Indonesia’s digital economy forecast to reach $119 billion this year as e-commerce drives growth despite subdued consumer spending

【JAKARTA, Indonesia—Aulia Maulida Hamdani, correspondent】Indonesia’s digital economy is forecast to reach $119 billion this year. Despite slowing economic growth and subdued consumer sentiment, digital consumption—led by e-commerce—continues to grow as the so-called “lipstick effect” combines with the convenience of online shopping.
According to local media on the 12th, the gross merchandise value (GMV) of Indonesia’s digital economy is expected to increase by 16% this year to $119 billion (about 159 trillion won), according to the “e-Conomy SEA 2026” report jointly published by Google, Temasek and Bain & Company. The digital economy’s GMV grew from $89 billion (about 119 trillion won) in 2024 to $102 billion (about 136 trillion won) in 2025.
E-commerce accounts for the largest share. Its GMV is forecast to rise 16% this year to $85 billion (about 114 trillion won), up from $73 billion (about 98 trillion won) the previous year. That would represent growth of about 37% in just two years compared with $62 billion (about 83 trillion won) in 2024.
Veronika Utami, Google Indonesia’s head, said at an event in Jakarta on the 11th to present the report that the digital economy is expected to continue growing at an average annual rate of around 16%. She forecast that its size could reach $200 billion to $360 billion (about 267 trillion to 482 trillion won) by 2030.
The “lipstick effect”—where consumers continue buying products that offer small comforts even when economic conditions are difficult—is cited as one reason online consumption persists. “The lipstick effect comes into play when people seek products that make them feel better, even temporarily, during difficult times,” Veronika said. “Consumers are willing to spend to enjoy small comforts.”
The convenience of online shopping platforms is also supporting consumer spending. Consumers can shop regardless of time or place and easily compare prices and product specifications from multiple sellers.
“Consumer trust in platforms is growing, and seller quality is also improving,” said Willy Chang, a partner at Bain & Company. “More transparent pricing information and the ease of comparing prices are also contributing to increased consumption.”
Online media is also growing rapidly alongside e-commerce. Its GMV is expected to increase 28% this year to $12 billion (about 16 trillion won), up from $9 billion (about 12 trillion won) the previous year. Video commerce—selling products through digital advertising and video content—was cited as a key growth driver. The sector’s GMV is forecast to reach $19 billion to $30 billion (about 25 trillion to 40 trillion won) by 2030.
Mobility (including ride-hailing), food delivery and online travel are each expected to record GMV of about $11 billion (about 15 trillion won).
In digital finance, online lending services grew 22% from the previous year. Veronika said Indonesia has 17 highly profitable digital banks in Southeast Asia, and that they are gaining a competitive edge by connecting with the digital ecosystem.
In particular, banks connected to digital platforms such as super apps can gain insights into customers’ spending habits and purchasing power from records of their use of food delivery and online transportation services. Such information can be used to assess loan applicants’ ability to repay and manage credit risk.
The report also forecast continued long-term growth for Indonesia’s digital economy. Total digital economy GMV is expected to reach $446 billion (about 597 trillion won) by 2035, with e-commerce accounting for the largest share at $362 billion (about 485 trillion won).
Veronika emphasized that infrastructure and investment capacity will be key as the digital economy’s growth expands toward an AI-powered economy.
[email protected] Aulia Maulida Hamdani, correspondent Reporter