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How Facebook is planning to dominate Indonesia's e-Commerce
2 min read

How Facebook is planning to dominate Indonesia's e-Commerce

Facebook's plan to take over the Indonesia e-commerce
How Facebook is planning to dominate Indonesia's e-Commerce

I haven't been posting for a while and there is a reason for that. I was spending all my free time to validate an idea in online payments space for the Southeast Asia market.

I decided to drop that idea and let me share with you why.

During my research, I've found about Facebook's plan to dominate Indonesia's eCommerce and payments. So let's start and have a deeper look at the biggest Southeast market.

Facebook apps have the widest outreach in Indonesia

According to the latest research by Hootsuite and we are social, 3 out of the top 4 most active social media platforms are owned by Facebook:

  • Whatsapp covers 83% of all online users in Indonesia;
  • Facebook covers 81%;
  • Instagram 80%.

Whatsapp groups and Instagram are already providing help for all e-commerce and social commerce entrepreneurs in Indonesia. However, the majority of the purchases are currently happening outside of the Facebook platform. Mark wants to change that.

e-Commerce is the new gold for Facebook

Indonesia is the sweetest spot for Facebook because of it's enormous double-digit growth.

Statista research

I am not surprised seeing the speed at which Facebook moves towards Indonesia. Let's have a look at the chronology of the events.

June 2019, Facebook announces Libra, it's own cryptocurrency to fuel the payments between unbanked.

October 2019, Marc Zuckerberg got questioned in Congress about Facebook's Libra and eventually drops the Libra plan.

Instead, one month later (November 2019) Facebook announces its payments platform - Facebook Pay.

May 2020, Mark announces Facebook Shops - a new e-commerce platform with an initial launch in the US and subsequent launches in the developing countries afterward.

June 2020, Facebook invests in the biggest Indonesian ride-hailing platform Go-Jek for its widespread payments platform. It's critical  for Facebook to find a local partner in Indonesia as the country's government requires 51% of local ownership from any company setting up payments inside the country.

So what's happening

Indonesian e-commerce and payments market is one of the fastest-growing in the world. Topped with a high density, 273m population, and the biggest SEA economy.

Facebook is rushing to roll-out Facebook Shops and Pay, to take advantage of its online reach and lock-in most of the e-commerce transactions inside its  platforms.

This information will be the most extensive consumer behaviour database in the developing countries and will fuel even higher accuracy for Facebook Ads. No-one else will be able to compete with it: neither banks, nor the government, nor any other private company.

I couldn't find an official confirmation, but I have a feeling that similar thing is going to happen with other developing countries.

Share with me your thoughts on this topic.


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