Entrepreneurs grinding it out in Jakarta are unlikely to tell you Indonesia is an easy market to win. On the surface, the world’s largest archipelago is attractive to foreign founders. And why not? Indonesia has a lot of problems to be solved, with greenfield opportunities that tend to encompass several links on a given value chain. This wide open nature of the market alone makes it a conducive environment for building full-stack ventures. On top of that, the population is big. So the saying goes, if you can win Indonesia, you may not need to expand regionally.
Tech firms can grow fast in Indonesia, with a young population embracing the web faster than ever before. Fun fact: each year, Indonesia pops out more babies than the entire population of Singapore. Singaporean startups salivate when thinking about an Indonesian market entrance as it’s undeniably the largest and most important market in Southeast Asia – the final frontier in terms of regional defensibility, some say.
Indonesia is the next hotspot for investor activity after China, the US, and India. This is due to an economy that’s consumption-driven and a tech market that’s still relatively immature. There are a lot of reasons to take your startup to Indonesia. But alas, Indonesia is as elusive as it is attractive; a mirage for some. While there are many reasons to come here, there’s really only one reason to stay: the opportunity to challenge yourself.
Local investors and founders are likely to agree – if you can crack Jakarta, you can crack any market. In reality, it’s only for those with true grit.
In no particular order, here are ten things foreign founders should chew on before stocking up on batik shirts and parachuting into Indonesia.
Tough geography
Indonesia is made up of more than 17,000 islands. This means things like logistics and internet penetration rates are major hurdles for any web business.
Things are changing, however, and startups are quick to adapt. With Indonesia’s three major telcos getting more aggressive with 4G coverage and many locals coming online for the first time on mobile devices, consumers have a healthy thirst to get plugged in – no matter how far they are from the capital or Java island.
But the situation is still far from perfect. Getting Indonesians online in rural areas is just the first step toward converting them into paying customers. Looking specifically at the ecommerce space, operating in a nation that’s divided by water is a challenge in and of itself when considering timely and reliable delivery.
Juicy demographics
Indonesia has a population of more than 250 million. Over 50 percent of people are under the age of 30, making them statistically ripe in terms of understanding and adopting new tech. Additionally, Indonesia’s economy is pillared by people buying stuff. An emerging middle-class has been the focus of many ecommerce firms, both foreign and domestic. Current hot verticals include automotive, real estate, fashion, lifestyle, financial, and on-demand services.
Weak payments infrastructure
Two banks run the show
Bureaucracy you wouldn’t wish on your worst enemy
What language do you speak?
Social media is a way of life
Indonesians love their malls
Regulation is wild
The taxi is your office
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