In a sign that North American e-commerce markets may be hitting a ceiling, Indonesian e-commerce and cashback giant Tokopedia has received a new $350 million round of financing from Google and Singapore government investment fund Temasek.

The Jakarta headquartered online marketplace was originally backed by SoftBank Group and has also received funding since from Alibaba in December 2018, part of a $1.1 billion investment as well as $500 million from Temasek earlier in June 2020.

Impressive market growth and performance

Since launching in 2009, the popular Indonesian marketplace has grown to more than 9.4 million merchants, 100 million active monthly users, and an estimated 2019 sales of more than $15.1 billion. In a report it commissioned, Tokopedia estimates that its marketplace alone makes up more than 1% of the entire Indonesian economy.

Indonesia’s e-commerce market is expected to grow from $21 billion in 2019 to more than $82 billion by 2025, according to a recent study by Google, Temasek, and Bain & Co.

Tokopedia has played a key role in the fast pace of growth in technology, e-commerce, and logistics in the country and now has more than 4,700 employees. It says that 86.5% of the merchants on its platform are new entrepreneurs and more than 6.4 million people have started and developed their businesses on its marketplace. Now more than 350 million products are listed with transparent pricing and more than 500,000 payments points across Indonesia.

The company has also contributed substantially to the logistics challenges of serving an archipelago of more than 17,000 islands. It claims to reach 98% of the entire country with deliveries and 25% of its customers can receive next-day delivery service.

In May 2020, Tokopedia experienced a severe data breach where personal data for more than 91 million shoppers was stolen by hackers and offered for sale on the Dark Web. The company claims its customer passwords and credit card numbers were secure but hackers reported attempts to crack user passwords and the company encouraged users to change their passwords as a further security measure.

Despite its success, co-founder and CEO William Tanuwijaya has expressed no desire to expand outside of Indonesia into Southeast Asia. In the short-term, there is still plenty of e-commerce growth remaining in the Indonesian economy.

Cashback plays an important role

The 2020 Global Cashback Industry Report estimates cashback promotions generate an average 3.4 times increase in sales conversion and a +46% increase in average order value (AOV). Further research shows nearly 20% of consumers said they made a purchase or increased the value of a purchase because of a cashback offer.

Cashback incentives have played a key role in Tokopedia’s growth, encouraging return visits and high traffic, building loyalty, and providing online shoppers with further incentives to buy on its platform.

In recent years, while it has scaled back the total number of its cashback offers, the cashback and voucher incentives still contribute to visits by more than 100 million active users every month.

The future is bright for e-commerce and cashback companies around the world but particularly in fast-developing, mobile-centric, and fast-growing economies in Southeast Asia, South America, and India.

You can learn more about the global cashback industry, the latest research, performance indexes, industry leader profiles, and more here.