Denise Stiady, Jadetimes staff
Denise Stiady is a Jadetimes news reporter covering Business News
Indonesia's e-commerce market is expected to reach $86.81 bn by 2028 with the surge of independent fashion labels, going head-to-head with behemoths like Zara, H&M, and Bershka. Local enterprises have flourished post-Covid, seizing control of Indonesia’s fashion landscape. Kadaka is a prime example, an online fashion brand witnessing exponential growth since its inception in Indonesia’s online market. Born amidst the pandemic, Kadaka now dispatches over 20,000 clothing pieces across Indonesia and Southeast Asia, generating approximately IDR 4 bn ($248,663) monthly pre-tax revenue.
Claudia Juliana, Kadaka’s co-founder, outlined her strategy for competing with fashion giants: offering competitively priced products to consumers. “During Covid, online fashion typically ranged around IDR 300,000 ($18.65). We broke the mould by offering culotte trousers at IDR 99,000 ($6.15), catapulting to the top spot on Shopee. Within ten months, garments under IDR 100,000 ($6.22) became a Shopee trend, with numerous stores pricing items below IDR 50,000 ($3.11). We introduced clothing for couples to stay ahead, sparking a wave of imitations. Because of that, we launched family clothing sets,” Juliana explained.
With a population exceeding 200 mn, Indonesia boasts a burgeoning online market, with Shopee reigning as the premier online marketplace for Indonesian consumers. According to the International Trade Administration, Indonesia’s e-commerce market is projected to surge from $52.93 bn in 2023 to $86.81 bn by 2028. In 2022, Indonesia accounted for 52 per cent of ASEAN e-commerce revenue, amounting to $51.9 bn.
Data released by TMO Group in 2024 indicates Shopee as the most frequented and downloaded e-commerce platform among Indonesian users. The Singaporean-owned company garners 227.6 mn visits and 7.7 mn downloads monthly as of February 2024. Following that is Tokopedia, an Indonesian-owned e-commerce platform, which ranks as the second most utilised platform, with 95.6 mn visits and 2.4 mn monthly downloads.
The rapid growth of Indonesia’s online market accelerated during Covid, with retail closures compelling people to embrace online shopping. Aurelia Wijaya, a fashion marketing diploma candidate at Raffles College of Higher Education Kuala Lumpur, Malaysia, said: “Covid reshaped consumer behaviour, with Indonesians favouring online shopping for its convenience and promotional offers absent in physical stores.”
Wijaya highlighted Indonesian consumers’ propensity for impulsive buying and attraction to steep discounts, underpinning Shopee’s ascendancy. “Shopee hosts numerous sales events like 11.11, 12.12, Christmas, Ramadan, and Chinese New Year, bolstered by innovative marketing campaigns and influencer partnerships, fostering consumer trust,” said Wijaya.
Nita Belinda, co-founder of Wear Duwa, a women’s clothing brand on Shopee, opted for Shopee due to its popularity among Indonesian women, contrasting with men’s preference for Tokopedia. “We also considered having our own website because Shopee takes 6 – 8 per cent of our income. However, the Indonesian market is not used to shopping on independent websites and prefers to go to marketplaces such as Shopee and Tokopedia,” said Belinda.
Juliana favoured Shopee for its widespread adoption and user-friendly interface. “Shopee prioritised cheap price products and is user-friendly with their product recommendations. It’s easier for customers to discover our products. They also often offer discounts to sellers to use their live-streaming platform,” said Juliana. However, Juliana said that TikTok shop was the most convenient marketplace as the team were very responsive and quick to fix problems. Unfortunately, TikTok shop is banned in Indonesia as the government said that social platforms are not permitted to become a marketplace.
Despite the popularity of Shopee, they took big chunks of sellers’ revenue compared to any other marketplace. “When they give discounts to customers, they cover the difference between the price we offer and the discounted price they offer to the customers. However, they cut our revenue up to 11 per cent from the full-priced item to cover the promotions they give customers. If you want to join their free delivery program, they will cut three per cent more of our revenue,” said Juliana.
Wijaya underscored fashion and apparel’s online success in Indonesia, attributing it to mobile-friendly interfaces and localised content catering to Indonesian tastes. Leveraging relatable branding and utilising owners and staff as models compared to traditional fashion marketing used by the big brands further endear local brands to Indonesian consumers. “Indonesians gravitate towards localised content that resonates with their culture and preferences,” Wijaya added.
Belinda observed a shifting consumer preference towards local brands, citing their perceived prestige and easy influenceability among Indonesian consumers. “Nowadays, many Indonesians prefer local brands to mainstream brands such as Zara or H&M. For them, local brands have their own prestige. Indonesian consumers are also very easily influenced by each other: they tend to copy what other people own,” said Belinda.
The rapid growth in online business means tougher competition in the market. “The competition in the Indonesian online fashion market is very tough because anyone can create a clothing brand in Shopee, Tokopedia, or any marketplace. To compete, you must be a trendsetter and offer a good-quality product at a cheap price. For our brand, we offer unique patterns and colours to stand out from our competitors,” said Belinda.
“The Indonesian market can be very demanding. First, you need good marketing and captivating visuals so users will click on your listing. You need to be very quick regarding service because you need good ratings. You need to constantly invent products because other businesses will copy them once you launch a new product. You need to offer low prices with product quality beyond their expectations because nowadays, many businesses can offer good-quality products with just IDR 70,000 ($4.34),” said Juliana.
