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Drivers of and barriers to e-commerce adoption in Indonesia: Individuals’ perspectives and the implications

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  • Ariansyah, Kasmad
  • Sirait, Emyana Ruth Eritha
  • Nugroho, Badar Agung
  • Suryanegara, Muhammad

Abstract

This study aims to investigate the underlying factors affecting Indonesian individuals' decision to make online purchases. Primary data were collected through a nationwide survey in 2019 covering all 34 Indonesian provinces. Secondary data regarding Indonesian villages' potential (PODES) are utilized to provide information about the availability of infrastructure at the village level. The standard utility/net gain maximization framework is adopted, and a binary logistic regression model is employed. A total of 8854 useable samples are analyzed. The results suggest that the probability of using e-commerce to make online purchases increases if an individual is male, young, married, highly educated, and an entrepreneur, as well as has access to the Internet, can easily find logistic and financial services, has sufficient digital skills, and has not been exposed to harmful content. These results produce several findings: the relative advantages of e-commerce over traditional commerce and the compatibility of e-commerce with individuals' needs and values can drive its adoption; digital skills and the ubiquitous related infrastructures are an essential requirements to expand e-commerce diffusion; exposure to harmful content is empirically discovered to be a barrier to e-commerce adoption. These findings lead the authors to provide recommendations to promote more inclusive e-commerce adoption and optimize the e-commerce sector's contribution to the national economy.

Suggested Citation

  • Ariansyah, Kasmad & Sirait, Emyana Ruth Eritha & Nugroho, Badar Agung & Suryanegara, Muhammad, 2021. "Drivers of and barriers to e-commerce adoption in Indonesia: Individuals’ perspectives and the implications," Telecommunications Policy, Elsevier, vol. 45(8).
    • Handle: RePEc:eee:telpol:v:45:y:2021:i:8:s0308596121001233
    DOI: 10.1016/j.telpol.2021.102219
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    References listed on IDEAS

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    2. Wu, Fan & Cui, Fengxiang & Liu, Tao, 2023. "The influence of digital inclusive finance on household wealth: A study based on CHFS data," Finance Research Letters, Elsevier, vol. 58(PC).

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