Press Releases

IndoTekno Podcast: State of E-Commerce Logistics in Indonesia & Moving Forward From COVID-19

Our CEO Arne Jeroschewski was invited to be a guest on IndoTekno’s inaugural podcast episode to share his insights on Indonesia’s e-commerce logistics landscape, delivery trends and moving forward from the COVID-19 pandemic. 

Listen to the podcast here. We’ve also included an English transcript of the conversation below.

In this podcast, listen to Arne discuss the following topics: 

00:19: Introduction

04:26: Delivery trends in Indonesia  

07:24: E-Commerce logistics challenges faced in Indonesia

08:57: Observations on cross-border logistics

11:26: Logistics innovations in the Indonesian market 

13:45: E-commerce innovations in the Indonesian market 

16:46: Impact of COVID-19 on Indonesia’s e-commerce logistics market

21:58 What could we expect moving forward?

Listen to the podcast on BuzzSprout and Spotify



Greetings, everyone, and a warm welcome to our very first installment of IndoTekno. IndoTekno is a roughly 30 minute bi-weekly podcast in which we invite a guest in to discuss all matters Indonesian technology related. The podcast will be hosted in English with a subsequent transcript made available in Bahasa Indonesia. My name is Alan Hellawell. I’m the host of IndoTekno. I’m also the founder of Gizmo Advisors and serve as a venture partner at Alpha JWC Ventures.

We’ve launched the IndoTekno podcast for four simple reasons. First, we’re very eager to help raise the profile of Indonesia’s talented, promising and fast growing technology ecosystem. Second, we specifically want to add a new rigorously analytical voice to the growing conversation around Indonesia’s technology scene. Third, we hope to profile as early as possible emerging business models that could grow into the next multibillion dollar opportunity. Finally, and most importantly, we at IndoTekno hope to make the masterful insights of Indonesia’s leading tech innovators accessible to everyone.

The masterful insights of Indonesia’s leading tech innovators. We’ve chosen as our first topic of discussion, the largest part of the Indonesian Internet economy, e-commerce and the mission critical enabler to its growth, logistics. The Google Temasek Southeast Asia Internet Economy report estimated that the region’s e-commerce market hit thirty eight billion dollars in gross merchandise value, or GMB in 2019. Significantly higher than online travel at thirty four billion dollars and multiples of GMB from the sharing economy at 13 billion U.S. dollars.

Indonesia e-commerce GMB alone likely topped 21 billion U.S. dollars last year, suggesting that it is over half of Southeast Asia’s e-commerce business. As one data point, Goldman Sachs estimates that Shopee, the region’s largest e-commerce platform, saw near doubling in GMB in Indonesia last year. McKinsey, meanwhile, expects the online commerce market to grow up to sixty five billion dollars by 2022. The Indonesia Logistics Association, meanwhile, estimates that the country’s broader logistics market likely only grew between 10 to 15 percent last year.

However, the number of e-commerce logistics businesses has almost doubled. Few people are as well qualified to comment on trends in Indonesian e-commerce and logistics as today’s guest. Arne Jeroschewski is the founder and CEO of Parcel Perform. Prior to founding the company in July 2016, Arne spent seven years as a consultant with McKinsey in their Berlin and Singapore offices before assuming leadership roles at regional fashion e-commerce platform Zalora. in addition to SingPost and DHL. Arne, thank you for joining us today.


Thank you very much for having me today, Alan. 


Arne, can you give us a brief description of Parcel Perform and the services you offer? 


Sure, Parcel Perform is a leading carrier-independent parcel tracking platform that operates globally. With over 600 carriers integrated, we help businesses, most importantly e-commerce merchants, to improve their post-purchase customer experience. We reduced customer service cost and optimize their logistics management. So we provide branded tracking pages, intuitive parcel overviews for merchants to manage their shipments, and we build custom logistics performance reports. With this, we won multiple international brands to work with our platform, including Nespresso, Decathlon. Mecca Brands, SalesStock. It’s a wide variety of partners we work with. And therefore we have a huge dataset to work with when it comes to e-commerce logistics. 

Delivery Trends in Indonesia


I referenced Indonesia e-commerce growth in my earlier remarks. WeAreSocial and Hootsuite moreover estimate that over 90 percent of Indonesia’s 152 million Internet users have shopped online before. Roughly five percent of Indonesia’s retail economy is now online. A crucial component of the continued growth in e-commerce relates to the logistics experience, including average delivery time. Can you share with us what trends you have seen in delivery time in Indonesia? 


If we look at what consumers are saying: we see that more than one third of the consumers in Indonesia still express dissatisfaction with the experience they are getting for e-commerce. This was done in a study we did as Parcel Perform together with iPrice Group. Nevertheless, what we are seeing over the last year is the experience consumers are getting is improving constantly over the year. 

When I said two years ago, we were still seeing that deliveries on average took about more than three days. I think this number has come down to a little over two days nowadays. This is a tremendous improvement and will technically also help consumers to be more satisfied with their experience and induce them to shop more. But this is of course, helped by the fact that that large majority of the e-commerce shipments are still going through the biggest cities where shorter transit times are a little bit easier to do.

We see that more than 40 percent of the shipments actually go to Jakarta and the bigger Jakarta area. But nevertheless, we’re seeing that even across the country, transit times are getting lower and lower and therefore e-commerce becomes a very relevant means of shopping for consumers in Indonesia.  


Very encouraging to hear. And at the same time, sounds as though there is still measurable progress to be made. In fact, how did these absolute values and trends in Indonesia compare with other markets in the region? 


To be fair, Indonesia starts with a rather challenging geographical setting. There are many islands, many with no major commercial airport, a challenging road infrastructure. And, of course, a lower willingness to pay for advanced logistics services. Nevertheless, you see that Indonesia is taking a middle spot in the ranking when it comes to transit times and e-commerce logistics.KPIs. 

Therefore, you can see despite the challenging environment. Indonesia is doing a very good job in building this infrastructure. If you look at the latest World Bank statistics that you can see that Indonesia jumped 20 points to rank number 46 when it comes to logistics infrastructure, which is an enormous improvement. And you can see that many more consumers in Indonesia will have access to high-performing e-commerce, logistics infrastructure very soon.

E-commerce Logistics Challenges Faced in Indonesia


Very interesting, Arne. What are some of the other unique challenges that e-commerce logistics faces in Indonesia relative to other markets?


If you look at the logistics market in general, you can say that Indonesia has one of the highest relative logistics costs in the world. But 25 to 30 percent of the GDP in Indonesia go to logistics expenditures. In other countries. It’s only five percent and sometimes even less. So this kind of results in longer holding times for freight parcels, not so reliable processes, longer transit time. And, of course, more time spent on the roads transporting goods from A to B.


Nevertheless, what we can see is that in the bigger cities, the logistics experience in Indonesia is not any worse than other big cities across Southeast Asia. Therefore, we can see that Indonesia is on a good path to get to the same level of other countries. 


The one big difference that we still see is that a lot of the deliveries in e-commerce logistics are still door-to-door deliveries. There, Indonesia is lagging behind other markets where the likes of collection points and parcel lockers are a lot more prevalent at the moment already. Nevertheless, you see a lot of carriers even here in Indonesia investing in this infrastructure, which will eventually also add to the customer experience that Indonesian consumers will get in the future.

Observations on Cross-Border Logistics


Again, encouraging to hear, Arne. Any observations about cross-border logistics that you can share with us? How, for instance, have average delivery times trended for cross-border e-commerce since the beginning of a pandemic?


Well, to answer this question, the most important is, first of all, to understand how the pandemic is impacting logistics processes overall, because logistics itself is relying on processes; their repeatability and reliability. The pandemic  resulted in tremendous shockwaves upsetting the logistics machine around the world. A lot of flights and line halls were canceled or rescheduled. Borders were closed. There’s increased checkpoints, customs throughout the process.


I think the key is also that there were high levels of staff sickness within the logistics companies. Not just people just getting infected. But people are staying home even with minor illnesses. Or, they just wanted to be preventive and not expose themselves to the virus. With that, there was a huge upsetting in the logistics setup across the world and therefore also in Indonesia. So this resulted in increased transit times for a lot of parcels, mostly on the international level.


The worst ones that got affected were the international postal delivery routes, where deliveries sometimes got delayed by weeks. Some countries have customs clearance delays of two to three weeks that they had to fight. Only now getting close to getting rid of that backlog. This probably affected international deliveries into Indonesia to a similar extent. But I think what we are seeing is that those delivery times are going back to where they were prior to the crisis over the last few weeks.


But to note: one thing that we also realized, players who had their own infrastructure. For example, their own airlines or trucks, have navigated the crisis relatively well with transit times being only minimally affected, even through the worst parts of the crisis towards the end of March, beginning of April.

Logistics Innovations in the Indonesian Market


Thank you Arne. Let’s pivot for a second and come back to the challenges of the pandemic shortly. There seems to be a steady drumbeat of new logistics business models being introduced in Indonesia. What transformative models have you seen arrive in the market over the past year or two?


Logistics is following similar rules across the world. Therefore, a lot of the innovations we see here are probably also visible in other markets. What we have seen recently in Indonesia are models like same-day delivery options that get introduced and offer additional service dimensions for users. 

Examples for those are that Gojek, Lalamove, or companies like Paxel in the market. Another dimension where innovation is happening is on the underlying infrastructure level, where for trucks or warehouses, where existing infrastructure is thought to be better used by established marketplaces for underused capacity. When it comes to road freight, there is, for example, cargo with warehouses there’s for example, Waresix. This gives everyone a better opportunity to optimize logistics setups and save costs along the way. 

Another point which I mentioned earlier is lockers and delivery points or collection points for e-commerce logistics. We have seen across the world that consumers appreciate those delivery options because not everyone is at home or wants to deal with every delivery individually.

These options are introduced by a lot of players now across the market. Although Indonesia is still in its infancy, we expect that to be an upward trend. And there are a lot of parcel carriers that are seizing the opportunity right now. You see that the e-commerce volume is growing tremendously and everyone seeks to kind of profit from the opportunity. So you see a lot of players entering the market, extending their networks. And for any industry of tiny entry barriers and such a tremendous growth, you will see a lot more players entering this space in the future.

E-commerce Innovations in the Indonesian Market


That’s fascinating, Arne. Can you offer any interesting color as to how the logistics experience is developing for the online merchant?


Sure. And overall I think when we look at the logistics experience, we usually look at it from three dimensions, speed, cost and the experience itself. If you look at speed, we already talked about the transit times that parcels take to get to the consumers. We already see that almost most of the parcels are being delivered in the bigger cities and reach end customers the next day. This is a brilliant achievement because when I started looking at e-commerce in Indonesia in 2012, this was for sure not the case.

Over the next few years, we expect those delivery times to get faster and faster again because the players are investing in scheduled line hauls, higher capacity sorting centers, better route planning and everything it takes to make the logistics processes more seamless for the customer. 

Cost advantages come into play because the volume is growing and the players are operating at a higher scale. They can let their customers, namely the merchants, enjoy these cost advantages.

You see that more and more merchants offer free delivery across the board to all consumers and therefore the consumers enjoy this and are even more compelled to make more orders online. Last, from the experience point of view, it’s looking at what the consumer is receiving as the service. 

A key element there is visibility and tracking. Customers want to know where the parcels are, what’s happening to them, when can they be expected at their doorstep. They want to get to the level where they can also influence the journey along the way. So that means they can reschedule or redirect and interact with the carriers to make sure that the delivery fits into their lifestyle. And they don’t have to fit the lifestyle to the delivery. Last, coming back to the collection points, this offers an additional dimension for consumers so they can pick up the parcel in their own time.

So if you look at markets like Singapore, we have over 35 percent of the deliveries going to the collection points. Which makes the delivery process even more cost effective and adds another level of convenience for the consumer. 

From that perspective, I think those are the trends that we will more likely see in Indonesia over the next few years to intensify, delivering a better logistics experience.

Impact of COVID-19 on Indonesia’s E-Commerce Logistics Market


The Indonesian Logistics Association reported that logistics volume has been down 60 to 70 percent across the board since early March due to the emergency measures taken by the government to prevent COVID-19 transmissions. Arne, sorry, but I have to return to the key question. What has the pandemic done to the state of Indonesia’s e-commerce logistics market?


Well, the delightful news is that e-commerce logistics was not as hit hard as the average logistics company because B2B businesses were more severely affected. February and March have been hard for most of the players for the effects of the pandemic. What we have seen is that across the world in our customer portfolio, we’ve seen the volume in February lagging about 20 percent last year. And in March, about 10 percent to indicate that even the e-commerce industry, who’s believed to be enjoying kind of the effects of the pandemic, was hit hard.

This is usually explained by a few of the complexities that e-commerce was exposed to during the pandemic. The first one is that a lot of e-commerce companies or e-commerce sellers also operate offline businesses. Offline businesses were hit very hard and therefore their online businesses weren’t able to fully compensate the losses the companies made in the offline world. Therefore, they had a lot of challenges to deal with like layoffs, etc.

The second very important element is that there’s a kind of inventory mismatch. That means what we bought before the pandemic is not what we buy during the pandemic. A lot of companies had different categories in their inventory than the ones high in demand after the virus. 

The last two elements are around logistics setup and logistics productivity. With a lot of infections coming into the logistical warehouses and operations,  productivity has gone down tremendously. And a lot of the logistics processes don’t support social distancing measures that were required during this time.

Even though you could expect that e-commerce logistics would enjoy this, February & March has been a tough time for the industry. But what we are seeing now is that in April, things are turning around across the world and in Indonesia. E-commerce players now have figured out how to handle these situations. They have extra supplies for products high in demand right now. 

We see that from April onwards, e-commerce will be on an incredible growth spurt, enjoying the shift in consumer behavior that is induced by the pandemic. 


A question about competition, Arne. Looking at China’s logistics earlier this year. The pandemic seems to have catalyzed some massive competitive shifts amongst its largest 3PLs. S.F. Express February’s revenue rose over 77 percent year on year, and business volume was up 119 percent year on year. Meanwhile, YTO revenue in February fell 35.7 percent, Yunda was down 13.4 percent and Shantung declined thirty seven point three percent.

Are you seeing any similar structural shifts in Indonesia during this period, either amongst players or modes of operation?


I wouldn’t expect that. If you look at China, the virus impact was very regionally concentrated around Wuhan and Hubei. And if you look at the logistics industry in China, the players that you mentioned have very specific geographical exposures. All of them service nationwide, their respective market share in the parts of the country are differing vastly. You could see that the virus had a very differential impact on the players; showing in the numbers that you just presented.

If we’re looking at Indonesia and most other countries, the impact of the virus is more widespread. We also don’t see these kinds of regional pockets where certain players are strong or weak. So I don’t expect any major shifts in the competitive dynamics. 

Also, because most of the merchants are keeping the carrier mix constant these days. We have seen none big changes in the way carriers are used across our customer base. So, I would say the competitive dynamics won’t be much.

What Could We Expect Moving Forward?


More broadly speaking, how do you see the ecosystem recovering going forward? 


So first of all, I wouldn’t call it a recovery, because recovery to some extent, implies it goes back to where it was. I think this pandemic will create a new normal that is much talked about these days. 

Most of the logistics players are already setting themselves up to be successful in this new normal and seize the opportunity. One of the things is that most of the merchants are putting all their efforts now on growth and developing new markets, being able to service as many of the orders as they can at the moment.

Supply chains are now set up to really handle the volumes. People are able to operate with social distancing, which will likely be around for a longer time. They’d set up distinct shifts in warehouses, they made sure that their sorting process works differently. So there are a lot of changes happening. And I think I would say the consumers are getting used to the new normal. So they’re doing things online, they’re ordering things online they wouldn’t have thought of doing before the crisis.

It’s very hard to assume that they forget about this after the crisis and go back to the patterns they had before. That’s why I think what we will likely see is an unprecedented growth for e-commerce. There’s hardly any imagination that we will go back to where we were. That’s where I think we are very optimistic that starting from Q2, e-commerce will be a very interesting industry to look at for all players. From investors or consumers or anyone who is looking at seizing the opportunities from this.


Excellent. What advice might you give to a merchant who seeks to go online in Indonesia? 


You better hurry. Indonesian e-commerce has grown tremendously. I remember when we started in 2012, the market was highly supply constrained. If you are the first guy to sell a black t-shirt online, you literally could pick up most of the market. Times have changed since. You can almost buy everything online, maybe, except for some international luxury items, there’s literally everything available. 

If you’re a merchant and you don’t have a unique product, I think you will see a market environment which is already competitive. That doesn’t mean that there aren’t opportunities because the market is still growing double percentages year over year. I would say you should kind of make sure you enter the market soon and seize the opportunity, because Indonesia, as you mentioned earlier, is the biggest market in Southeast Asia and has tremendous opportunities to grow..


A point well taken. Arne, do you view basic digital literacy amongst merchants as a bottleneck to further expansion in Indonesian e-commerce?


This goes back to the points I just made earlier. We are moving away from a supply constrained e-commerce market where there are very few items available online and every additional item coming online will further enhance the market. There are so many products available online across multiple marketplaces. And from that perspective, we believe that literacy of the actual merchants may not be such a factor that’s holding back e-commerce in Indonesia. We believe that this is a more consumer-driven exercise. 

The more consumers get used to the fact that they can buy things online, they change their lifestyles to do more, spend more time online, buy more things online. That will be the biggest driver behind the growth of e-commerce in Indonesia. 

That goes back to the fact that we have this new normal people are now forced over a few weeks and months now to live in this world where e-commerce is the vital way to get products into their house, we can imagine that they won’t go back from this.

One has to still also see that the experience that we talked about is probably not as developed yet as we might see in other markets, like, let’s say, Europe or North America. So there will be a lot of opportunities for new players in the e-commerce space to offer an even better experience and therefore grab market share. But that’s again, the opportunity to convince the consumer that there are better options out there and bring a better experience to them in the long run.


Fascinating insights. Well, this concludes our maiden podcast of IndoTekno. Thanks so much for joining us today, Arne. We hope you, the listener, have enjoyed the episode. We welcome any constructive criticism, ideas for speakers, topics you feel that the world needs to know about and all other feedback on the show. My email is Please visit our website at That is T, E, K, N,O,

If you would like to be put on our mailing list for new episodes, if you’ve enjoyed the podcast overall, we would also deeply appreciate any feedback you can furnish on Apple Podcasts.