Why are Gojek, Bukalapak, and Tokopedia gunning for digital gold?

Jakarta-based journalist Nabila Marsya takes 500,000 Indonesian rupiah (US$34) from her salary every month to invest in gold, she tells Tech in Asia. What’s uncanny about the gold that the 28-year-old owns is that she’ll probably never see or touch it. That’s because it’s being managed by local ecommerce giant Bukalapak, which launched its digital gold-buying feature, BukaEmas, in September 2019.

By offering a nearly negligible entry point – investments on BukaEmas start from 100 rupiah (US$0.0068) – Bukalapak is trying to woo casual investors exactly like Marsya. The company also makes investing in the precious metal almost as fuss free as ordering a snack from its main app.

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“With BukaEmas, we hope that people from various walks of life can have fair access to transact gold at a very affordable amount,” says Intan Wibisono, head of corporate communications at Bukalapak.

The company’s Mitra Tabungan Emas service – an expansion of BukaEmas – even allows people to start gold investment from the closest warung (small traditional stalls) from as low as 10,000 rupiah, he says.

In comparison, buying gold offline requires a minimum investment of around 500,000 rupiah (US$34.19) in exchange for a 0.5g gold bar – the tiniest size available on the market. However, few dealers offer this size, meaning minimum prices for offline investments are often even higher.

Apart from the high cost of initial investment, buying and keeping physical gold has also gone out of style for many reasons, such as the risk of keeping the precious metal without a safe deposit box. Storing large amounts of bullion can also incur hefty storage fees.

Optimists believe Indonesia could be on the verge of an e-gold rush, despite the country’s gold consumption lagging significantly behind China and India.

“Indonesia’s demand per capita is still at 0.2g per annum, which provides opportunity for growth,” says digital microsavings startup Treasury.id, which recently added gold to its list of financial products.

Indeed, Tech in Asia estimates that the size of Indonesia’s potential available gold market could amount to some US$12.6 billion – over three times of what it was worth in 2019 – when benchmarked against China’s more mature market. Bukalapak tells Tech in Asia that it foresees gold-based digital investment to contribute “at least 10% to 20%” of the total gold trade volume in Indonesia.

As most digital gold can be bought with a tap on a mobile app, any single one of Indonesia’s 82 million mobile phone users could become a potential investor.

This massive growth isn’t a given though, as there may be cultural or structural reasons preventing Indonesians from investing in more gold. Overcoming such barriers won’t be easy, but a way forward could be to bundle gold into a basket of investment products. The precious metal, like other assets, is just one of many means to attain financial freedom after all.

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