Collaborative Project of the Executive Talk "Digital Economy: an Unending Improvement"

Jakarta, 28 April 2016

Collaborative Project of the Executive Talk

Jakarta, April 28th 2016. Many people believe that e-Commerce will be the next big thing in Indonesia. In the last ten years, the number of mobile-gadget users, especially smartphone, has scored an unprecedented growth. Today, many activities are supported by smartphone such as online transportation, online shopping, cleaning and beauty services, and food delivery. The so-called “modernization” that changes the way people live is not only supported by telecommunication sector, but also banking, logistics, and the Government’s policy environment.

Indonesia is not the only country that is aiming to leverage the potential of e-Commerce. On another hand, with its strong fundamental of services in e-Commerce, Australia is seeking for opportunities in sharing its best practices and expanding the business. For this reason, through the facilitation of Austrade and New South Wales International Trade & Investment, ISD hosts the Executive Talk “Digital Economy: an Unending Improvement”. Different views from Australian e-Commerce practitioners are presented and discussed as ISD features various speakers that represent Indonesia’s e-Commerce sector.

Representatives of Australian e-Commerce sector are principals of leading industry such as eWise, airservice, and the University of Technology Sydney while YessBoss Group, the Ministry of Trade RI, the Ministry of Finance RI, and former policy maker mark Indonesia’s presence in the Executive Talk.

“In Indonesia, 80 million people have access to e-Commerce via their smartphone. The growth is unbelieveable; it is four times larger than the growth in Australia. Likely or unlikely, the growth is supported by the popularity of online transportation such as Gojek and Grab,” underlined Shannon Leahy, Trade Commissioner, Australian Trade Commission, in his opening remarks.

“The positive things about e-Commerce in Indonesia are rapid growth and huge market. Compared to ten years ago, the growth of e-Commerce sector has been doubled ever since. Indonesia is also a very potential market with around 4.5 civil servants, 50 million students, three million teachers, and 60 million households with internet access,” said Professor Kalamullah Ramli, Former ‎Director General of Post and Informatics Implementation, Ministry of Communication and Information Technology RI, in presentation session.

According to Professor Kalamullah Ramli, aside of great potential, Indonesia has unfinished homework to accelerate the development of its broadband infrastructure because fixed broadband penetration is only 1.1% while the mobile one has reached 22.2%. Moreover, 1,300% growth of internet users from 2002 to 2012 is not followed by the rapid growth in the Human Development Index.

“Consistency in the implementation of e-Commerce Roadmap, balance distribution of ICT infrastructure, investing on human development, and improvement on the National Logistic System (Sislognas) would be concrete things to,” added Professor Kalamullah Ramli.

Regarding regulation in Indonesia’s e-Commerce sector, Enzelin Sariah from the Ministry of Trade RI emphasizes that consumers’ protection such as reliable electronic signature and transaction evidence is the main goal of the regulation. Besides, regulation in e-Commerce should also provide an equal “playing field” for merchant, marketplace, and logistic services.

From business perspective, Dominic Bressan, CEO airservice, says that e-Commerce companies must build their own branding in order to win the competition. Effective data analysis and integration with other services are very important to get a deeper touch with the market. Kaspar Situmorang, Head of Sales and Partnerships YesBoss Group, completely agrees with Dominic Bressan.

“Tailored solution is needed as the answer of various demands of the customers. With deep analysis and personalization of each customer, YessBoss Group is committed to be a leading player that provides fast access and behavior-based approach with a very easy way: instant messaging,” said Kaspar Situmorang.

Last but not least, Subagio Effendi from the Ministry of Finance RI gives recent updates about Tax Policy in Indonesia’s e-Commerce sector.

“Talking about tax policy in e-Commerce, let’s start with Base Erosion and Profit Shifting (BEPS) Project. On BEPS Action Plan published in July 2013, there are three main pillars. They are the coherence of corporate tax at international level, a re-alignment of taxation and substance, and transparency that coupled with certainty and predictability,” explained Subagio Effendi in his presentation.