Where is Indonesian e-commerce headed?

Vaibhavee Sinha
Indonesia's e-commerce space is looking good, this entrepreneur says
Indonesia's e-commerce space is looking good, this entrepreneur says

With a population of over 250 million and rapidly growing internet adoption, the Indonesian archipelago could offer a booming market for online shopping — and current projections say it will reach $130 billion by 2020.

"The great thing is that there are a lot of investments… There are choices for consumers that love innovative solutions that are coming out from Indonesia itself," William Gondokusumo, the CEO of and director of told CNBC's "Squawk Box" on Tuesday.

Recently, the Indonesian government altered regulations to allow more foreign investment in the sector. Indonesia's investment service agency only recently allowed 100-percent foreign ownership for investments above 100 billion Indonesian rupiah ($7.53 million) for the establishment of an e-commerce company in the country.

However, even with "big boys" such as Alibaba and coming in — and Amazon soon following with a reported $600 million investment — Gondokusumo predicted that domestic e-commerce firms won't be pushed out as they are "more community focused."

The slowing Indonesian retail growth numbers of February, and indications that price pressure will continue over the next few months do not affect Gondokusumo's bullish view on the retail and e-commerce in the country.

"The way we see it," he said. "All retail and media companies will eventually become [their] own social network."

On the contrary, Ken Dean Lawadinata, former CEO and chairman of Kaskus Networks, who invested alongside Gondokusumo in Tororo, held a less optimistic attitude.

"At the moment, I have a more bearish attitude towards the IT industry, where I believe most investors and owners are pushing their company to a quick sell or short term mentality. This is not sustainable and bad for the industry itself," he told CNBC in an email.