MatahariMall doesn’t really have $500 million

There has been a lot of hubbub flying around Jakarta about Indonesia’s latest e-commerce company launched by local family-owned firm Lippo Group. The most alarming rumor I’ve heard is that the conglomerate didn’t actually earmark $500 million for the project, but instead that number is just a ploy to attract media attention and make a splash in the capital. Whether or not MatahariMall can actually spend $500 million, or achieve $1 billion in revenue within 12 months, is highly debateable.

However, some people have told me that Lippo Group was in fact running around town trying to offer salary raises to people like Magnus Ekbom of Lazada Indonesia. The result was that Rocket Internet execs called up Lippo Group representative John Riady and cussed him out vehemently, saying that “the power and wrath of Rocket Internet will be unleashed upon Lippo Group”; or something along those lines with fire and brimstone. Maybe it’s true, maybe it’s not. But this brings up an interesting question:

How far will Indonesia’s big families let a foreign-owned company get on their home turf?

I’ve been noticing an increased level of nationalism from Indonesian startups too, especially in the e-commerce space. Lippo launching MatahariMall could seem a bit like the puppeteers of the nation finally saying: “Thanks for clearing the runway Max Bittner. Grownups will take it from here.”

While Rocket Internet is just about the furthest thing from a child as it gets in terms of company building, it’d be interesting to know who their local partner is in Indonesia. Additionally, how can it can operate a business-to-consumer model legally in spite of the fact that foreign ecommerce companies can’t hold inventory within Indonesia’s borders?

If Rocket Internet owns the majority of Lazada Indonesia (I was told that they actually don’t), how will it manage to become the market champion without the government (cough, cough, big families) suddenly changing the rules of the game?

What do you guys think?