Challenges and Opportunities of Indonesia’s Social Commerce Industry

The Faculty of Economics and Business (FEB) at Universitas Islam Internasional Indonesia (UIII) organized a highly anticipated event on Tuesday, April 4, 2023, where distinguished speaker Mr. Noudhy Valdryno, Head of Public Policy to Indonesia and Brunei at META, talked about the social commerce Industry.

The event was part of the EconInsight and BizTalk program held by UIII’s FEB faculty to generate insights from the practitioners' perspective. Specific to this event, Mr. Valdryno addressed the challenges and opportunities of the growing social commerce industry in Indonesia, as the largest economy in Southeast Asia.

During the event, Mr. Valdryno highlighted that trust issue from the public appeared to be a crucial problem facing the industry, especially when it comes to online transactions. In this regard, many Indonesian consumers are still hesitant to shop online due to concerns over security and trustworthiness.

“This trust issue can be attributed to the fact that many online businesses in the past have not been transparent and have not fulfilled their promises, leading to skepticism among consumers,” Mr. Valdryno explained.

While trust issue is one thing, digital divide is another thing. Given social commerce industry heavily relies on online connectivity, Mr. Valdryno views the limited access to internet connectivity in certain parts of Indonesia as also hurdling the industry.

In this case, addressing these issues would require a collaborative effort from both government and private organizations to improve infrastructure and establish trust between businesses and consumers, he argued.

Delving into the impact of social commerce on traditional brick-and-mortar retail businesses in Indonesia, Mr. Valdryno emphasized that social commerce is not displacing them. Instead, traditional retailers are finding ways to coexist with social commerce by leveraging technology and integrating online and offline channels.

“Many brick-and-mortar retailers have started offering online ordering and delivery services, which have proven to be popular among consumers,” said Mr. Valdryno, highlighting that the key to success for traditional retailers in the age of social commerce is to adapt and innovate.

In addition, Mr. Valdryno also discussed about the untapped opportunities in the social commerce industry in Indonesia, citing the potential for businesses to capitalize on the rise of mobile commerce and the increasing popularity of social media platforms. Before the session with Mr. Valdryno, the series of EconInsight and BizTalk have invited a number of industry practitioners addressing a range of topics, including the logistics and transportation industry and Indonesia’s renewable energy industry.

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