Four things you must know about Indonesia, the Wild West of tech entrepreneurship

Antonny Liem, CEO of Merah Putih Incubator.

The oft-repeated mantra at DEMO Asia 2012 is that the Singapore market is too tiny for local entrepreneurs who want to build a sustainable business. Right from the beginning, startups must think about how they want to go global. There’s even dispute that Singapore is a good test market, given it is only one of the few developed economies in the region.

Which is why many businesses look to Indonesia, a vast market south of Singapore that is seeing rapid growth in the Internet space. To get some insights on the Indonesian market, I spoke to Antonny Liem, CEO of Merah Putih Incubator, the first digital incubator in Indonesia that focuses on e-commerce, social media, gaming, and mobile startups.

Since its launch in the middle of 2010, the incubator has seen through eight companies which developed their ideas into viable products. This makes Antonny the perfect person to talk about the Indonesian market.

1) Indonesians are social.

Like really social. A Singaporean food entrepreneur once told me how surprised he was that the number of ‘likes’ on his Indonesian business’ Facebook Page exploded from zero to over 12,000 within a few months. And he just had his first outlet in Indonesia.

Antonny certainly isn’t surprised. According to a study by ad agency BBH Asia Pacific, Indonesians are among the most prolific Twitter, Foursquare and Facebook users in the world.

Gauging by user base alone, they would be number two, at  35 million users, representing a 30 percent growth in the last six months. And Indonesia has only 14 percent Internet penetration rate, which indicates massive room for growth.

“Indonesians are very communal. They like to follow trends. Everyone’s on the Blackberry there because they follow each other. They sign up for a Twitter account without even knowing how to use it,” said Antonny.

2) Mobile is king, but mobile commerce isn’t.

One explanation why Indonesians use Facebook so much despite low Internet penetration rates is because they have access to the social network through their mobile phones.

The same study mentioned that there are 30 million mobile Internet users in the country, just five million less than those who surf the web on their computers.

While a large percentage of Indonesian mobile users have sent airtime remittances via mobile or bought items via their network operators, Antonny thinks that the m-commerce scene is still weak.

Trust in e-commerce sites are still lacking, Indonesian online payment gateways have just started operating, and many e-commerce sites have put scant effort to enhance their mobile shopping experience, according to Daily Social.