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E-commerce continues to be hurt by Indonesia's pandemic restrictions

E-COMMERCE platforms continue to take a hit from the social restrictions imposed by Indonesia because of the Covid-19 pandemic, reports the Jakarta Post

14 July 2020 - 19:00

E-COMMERCE platforms continue to take a hit from the social restrictions imposed by Indonesia because of the Covid-19 pandemic, reports the Jakarta Post.

The enforcement has hit a variety of cities and doesn't have a clear future of an endpoint, making e-commerce and logistic firms worried about their delivery systems.



'The problem is there are different types of restrictions in each area, which confuse our third-party logistics partners. Thus, communication with our customers is critical when the situation is very unpredictable,' said Tokopedia vice president Rudy Dalimunthe.



Mr Dalimunthe said Tokopedia has received a 40 per cent increase in complaints since the start of the pandemic in January. Since the pandemic has greatly hindered shipping deliveries, the two are clearly correlated.



The pandemic has also caused most consumers to shop online, forcing a more significant burden on companies like Tokopedia. Indonesia's e-commerce sector is expected to see a 50 per cent growth valued at US$35 billion.



Each regional, city, and provincial administration in Indonesia have different levels of restrictions that are colour-coded in green, yellow, orange, and red.



'Jakarta's policy is different from Central Java. Local governments are implementing restrictions in certain areas that cause disruptions to delivery services,' said Mr Dalimunthe.



Other than the confusion over local restrictions, consumers are shipping perishable goods, which are susceptible to delays.



'We have seen a seismic change in consumer behaviour in our same-day intercity logistics service. The food category has jumped 45 percentage points since March and is still rising,' said Paxel co-founder Zaldy Masita.



At the same time, major airlines have to ground airlines, which is terrible for Paxel since they rely heavily on air cargo. Indonesia's domestic and international air freight volume dropped 39 per cent below the monthly average in March due to aircraft grounding.



'Roadblocks and air cargo disruptions have affected our deliveries, and we have seen a three-fold jump in queries and complaints between March and May,' said Mr Masita.



Although the complaints are an adverse concern, both Paxel and Tokopedia feel fortunate over the increase in customers.



'I think we could expect more demand for intercity same-day shipping services, with more second-tier cities as destinations. We are also still looking at more food product deliveries,' said Mr Masita.


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