Where are the big opportunities in Indonesia? Top VCs provide clues

Andy Zain (left) founding partner of Mountain Kejora and Andi Boediman (right) managing parter of Ideosource

Indonesia is fast becoming the sweetheart tech market of Southeast Asia. The opportunities in verticals like ecommerce, payments, and logistics have never been more prime than they are today in Jakarta. Earlier today, at Tech in Asia Jakarta 2015, three prominent local VCs took the stage. The panel discussion was about key opportunities and challenges that are in store for the tech startup ecosystem in Indonesia in the coming years.

Willson Cuaca, managing partner of East Ventures moderated the chat, while Andi Boediman, managing partner of Ideosource and Andy Zain, founding partner of Mountain Kejora sat down as panelists.

Cuaca kicked the session off by asking about the hottest sector in Indonesia: ecommerce. The question came directly after Boediman announced a US$22 million investment in local electronics ecommerce firm Bhinneka. Both Boediman and Zain believe ecommerce still has ample room to grow in Indonesia. Boediman says, “Bhinneka is already winning on the 3C [computers and IT, consumer electronics, and communications tech] category […] Ideosource doesn’t believe in sizes, but just believes in good companies.”

Zain says in certain developed markets, ecommerce falls anywhere between 10 and 20 percent of all retail, while ecommerce in Indonesia still accounts for less than two percent. “Also, the opportunity lay in things around ecommerce: payments, logistics, and more,” says Zain.

See: Indonesian ecommerce site Bhinneka packs up $22m from Ideosource, targets IPOBoediman believes there are four sectors in Indonesia that can soon become billion-dollar industries: online media, payments, ecommerce, and travel. He says Bhinneka will stay in the electronics category, as the main ecommerce battle has already been won by sites like Tokopedia and Bukalapak. However, he speculates that the mainstream ecommerce firms are spending nearly US$7 million a month on advertising channels like television. Cuaca, who’s an investor in Tokopedia, neither confirmed nor denied the statement.

It’s not a secret that more money is coming into the Indonesian market, largely in the forms of the nation’s family-owned conglomerates, as well as foreign investors. Cuaca asked if this is a good or bad thing. Zain says with this second wave of investors also comes a lot of people who make small investments but still want to run around Jakarta claiming to be seriously funding tech startups. He adds that entrepreneurs need to be wary of these people, and make sure that your investors bring more value to the table than just writing a check.

Boediman agrees. “Good entrepreneurs should expect something more than money from investors,” he says. “Founders need to do their research on anyone who offers to fund them.”

Cuaca ended the session by addressing the audience with an interesting tid bit of news that the Indonesian government recently eased restrictions on hiring foreign talent. According to him, the government has recognized that there is a shortage in the local talent pool. Tech in Asia will follow up on this.

Do you think ecommerce in Indonesia is overhyped? Why or why not? What needs to happen to create the healthiest ecommerce environment possible in emerging Southeast Asia?