Andy Zain kicks off Startup Asia Jakarta 2014 with keynote on the state of tech in Indonesia

Serial entrepreneur and managing director of venture capital firm Mountain SEA Ventures Andy Zain kicked off our Startup Asia Jakarta 2014 conference at Plaza Bapindo with a keynote speech on that state of technology in Indonesia. Zain is well-known in Southeast Asia as the executive director of social entertainment site mig.me and director of the Jakarta Founder Institute.

Do you want to pet the tiger?

Zain compares the Indonesian market to a ferocious tiger. He cited Tokopedia’s US$100 million funding round which came from SoftBank and Sequoia Capital, and congratulated founder William Tanuwijaya on the receiving the largest investment on record in Indonesian history. Then, he jumped straight into market analysis.

Zain highlighted that Indonesia has 80 million internet users and 55 million people will soon join the nation’s consuming middle class. In developed markets like the US, 20 percent of retail is done online. In Indonesia, less than one percent of retail is done online, according to Zain. This represents a huge opportunity for those in the fintech and ecommerce spaces.

Zain also spoke about Indonesia’s growth constraints, including slow internet connectivity, inefficient logistics, human capital bottlenecks, and difficulties with epayments. Indonesia also struggles with structural root issues like its reliance on paper-based systems, lack of physical infrastructure, antiquated regulations, low consumer trust, and poor consumer protection.

But the winds of change are blowing

Several changes in the recent past are transforming the archipelago into a more tech friendly environment. For example, the new ICT Ministry is showing an increased openness towards new innovations. Another important element is the growing number of eservices in Indonesia, including eVoting, eTax, and epayments suited for the local market.

Zain emphasizes the importance of fintech developments as “the structural pillars that enable scalable innovation.” He praised the Indonesian government for initiating its “Supercard” program where one million low income Indonesian families now SHARE cash aid of US$20 million distributed via their mobile SIM cards (update: corrected that figure). He then went on to highlight that Indonesia is now seeing more full-service branchless banking platforms and microfinance policies.

According to Zain, in Indonesia, there are great problems to solve – and therefore, great potential couples with some very daunting challenges. He points out that only 40 percent the archipelago’s population currently has a bank account, where as 60 percent are still unbanked. Zain turns to the audience and asks, “So, do you want to pet the tiger?”

This is part of the coverage of Startup Asia Jakarta 2014, our event running on November 26 and 27. Follow along on Twitter with the #startupasia hashtag.