• Tuesday, July 23, 2019

Indonesia: The New Tiger Of Southeast Asia

Discussion in 'China & Far East' started by katarabhumi, May 15, 2019.

  1. katarabhumi

    katarabhumi FULL MEMBER

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    Elad Natanson - May 14, 2019, 02:12pm

    In the second half of the last century, Hong Kong, Singapore, South Korea and Taiwan became known as Asia’s “tiger” economies as rapid industrialization, trade, and development of finance led to high rates of sustained growth. Today the first two countries are world-leading financial hubs and the second two are known for their state of the art manufacturing industries.

    A similar transformation is occurring in Southeast Asia, only now the forefront of change is being driven by the mobile economy. Nowhere is this more evident than in Indonesia, the fourth largest country in the world by population. That’s right – Indonesia is home to over 265 million people. Here are some other amazing facts about Indonesia:
    • It’s a young country. The median age is 29, and 60% of the population is 40 or under.
    • It’s one of the most mobile-first countries in the world: of the 150 million internet users in Indonesia, 95%, or 142 million, are mobile.
    • 60% of all adult Indonesians now have smartphones.
    When you combine these three factors, Indonesia represents a huge population of young, mobile savvy digital natives. Indonesians spend 206 minutes a day on social media compared with the global average of 124. Top platforms like Youtube, Whatsapp, and Facebook are all used by more than 80% of online Indonesians. And 76% of all internet users in Indonesia make purchases from their phones, the highest rate of mobile e-commerce of any country in the world.

    The last few years have seen an explosive rise in Indonesia’s internet economy. In addition to e-commerce, online gaming, advertising, subscription music and video, as well as online travel and ride-hailing/food delivery services are all enjoying eager adoption from Indonesia’s young consumers. An in-depth report by Google and Temasek released last year states:

    The Indonesian “digital archipelago” is firing on all cylinders. Supported by the largest internet user base in the region (150 million users in 2018), Indonesia has the largest ($27 billion in 2018) and fastest growing (49% CAGR 2015-2018) internet economy in the region. With huge headroom across all sectors, it is poised to grow to $100 billion by 2025, accounting for $4 of every $10 spent in the region.

    Indonesia’s booming mobile economy has been fueled by a major surge of venture investment, with $6 billion raised over the last four years. As one venture capitalist wrote in Venture Beat, the opportunity in Indonesia today is like investing in China in 2008. Billion dollar “unicorns” have emerged in several major sectors, like Tokopedia (e-commerce), Traveloka (online travel reservation), and Go-Jek (ride-hailing). What has VCs so excited is the ability to back proven business models from China and the US while adapting them to this large untapped market.

    But significant challenges and impediments to growth remain. Similar to India, Indonesia suffers from poor infrastructure. While mobile data is relatively cheap, bandwidth is poor: average mobile download speed is about 10 mbps, less than half of the global average. And while smartphone use keeps increasing, relatively cheap phones don’t have much data storage, which makes users picky about which apps they use regularly.

    Perhaps the single greatest challenge (and opportunity) for Indonesia’s mobile economy is in payments and e-money. Google and Temasek predict that e-commerce in Indonesia will reach $53 billion in 2025. This growth is even more impressive in light of the fact that less than half of Indonesians have a bank account, and only 2.4% of Indonesians have a credit card. Herein lies the great paradox of Indonesia. 56% percent of all Indonesians inhabit large cities and are increasingly living their lives on mobile devices. The other half reside in rural areas and are scattered across 17,000 islands where cash remains a primary medium of exchange. Because traditional banks have relied on physical locations to gain customers, this dispersion has limited their reach.

    With more and more of Indonesia’s 180 million unbanked now using smartphones, the race is on to provide them mobile money and financial services. A wave of new fintech startups are attacking the space, but some of the greatest strides have been made by players like Go-Jek, which already has a large distribution and a strong organic pull to drive adoption. Go-Jek’s mobile wallet, Go-Pay, makes it easier for their motorcycle drivers to get paid. At the same time, Go-Jek has partnered with traditional banks to offer conventional products like mortgages. This is truly transformational. A recent article in Nikkei Asian Review cites an example of a street food seller who became a Go-Jek driver. He had never before been considered creditworthy, but after driving for Go-Jek for four years he was able to obtain a mortgage from a state owned lender that partners with Go-Jek and will be able to purchase his first home. Amazing!

    This is like Uber in reverse: instead of a ride-hailing app exploding because everyone has a credit card and mobile wallet to drive adoption, the use of the transportation service is driving financial inclusion and transforming people’s lives.

    It’s easy to see why Indonesia’s mobile economy is an exciting place to be. For app developers and marketers, what are the opportunities? Here are some ideas. One, video is a dominant media format. Using video for app marketing or developing youtube influencers to sell your brand or app are good ideas. Also, consider focusing on women and their needs and desires. Another Google report showed that women are responsible for most high-frequency household purchasing and therefore are a good target for e-money services. In addition, these young women are very trend conscious and so influencing/curation/review platforms will be extremely valuable for ecommerce.

    In general, one way to view the current mobile app opportunity in Indonesia is that the “first-order” platforms – the equivalent of Amazon or Uber – have been built and that value will be created in “second order” platforms. So instead of a travel booking site like Expedia, focus on a travel review site like Tripadvisor. As the burgeoning millions of young Indonesians spend more and more time and money on mobile, curating/validating the things they need and love will become more and more valuable. Just some thoughts to inspire you to dig deeper and come up with your own killer app for one of the world’s hottest mobile markets!

    https://www.forbes.com/sites/eladnatanson/2019/05/14/indonesia-the-new-tiger-of-southeast-asia/

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  2. Mamadouso

    Mamadouso FULL MEMBER

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    Can Indonesia become a Superpower? If idiot Indian are claiming to become a Major Power soon, I don’t understand why Indonesia has not got a bigger vision.

    It is a huge and powerful nation, it just need a bolstered military.
     
  3. war&peace

    war&peace ELITE MEMBER

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    I'm happy for Indonesia.

    India is overrated and all propaganda. Their most of the figures and statistics are fake and questioned by independent sources. And still even with those fake numbers, India is no where even close to China with comparable rather bigger population. Also, Indias future is disintegration into its natural constituents i.e. 25-50 due to the increasing intolerance and economic instability. They have been pumped up by the west to counter China since they easily sell their souls otherwise India has less potential than any other country in the region.
    Furthermore, they have fever to become a vedic supapawa but they failed... first deadline was 2012 and the new deadline is 2020 and you can join this thread to keep a track.

    Superpower by 2020 countdown

    Chinese on the other hand never claim that they are superpower or have the ambitions to become one but the world knows and says they are powerful nation at global scale in terms of economy and military though China has never transgressed its boundaries in 2000 years of its history.
     
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  4. Brainsucker

    Brainsucker FULL MEMBER

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    Why do we need to be a super power? We just want be better. A self improvement is way more important than an empty claim such as Super Power.
     
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  5. Indos

    Indos PDF THINK TANK: ANALYST

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    With democracy as our system and the fact that many of us are still poor I think it will take more time for us to have a very strong military. If we got some surplus in our state budget, it will likely be used for our infrastructure and welfare like having our own "Obamacare" (starting 2014), subsidy in education (free education fee for government built school) and others, than building our military. Even there is a plan to give salary and free training for fresh graduate for 6 month starting next year. Despite so, if the economy keep growing maybe there is hope to have a big military budget starting from 2024 or 2030.
     
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  6. Mamadouso

    Mamadouso FULL MEMBER

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    Yes I can see I am still learning about S E Asia. There are very few Indonesian abroad to talk with. Maybe Indonesian approach is different to the ‘traditional’ aim to become a superpower. You are much more honest than the deluded Indians, I appreciate that you don’t pretend anything.

    I think Indonesia definitely need to strengthen military and project some influence though. It must protect against China.
     
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  7. Indos

    Indos PDF THINK TANK: ANALYST

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    Actually Indonesia was quite strong militarily under Soekarno and even at that time (1960's) tried to fight British, Australia, Malaysia, New Zealand all together for another expansion in Malaysia (Ganyang Malaysia). During ancient time we also had kingdom like Srivijaya and Majapahit who has strong military with large territory in South East Asia. The different between Indonesia in the old time and Indonesia Today is that we currently practice democracy where power lies on people, not under a strong and authoritarian leader anymore. Welfare and economic development program seems to have more support during election time. But there is still chance to have big military spending, particularly when our people has relatively been satisfied with current welfare program and getting very high employment rate. I predict 2024 or 2030 is the time.

    Yes I think you are right that there is a need for Indonesia to balance China power and influence in South East Asia and particularly within South China sea area. Actually there is significant increase on our defense budget during Susilo Bambang Yudhoyono administration within 10 years of his administration. Beside significant increase on defense budget, our defense industry is also boosted with ambitious project like N 219 plane, KFX/IFX fighter, rocket, medium tank, submarine, frigate, radar, etc and they are all protected under supportive defense industry law (since 2008).

    Our defense budget under Jokowi administration is not decrease but stable at 8 billion USD. He focuses its administration on infrastructure project and maintain welfare program which was started by Susilo Bambang Yudhoyono on education and healthcare. I dont see him backing down on his focus on infrastructure and welfare and even he create another welfare program for unemployed fresh graduate. So I predict there will be fix 8 billion USD for another 5 years, if there is an increase during his second period it will be minimal and not large.

    2024 will be a different administration since Jokowi has reach his final 10 years period as President. This time Indonesian will have a new person as president inshaAllah. Our state budget is predicted to be much bigger with stronger Rupiah (our currency) and economy inshaAllah. KFX/IFX fighter program is also predicted to have already reached mass production stage and can become our largest defense program until 2035. I think 2024-2035 is a perfect time to boost our defense budget as it is also inline with our defense industry maturity and predicted sufficient budget with hopefully healthy trade balance.
     
    Last edited: May 15, 2019
  8. DoTell

    DoTell FULL MEMBER

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    Protest against China about what?
     
  9. grandmaster

    grandmaster FULL MEMBER

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    Good luck and be careful, watch out vietnam, vn says they are number one in the world. If Indonesia wants to be number one in ASEAN then they will go behind and stab your back.o_O
     
  10. Mamadouso

    Mamadouso FULL MEMBER

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    The dispute in S China Sea. I know US is provoking issue but still Indonesia is a large island nation and will need a military presence - or US will muscle in