45.6% CAGR, reflecting the increasing consumer demand for online convenience.

Despite the dominance of offline sales, which remain the primary channel for categories such as rice, pasta and noodles, dairy, and alcoholic drinks, e-commerce is rapidly gaining traction. Offline sales showed moderate growth overall, with some categories like edible oils and confectionery experiencing slight declines. The expansion of e-commerce is driven by rising internet penetration and digital adoption, with categories like plant-based dairy and processed meat seeing double-digit online growth rates of 37.0% and 56.7% CAGR, respectively. This trend underscores Indonesia's ongoing digital transformation in retail food and drinks, highlighting a market where e-commerce is quickly becoming a key driver of value growth.

In 2024, foodservice e-commerce in Indonesia experienced a further decline in current value terms, mainly due to reduced purchasing power among lower-middle income consumers, who shifted away from online food delivery toward more affordable offline alternatives. In response, major players like Grab and GoFood introduced aggressive promotions such as free or reduced delivery fees to retain users, capitalizing on Indonesians' strong price sensitivity. Meanwhile, geopolitical boycotts of certain international foodservice brands prompted wealthier consumers to switch to non-boycotted alternatives, while price-conscious consumers turned to street vendors and small local grocers, further contributing to the decline in e-commerce foodservice spending (Euromonitor International, 2025).

Key e-commerce retailers

From 2020 to 2024, Indonesia's e-commerce market grew significantly, with total retail sales rising from US$27.7 billion to US$61.1 billion at a robust CAGR of 21.8%. Sea Ltd (operator of Shopee) maintained its leading position with a 2024 market share of 40.0% and a CAGR of 30.5%, while ByteDance Ltd (operator of TikTok Shop) emerged rapidly, capturing 36.1% market share by 2024 despite entering the market only in 2021. Bukalapak.com also demonstrated strong growth (CAGR 27.5%), securing 9.8% of the market in 2024. In contrast, players like Rocket Internet, Giosis Group, and Apple Inc experienced declining sales, with negative CAGR values, while the "Others" category plummeted by 37.1% CAGR–indicating consolidation and market dominance by top players.

In 2024, Indonesia's retail e-commerce sector experienced accelerated growth, surpassing the rate recorded in 2023, driven by increasing internet penetration, evolving consumer behavior, fintech advancements, and aggressive discount campaigns. Platforms like Shopee and Tokopedia saw strong gains, aided by livestreaming and strategic partnerships such as Tokopedia's integration with TikTok. Key sales events like Harbolnas, monthly Double Digit festivals, and festive season promotions also fueled momentum. Meanwhile, regulatory changes under Permendag 31/2023 curbed cross-border e-commerce for low-value imports under IDR 1.5 million, aiming to reduce predatory pricing and level the playing field for local SMEs, who are expected to benefit from the protective measures (Euromonitor International, 2025).

Trade overview and opportunities for Canada

Indonesia's consumer-oriented agri-food imports from the world reached US$7.8 billion in 2024, growing at a CAGR of 7.2% from 2020. China maintained its lead as the top supplier, expanding its share with a 9.7% CAGR to US$2.5 billion. Australia and New Zealand also posted strong growth at over 10% annually. In contrast, imports from the US declined significantly, with a −7.2% CAGR, dropping from US$714.1 million in 2020 to US$529.1 million in 2024. Malaysia emerged as a fast-growing supplier, rising 15.1% annually, while Vietnam, though smaller in absolute terms, recorded the fastest growth at 28.8% CAGR. Meanwhile, Canada ranked 41st with declining exports, falling by half since 2020 to just US$7.6 million in 2024.

Canada's exports of consumer-oriented agri-food products to Indonesia reached US$16.1 million in 2024, growing modestly at a CAGR of 4.9% since 2020. Growth was primarily driven by surging shipments of fresh or chilled potatoes (HS 070190), which soared to US$7.9 million, expanding at a remarkable 37.4% CAGR and now accounting for nearly half of Canada's exports in this category. Exports of food preparations (HS 210690) also showed strong performance, growing 15.5% annually to US$6.4 million. Although smaller in value, mustard exports (HS 210330) rose sharply from near-zero levels to US$415,700, achieving the fastest CAGR at 125.7%. In contrast, frozen French fries (HS 200410) and pet food (HS 230910) saw sharp declines, with CAGRs of −27.1% and −15.0% respectively. While some high-value niche products like frozen fruit and preserved cranberries posted strong growth, they remained limited in volume. Overall, Canada's performance reflects strength in selected high-demand items but highlights the need for broader diversification to increase competitiveness in Indonesia's expanding consumer food market.

Trade assistance for Canadian exporters

Canada Agriculture and Food Trade Commissioner Service (TCS) can help companies who are looking to start doing business online with customers abroad, or who are already selling internationally. TCS' CanExport SMEs program offers up to CAD$50,000 to:

• help you break into international markets
• cover some costs related to digital adoption such as adaptation and translation of marketing tools
• search engine optimization
• expert advice from legal and business experts
• intellectual property protection

In addition to CanExport SMEs, CanExport Innovation will prioritize applications targeting countries in the Indo-Pacific region–including Indonesia–for its June 2025 intake. Canadian innovators can access up to CAD$75,000 in funding, covering up to 75% of eligible costs to support R&D and commercialization of food tech or agri-innovation through collaborative agreements with international partners.

Export Development Canada (EDC) has built Export Help Hub which is "a collection of free, reliable resources about international sales, up-to-date market insights, regulations on customs, taxes and logistics and other related topics. With EDC's US market expertise, Canadian exporters will get trustable information about customs, market research, paying taxes, setting up US operations and more" (EDC, 2025)

Business Development Bank of Canada (BDC) provides e-commerce toolkit and suite of solutions to help Canadian entrepreneurs with various projects related to their online presence. Plus, BDC can finance the cost of its advisory services.

Post Canada offers e-commerce solutions and resources for Canadian exporters. Its e-commerce service can "help you turn online browsers into buyers, use your inventory more effectively, give your customers a great receiving experience, and build loyalty with them by offering easy returns" (Post Canada, 2021).

The Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA), concluded in December 2024 and scheduled to be signed in 2025, offers significant benefits for Canadian agri-food and seafood exporters seeking to enter or expand in the Indonesian market. The CEPA will eliminate tariffs on over 95% of Canadian exports to Indonesia, offering substantial opportunities for agri-food and seafood producers (Global Affairs Canada, 2025).

Please consult Canada-Indonesia CEPA: Summary of benefits and negotiated outcomes for additional information regarding CEPA and what it can do for your business.

Product launch analysis

Between 2020 and 2024, the number of new online food and drink product launches in Indonesia declined steadily from 1,758 in 2020 to 1,141 in 2024, reflecting a post-pandemic normalization. Despite the drop in total launches, some categories showed resilience–hot beverages grew to 191 new products in 2024, up from 149 in 2023, and snacks remained stable at 138 launches. Sauces & seasonings and bakery categories showed modest rebounds in 2024 after previous declines. On the claims front, halal certification remained dominant with 775 claims in 2024, while no additives/preservatives and free from artificial preservatives saw continued decline. Social media-linked claims remained strong, indicating the continued influence of digital engagement on consumer purchases.

In terms of price positioning, the majority of new products in 2024 were priced under US$6.02, highlighting the strong price sensitivity of Indonesia's online consumer base. Shelf-stable products dominated launches (968 in 2024), while frozen and chilled product innovations dropped sharply–chilled product launches, for example, fell from 204 in 2020 to just 19 in 2024, likely due to logistical constraints in cold-chain e-commerce. Among companies, BeOrganik had a spike in 2021 but minimal activity thereafter, and only a handful of firms like NutriFood and Nourish Indonesia consistently launched new items. Most launches were new products or range extensions, while relaunches and new formulations remained rare. These trends suggest a cautious, value-oriented approach among manufacturers targeting Indonesia's evolving e-commerce food market.

Product examples

For more information

The Canadian Trade Commissioner Service:

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

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For additional information on Food and Hospitality Indonesia please contact:

Michelle Jardine, Deputy Director
Indo-Pacific Market Development and Promotion
Agriculture and agri-food Canada
michelle.jardine@agr.gc.ca

Resources

• Antara News, February 2025: Indonesia's GDP per capita rises to Rp78.62 million in 2024
• Euromonitor International, database 2025
• Euromonitor International May 2024: Economy, Finance and Trade: Indonesia
• Euromonitor International, June 2024: Income and Expenditure: Indonesia
• Euromonitor International, June 2024: Consumer Lifestyles in Indonesia
• Euromonitor International, July 2024: PEST Analysis: Indonesia
• Euromonitor International, November 2024: Indonesia: Consumer Profile
• Euromonitor International, September 2024: Megatrends in Indonesia
• Euromonitor International, April 2025: Indonesia in 2040: The Future Demographic
• Euromonitor International, March 2025: Retail E-Commerce in Indonesia
• Euromonitor International, April 2025: Digital Shopper in Indonesia
• Indonesia Business Post, May 2025: Indonesia's economic growth in 2024 misses target
• Reuters, February 2025: Indonesia's economy expands 5% in 2024, more rate cuts seen in bumpy 2025
• Reuters, April 2025: US tariffs may cut Indonesia growth by up to 0.5 percentage points, minister says

Sector Trend Analysis – E-commerce market trends in Indonesia
Global Analysis Report

Prepared by: Zhi Duo Wang, Market Analyst

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