JAKARTA, 19 September 2019 – SIRCLO is a homegrown e-commerce solutions company that helps businesses sell across multiple online channels, from their own e-commerce websites to marketplaces such as Tokopedia, Bukalapak, Shopee, and Lazada. Since its establishment in 2013, the company has secured more than Rp100 billion in investment to accelerate the growth of Indonesia’s e-commerce industry. Throughout 2018, SIRCLO facilitated more than Rp500 billion in online retail transactions. This year, the company is targeting twice that amount, with a goal of reaching Rp1 trillion.

At its sixth anniversary in 2019, SIRCLO reported facilitating more than US$4 million (approximately Rp56 billion) in online retail transactions each month. This figure was generated through its two flagship solutions, SIRCLO Store and SIRCLO Commerce. SIRCLO Store was designed to help local brands build online stores more easily, while SIRCLO Commerce supports both local and multinational brands with end-to-end sales operations across multiple marketplace channels.

Brian Marshal, Founder and CEO of SIRCLO, remained optimistic about the outlook for Indonesia’s e-commerce sector. “Based on both our internal data and external market indicators, growth in 2019 remains positive, with no signs of slowing down,” he explained. According to Brian, Indonesia’s overall e-commerce market had been growing at roughly twice its previous scale year on year. “Over the next few years, we expect the market to expand by as much as eight to ten times. From what we are seeing today, growth remains on track towards that level.”

Brian’s remarks are consistent with findings on Indonesia’s e-commerce growth in previous years. Online retail sales in the country were estimated to reach US$8.59 billion (approximately Rp117.7 trillion) in 2018. According to Statista, this figure was projected to rise to US$16.5 billion by 2022, nearly doubling over the period. With only 11.6% of Indonesia’s population represented in these figures, there remained considerable room for deeper market penetration and further growth.

However, despite its rapid and significant growth, e-commerce still represented a relatively small share of overall sales. In the FMCG sector, for example, online channels accounted  for only 1.6% of total sales, compared with 18% in South Korea and 16% in China. According to Brian, there are two important takeaways from these figures. “First, although the share remains small, it should not be underestimated, as the impact of e-commerce goes beyond revenue alone. Today, having an online presence can directly influence offline sales. Second, fluctuations in the macroeconomic environment have yet to have a direct impact on e-commerce growth, largely because its overall share remains relatively small. For now, developments in the capital market may have a greater influence on how e-commerce players continue to grow,” Brian explained.

Beyond the pace of Indonesia’s e-commerce growth, Brian highlighted several challenges that business owners and brands need to consider as online sales continue to evolve. “The range of channels and business models available for selling has become increasingly diverse. In the past, consumer-to-consumer (C2C) models were the most common. Today, we are also seeing business-to-business, business-to-distributor, and even business-to-store and offline retailer models become more prevalent,” Brian explained. In his view, online and offline channels should not be seen as mutually exclusive. Just as many offline businesses are expanding into online marketplaces, digital-first players are also moving into physical channels. “The key is for business owners and brands to respond to this variety strategically. As an e-commerce enabler, our role is to support them through an integrated, one-stop technology solution.”

The second challenge lies in logistics and geography. Indonesia’s economic activity, particularly in online commerce, remains heavily concentrated in Java, especially Jakarta. “However, it would be a mistake to assume that markets outside Java are not ready. In many cases, growth is constrained by high delivery costs. Finding ways to reduce these costs will be key to enabling broader and more balanced e-commerce growth across Indonesia,” Brian explained.

The third challenge lies in the ability to make effective use of technology. According to Brian, market growth data in offline channels can be difficult to obtain directly and often requires support from research firms. “The online environment is different, as various types of market and consumer behaviour data can be accessed in real time, with every interaction captured digitally,” Brian explained. He added that business owners need the right technology to process and analyse this information in order to strengthen engagement with their target markets. “That is one of our key roles as an enabler in supporting brands and business owners.”

To address these challenges, Brian believes that business owners and brands should remain open to competition from international players. “Many still tend to be sceptical of players and support coming from outside the country. In reality, strong market growth is often driven by collaboration and healthy competition across borders,” said Brian.

Brian also shared his views on several e-commerce issues that had sparked significant discussion in Indonesia, including tax regulations and the entry of several prominent players into the country’s e-commerce industry. “Looking at the fundamental purpose of taxation, we see it as a way for companies that have grown through the support of their consumers to give back to society,” Brian explained. “However, the policies introduced should not constrain an industry that is still developing. Regulation and oversight are necessary from the outset, but tax policies should also take the industry’s stage and pace of growth into consideration.”

Finally, responding to concerns about slowing growth among several industry players, Brian noted that this is a natural part of a rapidly developing market. “Rapid industry growth also brings greater competition. Even when the market is expanding healthily, not every player will succeed. This should not be seen as a sign that Indonesia’s e-commerce sector is losing momentum. Instead, it creates an opportunity for all stakeholders to learn, adapt, and improve,” Brian explained.

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About SIRCLO

Founded in 2013, SIRCLO is a technology company that provides solutions to help brands and business owners sell online. SIRCLO offers two products: SIRCLO Store and SIRCLO Commerce. SIRCLO Store is a Software-as-a-Service (SaaS) platform that enables small and medium-sized local businesses to build their own online stores. To date, it has supported nearly 1,000 active paying users in building their brands and expanding their businesses online, including ATS The Label, Benscrub, Namaste Organic, and This Is April.

SIRCLO Commerce is a channel management solution designed to help enterprise brands expand into online distribution channels. Powered by technology that synchronises sales across multiple marketplaces, SIRCLO Commerce is trusted by leading brands including Reckitt Benckiser, KAO, Arnott’s, Kellogg’s, L'Oréal, PepsiCo, and Minimal. For more information about SIRCLO, visit www.sirclo.com.