Nearly six in 10 Indonesian consumers now mix digital and physical sales channels when shopping, placing growing pressure on retailers to connect physical stores with online platforms.
A 2024 survey by MarkPlus, Inc. Found that 58.74% of consumers combine online and physical shopping, with 31.50% researching products online before buying in stores and 27.24% examining products in stores before purchasing online.
“This phenomenon does not show that consumers are conflicted, but rather reflects a shopping pattern that is increasingly flexible and adaptive,” said Iqbal Shoffan Shofwan, director general of domestic trade at Indonesia’s Ministry of Trade.
Regulatory Overhaul Lowers Digital Entry Barriers
To keep pace with changing shopping routines, the Ministry of Trade updated national business classification rules to permit trading enterprises to run brick-and-mortar and digital outlets without securing separate e-commerce licences. Clarifications introduced earlier this year established direct operating guidelines for social commerce, open marketplaces, and direct-to-consumer websites, while rescinding old statutory clauses that confined conventional merchants strictly to physical shopfronts.
For national supermarket operators, department stores, and mall operators across Java and Bali, this legal shift removes administrative friction. Retailers can now convert physical stores into collection points and stockrooms for digital orders without facing regulatory penalties or holding multiple operational permits.
Independent operators and small vendors outside tier-one cities face a tougher operational reality. Higher shipping rates, erratic internet coverage, and mismatched stock registers across fragmented supply chains make channel integration costly for regional distributors.
Software Integration Over Built-From-Scratch Systems
Merchant technology adoption is splitting along capital lines. Big retail groups deploy transaction data to build bespoke automation systems, while neighbourhood vendors and independent outlets struggle with basic electronic inventory logs.
Rather than pushing small businesses to build private artificial intelligence infrastructure, trade officials recommend using built-in algorithmic forecasting tools already packaged inside commercial point-of-sale systems and established e-commerce seller dashboards. These tools allow merchants to predict stock depletion, trim dead inventory, and prevent out-of-stock items without software engineering overhead.
Supply chain integration between large conglomerates and informal traders is expanding the domestic wholesale reach. A government partnership in Jakarta and Manado linked 314 traditional kiosks into broader procurement systems, while an initiative with modern supermarket chains placed 96 regional goods from 20 provinces onto national retail shelves.
SME Revenue Gains Through National Chains
Data recorded in October 2025 by the Indonesian Retailers Association shows more than 694,000 small merchants supply national retail networks, generating roughly $1.5 billion (IDR27 trillion) in combined annual turnover. Ministry trade programmes are also preparing local suppliers for cross-border export standards, connecting vetted suppliers directly with international commercial buyers.
For retail investors and regional brands, Indonesia’s hybrid retail path confirms that physical floor space remains essential, provided stores function as experiential showrooms and order collection hubs rather than stand-alone points of sale. The immediate focus for merchant groups shifts to the next phase of the Ministry of Trade’s logistics integration plan, which tracks whether lower transport costs can extend hybrid retail networks into outer island markets before the close of 2026.
