Is it a Good Time to Start a Business in Indonesia | Business Opportunities in Indonesia
/2020 has undoubtedly been a difficult year for everyone so far. Before the Covid-19 outbreak, many economic analyst predicted a positive economic growth in Indonesia post-election year. However, would these economic analysts still feel the same way about our economy post-Covid19?
Warren Buffett once said, “Be fearful when others are greedy, be greedy when others are fearful.” Indeed, during a business boom, people tend to scramble around to get a piece of the pie thus inadvertently drive up prices. Business opportunities that would not seem attractive in a normal business environment, can suddenly seem more attractive than it actually is. A downturn or a period of slow growth can in fact be a good time for entrepreneurs to think about the long term plan of their business or even discover and acquire undervalued assets. However, whether it is a good time to start a business or not depends on an entrepreneur’s business model and risk tolerance.
Opportunities in the Indonesian Market
1. Government Supports the Growth of Startups
As part of President Jokowi’s campaign promise, the Indonesian government is working on “making Indonesia 4.0.” Part of this is supporting the growth of startups. The government also helped create a conducive startup ecosystem through agencies like Bekraf and attracting organizations such asGK Plug and Play Indonesia The Indonesian government is also working on easing the complicated and time consuming incorporation and business licensing regulations to support the growth of businesses and attract foreign investors.
2. Rapid Growth in Smartphone Adoption
In Indonesia, nearly two-thirds of the 264million population owns a smartphone.The rapid growth of smartphone adoption is partly fueled by the entrance of low priced smartphones by brands such as Xiao Mi and Oppo, as well as the relatively affordable (compared to other countries) data rates. This creates a huge platform for innovation in the mobile application space.
Jakarta, the Capital City of Indonesia, is the Archipelago’s financial and political center (Source: Unsplash)
3. Large Unbanked and Underbanked population
Indonesia has an unbanked population of approximately 180 million. This means that there are more people with smartphones than bank accounts in Indonesia. This creates a gap for digital banking solutions to tap into. This is especially true in more rural areas of Indonesia where it might be financially unfeasible to tap into. Digital banking solutions might be the solution to go in the future.
4. Investors are Actively Looking to Invest in Indonesia
Many investors, especially Venture Capital funds, are actively looking into investing in home-grown technology startups. Many banks and conglomerate groups have also set up a digital ventures investing arm to facilitate deal sourcing and investments into these innovative startups. There is even an “Indonesia-only” venture capital fund (Intudo Ventures) that concentrate solely on investing in Indonesian Startups. Other Venture Capital funds active in the Indonesia market are East Ventures, Skystar Capital, Venturra Capital, Monk’s Hill Ventures, MDI Ventures (Telkom), Convergence Ventures, GK Plug and Play (accelerator), BRI Ventures, Central Capital Ventura (BCA), Mandiri Capital, and many more!
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As featured on: The Jakarta Post, Daily Social, Detik, Tech in Asia, and more.