Indonesia’s interest in gold soars high on the digital platform

The number of gold buyers skyrocketed, driven by the ease of buying gold in small sizes.

Indonesian e-commerce marketplaces including Ant Financial-backed Bukalapak, and Tokopedia are trying to ride on the increasing demand and price of gold in the country as the former launches new feature for its users to buy the precious metal.

E-commerce major Bukalapak on Wednesday announced its users can buy gold from its platform on installments using the new feature Cicil Emas–a result of the collaboration with Indonesia’s fintech company Pluang–which offers gold transaction through its mobile platform.

“Gold is one of the oldest and popular investment in Indonesia. The demand is always there every year, and gold price is spiking up since a year,” Dhinda Arisyiya, head of investment solution at Bukalapak, told local media.

Driven by the market fear on the incoming trade war between United States and China, gold prices have been soaring up since early this year in Indonesia. It has further escalated the precious metal’s demand as Indonesians are considering it to be the most promising and safe asset to have.

The attraction towards gold is also reflected from the increase in transaction of gold on several Indonesian e-commerce firms and digital platforms this year.

Teddy Oetomo, chief strategy officer at e-commerce major Bukalapak says the gold buyers on its platform has jumped by nine times during the same period.

According to Dhinda Arisyiya, head of investment solution at Bukalapak, the company has experienced a spike in gold buyers reaching 2.5 million until July 2019, from 600,000 buyers last year. Although, the number of gold buyers has increased, the value of transaction is still small since people buy gold  in small amount.

Prita Hapsari Ghozie, a financial planner of Zap Finance says the reason gold is always in demand among the people of Indonesia, because the investment is very easy. The majority of people still buy gold through traditional methods. However, shifting lifestyle among younger generation, and increase in investment awareness for gold, has resulted in millennials starting to buy gold on digital platforms even though the value of their purchases is not too large.

For Nabila Marsya, a 26-year-old Jakarta-based writer, buying gold from digital platforms has become her monthly routine to ensure she is investing in a safe and stable asset. “I routinely invest IDR 200,000 (USD 14) in Bukalapak every month as I am afraid to buy gold in conventional way, because I’m scared of losing it. I have been buying gold on Bukalapak since 2017,” Marsya said.

Alibaba-backed e-commerce firm Tokopedia which partnered with Indonesia’ state own pawnshop Pegadaian is selling gold since January this year. Samuel Sentana, assistant vice president at Tokopedia, told KrASIA, the demand to buy gold is very high in Indonesia and cuts across the demography.

“Since it was launched in January 2019, the gold buyers on Tokopedia has increased by more than 12 times,” Sentana said.

Meanwhile, Teguh Wahyono, a director of Pegadaian said the gold sales through its own digital channel as well as through its partnership with Tokopedia in total, has increased by 50% year on year (YoY), and the total users have increased by 66%.