Consumers now consider the total price rather than just the cost of the item. Sellers are also being challenged to recalculate their strategies amidst rising platform service fees.
JAKARTA — Traditionally, demand elasticity analysis in economics has focused on changes in product prices. However, amid the rapid development of e-commerce, another factor has become increasingly critical in shaping consumer decisions: shipping costs.
A study on consumer behavior in the Shopee marketplace indicates that shipping costs help determine how sensitive consumer demand is to changes in the total expenses they must incur.
In online shopping, consumers no longer weigh only the price of the item. Purchasing decisions are also influenced by the total cost to be paid, which is the product price plus various additional fees, including shipping.
Consequently, the price listed on a product is essentially just one part of the consumer's total expenditure.
Total Price as the Benchmark
A consumer interviewed for this study admitted to always calculating the product price along with the shipping cost before finalizing a payment. According to them, excessively high shipping fees can make consumers reconsider, while free shipping promotions can encourage unplanned purchases.
If the shipping cost is deemed too high relative to the price of the item, consumers may even choose to cancel the transaction.
This pattern aligns with research by Rasyad (2023), which found that shipping costs influence purchasing decisions.
In e-commerce transactions in general, additional costs beyond the product price are also a factor that drives consumers to abandon their shopping carts. The global cart abandonment rate is recorded at around 70 percent based on Baymard Institute data cited by eMarketer.
Shipping cost strategies also shape different consumer responses. Research by Yang et al. (2005) shows that free shipping policies can increase both the number of purchases and the frequency of consumer visits to a platform.
Meanwhile, Barker and Brau (2020) explain that separating shipping costs from product prices can influence consumer expectations regarding the quality of logistics services.
Many Stores, Easy for Consumers to Switch
The influence of shipping costs on demand is also related to the abundance of seller options in the marketplace. The same or similar products are usually offered by various stores, allowing consumers to easily compare product prices and shipping costs before making a choice.
When one store offers a higher total cost, consumers have the opportunity to switch to another store offering more competitive prices or shipping rates.
This condition makes demand for an individual seller more elastic. Small changes in the total purchase cost can influence a consumer's decision to proceed with the purchase or switch to another seller.
This competition occurs amidst the massive scale of e-commerce activity in Indonesia. Bank Indonesia recorded approximately 1.44 billion e-commerce transactions in the third quarter of 2025, with a value reaching Rp134.67 trillion. The number of transactions increased by approximately 20.5 percent year-on-year.
With a wide array of product and store choices, the habit of comparing total payments is becoming increasingly common among consumers.
Nevertheless, shipping costs are not the only factor determining purchasing decisions. Some consumers remain willing to buy products with higher shipping costs if they perceive the product to have greater quality, uniqueness, or utility.
A study by Haryani et al. (2023) on Shopee users also shows that free shipping programs, especially when combined with flash salediscounts, do not always have a positive impact on purchasing decisions.
These findings demonstrate that consumer behavior cannot be explained by a single factor.
Seller Margins Increasingly Pressured
For business owners, shipping and various service fees are part of the sales cost structure, which can ultimately affect profit margins.
One seller interviewed for this study admitted to experiencing a decline in demand when the total cost to be paid by the buyer increased, even though the price of the product sold remained unchanged.
This condition forces sellers to more frequently recalculate operational costs and determine appropriate pricing strategies.
Cost pressures became more pronounced in 2026. Starting May 2, 2026, Shopee increased the service fee for its free shipping program from 6 percent to 8 percent, with a maximum cap of Rp40,000 for standard-sized items.
Meanwhile, for special-sized items, the service fee was set at 9.5 percent with a maximum cap of Rp60,000. TikTok Shop and Tokopedia also began implementing logistics service fees starting May 1, 2026.
The Indonesian E-commerce Association (idEA) stated in May 2026 that these fee adjustments were related to rising operational costs, including fuel and distribution, as well as reduced subsidies from platforms.
Some sellers have responded to these changes by optimizing operations, adjusting selling prices, or absorbing some of the additional costs to keep the prices offered to consumers competitive.
The additional costs charged to sellers are not always directly visible on the consumer's checkout page. However, the impact can manifest through product price adjustments or promotional strategies.
To maintain sales volume, business owners can implement several strategies, including:
Comparing rates from several courier companies and choosing the most efficient service.
Using lightweight and appropriately sized packaging so that costs based on weight or volume do not inflate.
Negotiating shipping rates with logistics companies if shipping volumes are sufficiently high.
Setting a minimum purchase threshold to qualify for free shipping, for example, Rp50,000, to increase transaction value.
Conventional Elasticity Models Need Expansion
This phenomenon opens space for academics to expand the use of demand elasticity models in interpreting digital consumer behavior.
Analyses that only place product price as the primary variable need to consider shipping costs and various other additional fees because the characteristics of online trade differ from conventional transactions.
Research by Dewi (2025) on Shopee users also shows that shipping costs are a distinct consideration for consumers before making a purchase.
However, research results regarding the influence of shipping costs on consumer decisions are not entirely uniform.
Fakhrana and Voutama (2025), for instance, did not find a significant influence of shipping costs on purchasing decisions. Differences in research results indicate that the influence of shipping costs can vary depending on the type of product, transaction value, consumer characteristics, and the destination region of the shipment.
Differences in logistics conditions between shipments within Java and inter-island shipments can also result in different levels of consumer sensitivity.
Cost Transparency and Logistics Equity
In terms of policy, cost transparency is one of the important aspects to consider in the development of e-commerce.
The sources in this study encourage platforms to provide clear information regarding the total costs that consumers must pay from the beginning of the transaction process. This way, consumers can know the actual price they must pay without being surprised by additional fees at the payment stage.
Equitable logistics infrastructure is also an important part of reducing shipping costs. The construction of warehouses, distribution centers, and logistics networks outside of Java can help shorten delivery distances while increasing the efficiency of goods distribution.
Furthermore, free shipping programs need to have transparent mechanisms so that the cost burden is not entirely shifted to business owners, especially micro, small, and medium enterprises.
idEA assesses that changes in platform cost structures are part of the development of an e-commerce industry that is increasingly mature and requires transparency between platforms, sellers, consumers, and logistics service providers.
As e-commerce continues to grow in Indonesia, shipping costs can no longer be viewed merely as an additional cost after the price of the item.
For consumers, shipping is part of the total price that determines whether a product is still considered worth buying. For sellers, shipping and platform service fees are critical components in determining prices, profit margins, and competitiveness.
Therefore, understanding the relationship between product prices, shipping costs, and demand elasticity is becoming increasingly relevant in interpreting consumer behavior in the digital trade era.
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