This document discusses opportunities and challenges in Indonesia's digital space. It notes that Indonesia has experienced strong and stable economic growth, has a young and productive population, and a growing middle class. However, its digital market is fragmented with no clear leader yet. Key opportunities include Indonesia's close social connections, large young user base, focus on mobile, entrepreneurial culture, and strong cultural heritage. But trust and seamless payment options are still challenges, holding back more online transactions. To succeed digitally in Indonesia requires truly understanding the local market, needs, and what would encourage viral adoption, rather than just copying foreign models.

2. Agenda
Indonesia
–
the
country
The
digital
space
Challenges
faced
Top
8ps
to
win

3. Worried?

4. Not
me
:)

5. Remember
1998?
2014?
2001?
2009?

6. 2nd
fastest
growth
Source:
McKinsey,
The
Economist
Most
stable,
with
lowest
standard
devia8on

7. Young…
produc8ve…
Bonus
demography
this
decade
Source:
Indonesia
Economic
Master
Plan
(MP3EI)

8. Growing
middle-­‐affluent
popula8on
Source:
BCG

9. Indonesia
digital
space…
…possibly
the
most
aVrac8ve
in
the
world

10. 3rd
largest
…possibly
the
most
aVrac8ve
in
the
world
(2)
2nd
fastest
2nd
lowest

11. Could
this
be
the
next
big
thing?
“…e-­‐commerce
in
Indonesia
is
very
much
like
the
early
days
of
the
e-­‐commerce
boom
in
the
US
–
customers
are
not
sure
that
they
trust
online
payments,
the
logis8cs
infrastructure
is
not
yet
built
…
But
in
other
ways,
it
is
more
like
the
early
days
of
the
e-­‐commerce
boom
in
China
–
a
lively
entrepreneurial
base
of
sellers
is
clamouring
to
get
online,
users
are
placing
great
emphasis
on
social
recommenda8ons,
and
innova8ve
payment
systems
are
emerging
….
Over
the
next
few
years,
Indonesia
is
likely
to
create
its
own
unique
hybrid
version...”
Redwing
Asia

12. Fragmented
Nobody
could
claim
as
winner…
…
(Not
that
they
haven’t
tried)
…
yet
…

13. UNIQUE
1. Close
social
knit
2. Young
user
base
3. Mobile
first
4. Agile
–
entrepreneurial
5. Strong
cultural
heritage

14. Close
social
knit…
ChaVy…
TwiVy…
Jakarta
is
the
TwiVer
capital
of
the
world
Jakarta
is
#2
FB
city,
Indonesia
is
#4
FB
country
Indonesia
has
the
highest
Path
users
in
the
world

15. Young
user
base
~60%
internet
users
between
12-­‐34
yrs
old
Source:
APJII

16. Mobile
first
country
Already
more
SIM
cards
than
human
popula8on
Only
40%
adults
have
bank
account…
…yet
85%
have
mobile
phones
Mobile
browsing
intensity
is
highest
in
the
world
(661
pages
per
mth/person
–
>double
than
US/UK/China)
Source:
DeloiVe,
Opera
2nd
largest
mobile
ad
impression
aker
US

17. Agile
–
entrepreneurial
40mn+
SMEs
Employing
90%+
workforce
Pervasive
tradi8onal
businesses

18. Strong
cultural
heritage
Par8cular
need
Par8cular
ac8on
trigger
Par8cular
price
point
Par8cular
taste

19. Indonesia
digital
space
has
its
specific
challenges
1.
(Lack
of)
trust
2.
(Lack
of)
seamless
payment
“Less
than
10%
of
Indonesia
internet
users
have
done
online
transac8on”
*
*
eMarketer

20. Trust
Source:
APJII
>50%
reason
for
not
buying
because
fear
of
fraud/
can’t
trust
seen
item

21. Payment
20%
Banking
penetra8on
4.5%
Credit
card
penetra8on
No
seamless
way
to
do
online
transac8on
for
majority
of
customers

22. Top
8ps
for
successful
digital
integra8on
Truly
understand
the
market
-­‐
Use
local
wisdom
-­‐
What
they
need?
-­‐
What
trigger
the
ac8on?
-­‐
What
would
make
it
viral?
“Remember
that
while
we
are
talking
about
digital
world,
real
people
will
always
come
back
to
real
world”

23. ibudisantoso@groupon.com