Kiki Verico, left, deputy director of the University of Indonesia's Institute for Economic and Social Research (LPEM), and Tokopedia chief executive William Tanuwijaya speak with Smitten by Pattern co-founder Laras Anggraini during a press conference in Jakarta on Thursday. (JG Photo/Diana Mariska)

Tokopedia to Add $12b to Indonesia's Economy in 2019

BY :DIANA MARISKA & FERIAWAN HIDAYAT

OCTOBER 12, 2019

Jakarta. E-commerce giant Tokopedia is on course to nearly triple its contribution to the Indonesian economy this year, creating hundreds of thousands of new jobs, lowering prices and promoting economic equality across the archipelago, according to a recent study.

The study carried out by the University of Indonesia's Institute for Economic and Social Research (LPEM) revealed that Tokopedia will add Rp 170 trillion ($12 billion) to Southeast Asia's largest economy in 2019, compared with last year's Rp 58 trillion. 

While most of the impact is felt in the provinces on the country's most populous island, Java, other regions also benefit greatly from Tokopedia's presence. North Sumatra saw its economy expand by an additional Rp 2.79 trillion last year, while East Kalimantan's economy enjoyed Rp 933 billion in additional output.

Tokopedia also created 857,000 new part-time and full-time jobs last year. More than a third of the new sellers, or 309,000, use Tokopedia as their main source of income. LPEM estimates that Tokopedia will create 1.14 million new jobs this year.

"One of our findings is that Tokopedia carries out an inclusiveness function. One example is the large number of housewives who became sellers in Indonesia," LPEM deputy director Kiki Verico, said at a press conference in Jakarta on Thursday.

The study found that Tokopedia contributed Rp 19 trillion to total household income last year, which is equivalent to an increase of Rp 441,000 for each Indonesian worker.

"According to our research, Tokopedia users state that Tokopedia makes prices 21 percent cheaper. Tokopedia also makes 79 percent of buyers more aware of digital investment products," Kiki said. 

William Tanuwijaya, chief executive and co-founder of Tokopedia, said the company seeks to expand locally to reach more local businesses, instead of expanding abroad. 

"For us, Makassar [in South Sulawesi] is more important than Manila [in the Philippines], Sukanagara [in West Java] is more important than Singapore. That said, Tokopedia, as an Indonesian technology company, will commit to becoming more relevant and beneficial for Indonesia," William said.

The LPEM study estimates the total nominal transaction, or gross merchandise value, at Tokopedia, will reach Rp 222 trillion this year, from last year's Rp 73 trillion. 

"We must evolve to reach other industries. We aim to work with fishermen and farmers, among others," Wiliam said.

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