1. FMCG, Fashion and BPC dominate the unorganised sales channels. These categories are expected to hold majority share of retail in the future as well

  • Indonesia’s retail market bounced back in 2021 as Covid-induced challenges began to fade. FMCG dominates this sector with ~60% contribution. Electronics, Fashion, and BPC account for about a quarter of the retail market. The unorganized FMCG market has millions of many small mom-and-pop stores
  • Given the unorganized market structure, the eB2B business models witnessed encouraging growth, coming off a low base in the country. On a relative basis, Indonesia’s eB2B penetration is ahead of Vietnam but lags behind India. Directionally, we expect the rise of eB2B to move the retail market towards a more organized structure over time

Channel split of retail consumption, 2021


2. Less than half of the retailer base has been penetrated currently. In addition, the active user base is low and only a small part of their wallet is via eB2B…

Despite the recent growth of eB2B sector, the overall adoption and usage levels remain low. On a relative basis, the adoption levels are much lower in ex-Java regions as compared to Java.

FMCG retailer penetration


3. eB2B retail has seen strong growth and share of FMCG has increased in 2020. Current low penetration level creates potential for 10x growth between 2020-2025E…

We expect a significant increase in eB2B ATV and transactions to drive a 3x rise in penetration levels between 2020-25. Overall, the eB2B market size is estimated to increase by 10x during this period.

eB2B reseller market by category, 2019-2025

4. Partnerships rising to connect a larger part of value chain. Access to capital not an issue for those delivering growth…

  • In recent times, the eB2B players have partnered with other stakeholders in the ecosystem. These partnerships allow them to service a longer part of the value chain and lift customer engagement/retention
  • Meantime, continued capital raises in the sector suggest investors’ appetite to participate in the structural growth opportunity in this sector

5. Some important considerations for FMCG-focused eB2B players

We identified five dynamic variables that eB2B players should tweak from time to time as they work towards profitably scaling up their business. These changes can help them to achieve their growth and profitability targets.