Indonesia is starting to steal the limelight away from traditional Asian tech superstars like India and China.
According to the Jakarta Globe, the country’s US$813 billion economy expanded by 6.5 percent last year and has been getting more attention with talks of its large market size, growing middle class and early adoption of technology.
Like every market, Indonesia has its own distinct quirks and issues that entrepreneurs need to pay attention to when starting a business there.
Here are five key trends that every startup founder should look out for based on the talks and interactions at the recent Startup Asia Jakarta.
1. Indonesians are still slow to adopt e-commerce.
While Indonesians are some of the fastest adopters of social media and other key elements of the information age, one area in which they noticeably lag behind is online shopping.
Indonesians prefer cash transactions over credit cards, a big barrier to creating an e-commerce payment ecosystem.
The country has a population of 240 million people but only 15 million of them have credit cards. With just 6.25 percent of the population with access to more developed e-payment systems, founders need to think about how to integrate e-payment gateways into their e-commerce platforms.
Even more so, they need to understand that it is not just a problem with the tools available, but the fear of online frauds that deter online transactions.
Andrew Darwis, Co-founder and CTO of Indonesia’s largest online community Kaskus.com, said, ” When Indonesians do transactions online, they typically do bank transfers or opt for cash on delivery by meeting the sellers at malls or coffee shops. This is still a primitive way of doing transactions online, which is why Kaskus had to develop it’s own e-payment system, KasPay.”
If all goes well, KasPay might just become Indonesia’s answer to a viable third-party online payment solution, like how AliPay is for the China. Andrew mentioned that they are working together with the big banks like BCA and Mindiri to ensure tighter integration. These two are what consumers prefer to use when buying goods on Multiply.
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