Day two of Startup Asia Jakarta 2014 is go go go.
Demystifying Indonesian ecommerce
Daniel Tumiwa, the chairman of idEA (Indonesian Ecommerce Association), started off the second day with a 15-minute keynote focused on the nation’s burgeoning ecommerce industry.
He starts by pointing out that, as in other nations, ecommerce growth will be driven by the rising middle class. In Indonesia, 22 percent of the population will have annual disposable income of US$15,000-$30,000, while 65 percent of people will have US$6,000-$15,000 available for spending.
Middle class spending continue to rise. #StartupAsia pic.twitter.com/BFkzQILTgi
— Amanz Indonesia (@AmanzID) November 27, 2014
After Java island, growth will shift to Sulawesi and Sumatra. Tumiwa says there are “real opportunities” to solve an array of problems outside the capital, such as logistics and payments, using things like emoney, SMS payments, and other workarounds.
“@AmanzID: #Sumatra and #Sulawesi are the next region of #urban growth #StartupAsia pic.twitter.com/0n6xNQv17j” #Indonesia
— Anders C. Johansson (@andcjoh) November 27, 2014
A recent survey says that about 45 percent of Indonesians want to shop online this year, and that will drive online spending growth ten-fold in the next few years. Though trust and epayment issues remain, things like lower prices are a big driver.
Understanding Epayments in Indonesia
In a perfect complement to the previous session, Nabilah Alsagoff, the COO of Doku, gave an enlightening keynote on figuring out and solving epayments in the country.
See our full story here.
e-Wallet with phone access is very appealing to younger crowds in Indonesia. #StartupAsia #onlineshopping #ecommerce
— Indriani Widyasari (@TrifenaIndri) November 27, 2014
Online retail on negative investment list – is it good or bad?
Continuing the ecommerce theme, this session was a discussion between three experts in the field, interviewed by Ryu Kawano Suliawan, the co-founder and CEO of Veritrans:
- Mahendra Siregar, former chairman, Indonesia Investment Coordinating Board (BKPM)
- Daniel Tumiwa, chairman, Indonesian Ecommerce Association
- Kuo-Yi Lim, founding partner, Monk’s Hill Ventures
Earlier this year, Indonesia introduced new rules on foreign investment, limiting the stakes that can be taken by foreign entities in firms involved in things like energy, agriculture, retail, and storage. That affects ecommerce and warehousing, effectively banning foreign investment in that area.
Kuo-Yi Lim says that this new approach by Indonesia is a bit like what’s happened in China for over a decade. He says it won’t affect VC interest in ecommerce, and might lead to workarounds like the VIE structure that foreign investors use to hold stakes in Chinese web giants like Alibaba and Baidu.
full house learning about foreign investment in Indo ecommerce. #StartupAsia pic.twitter.com/a9OVeRCnny
— Steven Millward (@SirSteven) November 27, 2014
Genesis of sustainable sources of business: local knowledge, local operation. – @limky #StartupAsia pic.twitter.com/HbnWvZTRuc
— Monk’s Hill Ventures (@monkshillvc) November 27, 2014
Mahendra Siregar says that the negative investment list came without an adequate discussion, resulting in what he calls a bad copy-paste from offline retail regulations.
Tumiwa, back onstage after his helpful keynote, explains that foreign investors are being locked out before they’ve had a chance to see the opportunities in the Indonesian market.
The panel then went into VC-level detail on the returns on startup investment versus real estate.
Lim says that the “baptism of fire” of intense competition has helped Singapore’s startups – and so it’d be better for Indonesian startups to have the same experience rather than be shielded from foreign competition by regulations. “What we need is more failures,” Tumiwa pitches in; that will make Indonesia’s tech ecosystem stronger.
Ending on a positive note, the panel agrees that the regulations could be changed and that VC interest in Indonesia will not vanish.
Panel on failure & need 2 ‘expose entrepreneurs to the baptism by fire that is competition-they will come out stronger’ @limky #StartupAsia
— Hilary Szymujko (@HilSzy) November 27, 2014
How to market to Muslims
Our keynote presenter this time is Fazal Bahardeen, founder and CEO of CrescentRating. He starts by saying that multiple estimates paint the market as one worth anywhere from US$2-$7 billion. It spans the world, but Indonesia is the biggest single muslim nation.
The muslim-oriented services – both online and offline – span religion, food, lifestyle, and culture in general. Online, that could take the form of halal food delivery, travel (to take the annual pilgrimage, for example), or mobile apps. There’s no market leader catering to muslims in any online sector.
Bahardeen says that startups can even serve up generic things, like flight booking, in a special way for muslim-friendly travel packages, so there are plenty of niche areas.
Women on the web: a guide to consumer behavior
Hanifa Ambadar, the founder and CEO of Female Daily Network, gave the audience a keynote on this important demographic.
Badass Hanifa Ambadar got out of a taxi in a traffic jam and jumped on a motorcycle to speak at #StartupAsia pic.twitter.com/EceAkhPWBl
— Casey Lau (@casey_lau) November 27, 2014
40 million Indonesian women are online, of whom 25 million are aged 18 to 45.
“Women are influential and easily influenced – and very social,” explains Ambadar. 74 percent are influenced by social media, according to a survey commissioned by her startup; 78 percent want personalized recommendations based on purchase history. So startups need to offer that kind of guidance.
Women are not uniform across age, she points out. And so they become consumers based on stages of life, such as for motherhood, an expanded family, or professional life.
What women buy online #startupasia pic.twitter.com/uXRxZPgnXY
— M Fajrin Rasyid (@fajrinrasyid) November 27, 2014
Learning from Rocket Internet graduates
Former execs from Rocket Internet are now building new, independent startups. The three who flew the coop are:
- Juan Chene, VP of business development, Bobobobo
- Steven Kim, co-founder and CEO, Qraved
- Fung Fuk Lestario, co-founder and CEO, Rupawa
See our full story on this discussion here.
You can’t fight rocket head on, but you can focus on winning local communities, something that rocket does not focus on. #StartupAsia
— Moritz Heininger (@MoritzHeininger) November 27, 2014
It’s funny that Rocket Internet has become an incubator with people leaving to launch their own startups #StartupAsia pic.twitter.com/66fJ1ax3Cy
— Casey Lau (@casey_lau) November 27, 2014
Which internet regulations in Indonesia should the government amend?
Rudiantara is Indonesia’s new Information and Communications Technology (ICT) minister. He appears so far to be much more tech savvy and open to receiving feedback than his predecessor. See our full story here.
The minister starts by saying (to Tech in Asia’s Enricko Lukman) that his background is in telcos as an executive, so now he’s keen to learn about startups and the entire tech ecosystem.
Chief @rudiantara_id shared his 4 wks as Minister #StartupAsia @Techinasia. Hope Chief RA can support Indo Startups pic.twitter.com/KHEslR0wgV
— Dicky T (@DickyT_STIIndo) November 27, 2014
He says the government is focusing on infrastructure, because that’s what the country needs to build up the tech industry and the economy in general. The ICT ministry has not yet drawn up specific plans related to encouraging tech startups.
Moving on to the topic of censorship, Rudiantara says that the case of Vimeo, which is blocked in Indonesia, is a first priority in this regard. He says that as soon as he got into the job a few weeks ago, he had people asking him about Vimeo, saying the creatives-oriented video site was useful to Indonesians. It was blocked over concerns about nudity, which is treated almost the same as pornography in the country.
The minster has had a video conference with the Vimeo team in the US and says the newly-elected government is keen to listen. He has asked if Vimeo can prevent Indonesians viewing “pornographic content” so that the site can be unblocked by authorities.
800,000 porn sites are now blocked in Indonesia, Rudiantara confirms.
Rudiantara, “Prinsip pemerintahan baru adalah untuk mendengar, berdiskusi, dan mencari solusi.” #StartupAsia pic.twitter.com/DNvpNNTj0T
— Tech in Asia ID (@TechinAsia_ID) November 27, 2014
The minster also talked about how the ICT department is clamping down on illegal activity on the web, such as people using it to sell drugs. Our interviewer asks why something innocent such as nudity is such an issue when there are larger problems on the internet and in the nation, but the minister continues by saying that “porn” is a problem and there’s no let-up in combatting it on the web.
Our discussion then went toward the broadly defined ITE law and how it could curb freedom of expression on the web in Indonesia. It also encompasses defamation based on being offended by something, which could lead to someone being sued for what someone says on a social network. Rudiantara admits that law enforcement might treat cases differently.
How aCommerce is trying to solve infrastructure bottlenecks in Southeast Asia
We’ve heard a lot about the issues across Southeast Asia that are holding back startups – especially ones involved in ecommerce. For this session, Paul Srivorakul, the CEO of Thailand-headquartered aCommerce, talked about how his startup has built a business (it recently raised a round of US$10.7 million, which is a big series A by Southeast Asia standards) on making ecommerce easier in the region. The startup provides logistics services to startups – and has even been used by Line for its recent experiments in mobile commerce.
He says that if logistics are fixed, then ecommerce grows, and in turn online advertising grows. Srivorakul has a background in adtech. Srivorakul explains that it was important that part of the series A came from Indonesia’s Sinar Mas Group, which helps reduce the cost of warehousing because Sinar Mas owns so much land in the country. He likes the startup to have strategic partners in each country where it’s active; “We’re very, very local,” he says.
He says a series B for aCommerce will come in mid-2015.
Acommerce: “Outsource will be replaced by crowdsource” #StartupAsia Jakarta
— Bintang Y Soepoetro (@bysoep) November 27, 2014
The fragmentation in ecommerce across Southeast Asia is good news for the company, he says. That fragmentation makes merchants need support from services in order to run online stores across a variety of marketplaces. He calls the firm “middleware” in that support services are important, not just the logistics element.
Srivorakul then went on to talk about the importance of company culture, listening to staffers, and corporate transparency.
ACommerce now has about 300 employees, most of whom are in Thailand and Indonesia. He’s seeing most demand for more ecommerce services in Vietnam and Malaysia.
He went on to explain that crowdsourced delivery startups like GogoVan are disruptive and interesting, but he doesn’t see it/them as being quite the same as the range of logistics/delivery services that aCommerce offers to online merchants. Srivorakul will experiment with something a bit different later, but he can’t yet reveal what that will be.
The startup downsized in Singapore in October as it’s such an expensive, developed, and small market. But he ended by revealing that his team will reveal something new for Singapore in mid-December.
Rovio high in the sky in Indonesia
Rovio’s Peter Vesterbacka was interviewed by local gaming entrepreneur Anton Soeharyo (TouchTen). Vesterbacka started off by giving a run-down of Rovio history and the making of the smash-hit Angry Birds.
Peter.V from Rovio – Angry Bird is speaking on stage #startupasia. so basically, AngryBird came from student project. pic.twitter.com/9yYR1sPnk4
— Vanya V (@vanya2v) November 27, 2014
The team used to build games for other people. One game was pre-installed on over 200 million Nokia phones around the world, so that was perhaps technically Rovio’s first big hit. The Angry Birds series has now seen 2.5 billion downloads – way past the goal of 100 million that they set when they realized the game had the potential to go viral.
“Ideally, test games on people who don’t play games,” he says. Indeed, Vesterbacka reveals that a team member’s mother was the first fan of Angry Birds when he took a demo version of the game home during Christmas, which was what made Rovio feel like the game would be a game-changer for the Finnish startup.
Vesterbacka doesn’t have stats for downloads or gamers specific to Indonesia, but he says the company should do more stuff especially for Indonesia, rather like it has done with special Chinese-themed levels for the China market.
Rovio’s first movie is due in 2016.
game idea for Vesterbacka: Angry Birds Traffic, set in Jakarta. the birds need to smash through the traffic jams! #StartupAsia
— Steven Millward (@SirSteven) November 27, 2014
Tokopedia – the Alibaba of Southeast Asia?
Tokopedia’s recent US$100 million investment has energized the Indonesia startup scene. So one of the most hotly anticipated sessions at this Startup Asia event is with the marketplace’s co-founder and CEO, William Tanuwijaya.
Our full story is here.
Xiaomi in Indonesia
Another star attraction was Xiaomi’s Hugo Barra. The Chinese phone brand launched in Indonesia and a few other Asian nations this year, and it’s shaking up the fast-growing smartphone market.
Our full story is here.
.@hbarra talks about Indonesia, India, Mi fans, startup partners, and offline sales. #Xiaomi #StartupAsia pic.twitter.com/M5L4ZsBh5i
— Steven Millward (@SirSteven) November 27, 2014
Startup Arena
Our Startup Arena battle in Jakarta is made up of nine fresh-faced tech teams. Follow all the action on our Startup Arena tag.
7 elements you need to build greatness in your startup
After a day containing a lot of talk of hockey stick growth and startup unicorns, our event ended with a ton of practical advice for Southeast Asian startups from Peng T. Ong, the managing director of Monk’s Hill Ventures.
These are his seven points:
!. BHAG - This stands for Big Hairy Ass Goal. Yes, really. Think about ideas that make a difference – if not in the world, but in your region. Don’t fixate on valuation. Just make a difference.
- People - Hire the best people and, when you do, think of point number three…
Culture - This also relates to people. There’s always a culture, so you as founders need to shape it so that it’s a smart culture, not a sloppy one culture. Good people shape a good culture.
Advisors - You need advice.
Phasing - “This is a fancy way of me saying there are two steps to building a startup.” The first phase is not the final version of the company. The second part is when you “crank things up,” Peng says. But you only crank once you’ve figured out that you’re doing things right in the first phase.
Ramp - “Ramp to what? Ramp your revenues to what?” So know your goals and get advice on them.
Clarity - With those six points in place, “clarity is about everything you do,” he says.
This is part of the coverage of Startup Asia Jakarta 2014, our event running on November 26 and 27. Follow along on Twitter with the #startupasia hashtag.
This post #StartupAsia Jakarta highlights – day 2 appeared first on Tech in Asia.
#StartupAsia Jakarta highlights – day 2
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