Edy, please introduce yourself…
I am 37 and born in Jakarta, Indonesia. My background was information system and was a hard-core programmer (and gamer).
I am the founder of PT Dewaweb – offering cloud hosting service to the Indonesian market. I have a small in-house team of 6 people and a 24/7 support team in the US to manage our servers and support our customers via help desk, live chat and phone.
What business opportunities to do you see emerging in Indonesia right now?
There are many opportunities actually in Indonesia, because we’re kinda late in adopting the latest innovations and the consumers have strong buying power to things coming from the overseas. From food, electronics, mobiles, social media to advanced IT technology – as long as they’re famous outside, they will sell well here.
Some interesting examples:
Indonesia is #1 or #2 largest Facebook and Twitter users. It was Friendster and Myspace, then Facebook. The mobile usage here is extremely high and Indonesian people like to sms or text message. We like to communicate among friends and hang out. That’s why Facebook and Twitter are booming.
Indonesia is the #1 market for Blackberry cellphones, has enjoyed maybe the last 4 years of huge success, thanks to its Blackberry Messenger. It completely wiped out Nokia market.
However they’re making the same mistake like Nokia, selling too many models too fast, too late innovations, and worse than Nokia, their cellphone batteries dry out so fast, thanks to its huge amount of software installed.
Many people have started to migrate to iPhone and Android phones now and switched to Whatsapp, Line and WeChat messengers.
3. Food & Beverage
Indonesia is also the biggest market for F&B business. Since I enjoy eating out with my family and friends, there are many new restaurants opened in malls and other locations, from famous restaurant chains in US, Hong Kong, China. From the fine dining, fast food, deserts and drinks, they’re always crowded.
Some of the popular brands are Din Tai Fung, Crystal Jade, Chatime, Shareatea, etc. Not just franchises, but also some strong local players emerging like Ismaya Group – www.ismaya.com – they are probably the fastest growing restaurant chain in Indonesia now.
F&B is a very competitive market here but if you know what you’re doing, you can reap great success here.
Indonesia is also a hugely potential market for insurance business. I read an article somewhere that we have the lowest penetration rate (I think less than 30%) of insurance among other countries, even though we are the top 5 largest population in the world (220 millions).
More and more insurance companies are expanding their services and getting more aggressive here.
The stock market here is also extremely under valued. I myself invest a lot in the stock market here thru mutual funds and unit-linked insurance products. Don’t try to do stock picking here, unless you know what you’re doing and have a lot of friends in the industry.
There are many dirty and tricky companies in the stock market here. It’s better to play safe and invest in the stock market via mutual funds, and choose the largest fund house (Schroders Indonesia). You should not go wrong with them because here, the biggest players always have the edge.
Last but not least, in the e-commerce industry, it’s also started to enter a new phase of growth and I predict within 2 years, e-commerce will reach the booming phase. Hence I’ve started to enter the e-commerce market here this year by providing cloud hosting and other services.
What are the challenges involved with doing business in Indonesia?
Many great opportunities are in Indonesia, but many foreign companies also failed because they didn’t do their homework to build close relationships and study our cultures and unique market challenges here.
Some of the challenges here are:
* High corruptions and bribes increasing business cost
* Bad infrastructures causing high logistic costs
* Most people from the lower end market prefer cheap price over quality (that’s why all made-in-China stuff is very popular here 🙂
* The market is really unique here (what works in other countries may not apply here)