My ancestors roll in their grave every time a startup wants to expand to Indonesia
While the prospect seems great, one does not simply walk into Indonesia unprepared
As an Indonesian correspondent for e27, I have had great opportunities to meet local and international, new and seasoned startup founders in various occasions. Many of them speak of how big the Indonesian market is, how great its potential, and how excited they are to enter this market.
All these are completely fine until they mentioned their strategy, and my ancestors immediately roll in their grave.
Well, maybe not. At least my eyes would roll because many seem to be taking this market lightly, forgetting these three crucial points that you need to consider when entering Indonesian market:
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The market is almost as diverse as Southeast Asia itself
Bandung and Jakarta are only two to three hours apart by car, but kids in these cities dress up differently. Heck, even North and South Jakartan kids dress up differently.
Weekends in Jakarta are very mall-centric so I was surprised to know that cool kids in Bali hang out in mangrove parks.
The point to this story is that, the different ways people hang out and dress up gives us a lot of information on how they consume. Eventually, different ways to consume mean there are different ways to acquire users.
I talked to serial entrepreneur Alvin Yap last year and he pointed that most foreign companies think of Indonesian market as if it consists of only ‘Senayan City (a high-end mall in South Jakarta) while it is much bigger than that.’
His statement made me feel like jumping from my seat and scream ‘Amen!’
Informal sector is king
The other day I talked to the founder of an online grocery shopping service and I asked him how he would persuade Indonesian housewives to use its app, as they are accustomed to have their groceries delivered by ‘tukang sayur‘ (vegetable men).
When you are entering Indonesian market, your competitor is not the other startup who is in the same sector as you are. Your competitors are the informal, traditional sectors, and no, stop denying this. Stop denying this. The informal sector is such an internal part of Indonesian lives; the reason why despite all those e-payment apps in the market, we would still use cash, is because that is the only way to transact with these people.
This is not a battle between Go-Jek versus Grab; this is a battle between Go-Jek and Grab versus traditional ojek men.
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Untapped market here and there
This is partially our fault. Thanks to the oppressive New Order regime, all business activities are centralised either in Jakarta or Surabaya. Or Bali, if you are into the eat-pray-love lifestyle.
While the situation is getting better with more government initiatives to vamp up infrastructure, it still leave markets outside of Java longing for businesses to actually look towards their direction.
William Tanuwijaya was right when he told us in an interview that he does not wish to expand Tokopedia’s business abroad, because data hath spoken and it told him that there is a strong demand for e-commerce in Sumatra and Borneo.
Thus, if you are really serious about entering this market, then sit down and listen what this local has to say about preparation:
Research
Not only formal research as produced by management consultation firms, but also real-life observation. Learn Bahasa Indonesia and try to sit and hang out with ojek men in warungs; they can teach you so much more about this market. Perhaps even more than all those reports and numbers.
One of my biggest pet peeves as an Indonesian professional: Expatriates who are working in Indonesian market, boasting about wanting to champion this market, but choose to live in a bubble by hanging out only at Pacific Place and living in a lavish apartment in Mega Kuningan.
How can you win this market if you don’t even bother to understand its people? How can you understand Indonesians if you don’t even want to sit and hang with us?
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Focus
Go on, keep on bragging about your multitasking skills. But some things in life require focus, and that includes entering Indonesian market.
If all the existing data about Indonesian diversity fail to convince you, let me put it into perspective:
Entering Indonesian market is equal to entering 34 different countries at the same time. Stop underestimating the hard work you need to do to achieve this.
I talked to a founder who wants to enter three different Southeast Asian countries in one year, including Indonesia. It sounded as reckless as trying to drive a car and iron your clothes at the same time. Calm down and try to focus. We know you secretly cry at night when your business go bust.
Start from here
Markus Bihler was right – start from the most difficult market. You don’t begin in developed countries where businesses are well-facilitated and regulations are clear; you begin where things are messed up, and you train yourself to deal with these difficulties. After that, everything else is a walk in the park for you.
I am not even going to be polite and use ‘challenging’ here, but I am going to be honest by saying that Indonesia is a great place to start because it’s difficult. It’s freakin’ difficult. Trust me, I was born and raised here. Did you see how unimpressed I am by how easy you are taking this market?
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