EV-DCI 2025: Indonesia’s digital economy doubles amid global uncertainty

Amidst global economic uncertainties, Indonesia’s digital ecosystem demonstrates remarkable resilience and growth, as highlighted by the East Ventures – Digital Competitiveness Index (EV-DCI) 2025 report.

This annual report, a collaboration between East Ventures and Katadata Insight Center (KIC), expresses continued optimism towards Indonesia’s digital transformation, supported by increased online transaction numbers and the latest cutting-edge technological adoption, including AI (artificial intelligence).

Released in May 2025, the report cites data from Tracxn and reveals a 75% drop in investment towards Indonesia’s tech startups—plunging to US$323 million in 2024 from US$1.3 billion from the previous year. This decline is attributed to the global economic uncertainty, leading investors to be more selective in their investment allocation.

Nevertheless, Indonesia’s digital economy doubled down from the previous years. Among multiple factors, sustainable technological adoption and soaring online transaction numbers are the two main driver of this growth.

Findings from the latest e-Conomy SEA stated that Indonesia’s digital sector GMV (Gross Merchandise Value) is projected to reach US$90 billion by 2024, a 13% increase from the previous year. Meanwhile, the GMV growth rate in 2023 reached 6% on an annual basis.

E-commerce remains undisputed, this sector is by far the biggest contributor to Indonesia’s digital economy, with US$65 billion projected in 2024, growing from US$58 billion in 2022 and US$59 billion in 2023.

According to the same report, this trend shows that digital economy is Indonesia’s best bet to further catapult national economic growth.

Meanwhile, digital economy only makes up 4-5% of the nation’s GDP (Gross Domestic Product). Thus, the government has set an ambitious goal to quadruple it into 20% by 2045 and thereby positioning it as Indonesia’s economic backbone.

The IMF (International Monetary Fund) also estimated that the US-China trade war will further prolong these uncertainties and increase financial pressure in the market—though an economic recession is not underway, yet.

Reciprocal tariffs, on the other hand, poses a risk to financial stability—as highlighted by Bank Mandiri’s OCE (Office of Chief Economist). These tariffs could constrict the US dollar supply, potentially triggering foreign capital flight from domestic equity and debt markets, and thereby further pinning down rupiah’s value.

An inclusive digital transformation

Digital economy is not always about how growth is accelerated through the involvement of tech, but it is also about how society of multiple tiers can all benefit from its impact.

The EV-DCI 2025 report lists down four main obstacles in an inclusive digital transformation roadmap. For example, the rapid advancement of innovation that currently outpaces the establishment of a sustainable legal framework.

First, insufficient regulations that are also not up to par with the latest technological innovations. For example, Indonesia has yet to officially issue cybersecurity and AI governance laws. The implementation of Law Number 27 of 2022 on Personal Data Protection has not seen better days, as the its implementing regulations (peraturan turunan) have not been made official as well.

Second, accessibility and quality of internet connectivity in various regions of Indonesia remain unequal. The collaboration between private sector and local communities in building better connectivity infrastructure, such as electricity, internet networks (5G connection), and data center, are imperative.

Third, the supply-demand mismatch for local digital talents. The Ministry of Communication and Digital Affairs the Republic of Indonesia revealed that while demand projection for digital talents reached nine million by 2030, Indonesia could only debut seven million.

The government must align a standardized curriculum and competency in education, provide digital training and mentorships in different regions, provide information portals and professional networks, and streamline digitization services.

Last but not least, limited access to funding for digital economy players—especially MSMEs (Micro, Small, and Medium Entreprises). The report urged several approaches to further strengthening this potent sector, including digital competency training, AI-based marketing, incentive provision, and data-based MSME funding platform development.

“The realization of a truly equitable digital transformation demands for a synergistic collaboration. This partnership must involve the government, as the policymakers; the private sector, as the driver of innovation; and the active participation of academic institutions, community organizations, and civil society,” the report says.

Essentially, the EV-DCI 2025 report recommends three strategic steps to realize an inclusive digital transformation:

1. Optimizing National Priority Programs with the latest technology,
2. Strengthening the digital ecosystem through regulation, infrastructure, and talent,
3. Ensuring equity in the digital economy.

Robust AI ecosystem

Through its robust portfolio ecosystem, East Ventures also plays a significant role in solidifying the region’s financial and digital inclusion.

For example, Mekari helps MSME players and informal employees by offering accounting and HR (human resource) solutions. On the other hand, Xendit provides access to digital payment for merchants residing in non-tier-1 cities.

Not only towards the society, East Ventures portfolio companies have also fostered collaborations with the government. Komunal, for instance, is partnering with local rural banks to digitize credit scoring processes and improve operational efficiency of local financial institutions.

McEasy is also fostering active partnerships in digitizing regional and transport system administration processes. One of them is collaborating with Dishub (Department of Transportation) to hold socializations on technological implementation.

East Ventures’ portfolio companies are at the forefront of of leveraging AI to address and capitalize on massive, evolving digital trends. waresix, a prominent logistics startup, employes AI to optimize fleet management and enhance delivery precision. 

Meanwhile, Xendit utilizes AI to strengthen its fraud detection capabilities and automate customer service operations. Additionally, investment platform Stockbit also integrates AI in to drive development of its product offerings and service enhancements.

East Ventures’ portfolio companies demonstrate the industry’s readiness to meet efficiency demands and provide data-driven services, aligning with the rapid advancement of national digital transformation through their strategic adoption of AI.

To further solidify its commitment, East Ventures also recently launched IndoBuild AI, a dynamic platform for AI innovators to learn, build, and showcase their AI-driven solutions to real-world challenges in Indonesia across key sectors such as healthcare, education, government and more.

IndoBuild AI kicked off its program through a workshop featuring mentors from key tech players in the region, including AWS, Alibaba Cloud dan Google, in March 2025. The program then revealed two winners after selecting from a pool of finalists during the Demo Day, Lentera.ai and LeaseSync. The two teams also received benefits from Alibaba Cloud and AWS, which are the partners of IndoBuild AI.

Indonesia’s AI usage is projected to contribute 12% to the nation’s GDP, or equal to US$366 billion by 2030.

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