indonesia & poland: technology & the future

Indonesia & PolandTechnology & The Future

Who am I?

Who am I?

Piotr Jakubowski@piotrj

Born in Indonesia

Finished primary education in Indonesia

University & work career in Chicago, New York & Tokyo

Native Bahasa Speaker

Who am I?

Returned to Indonesia in 2011

Specialization in digital advertising industry (Strategist & General Manager)

Silent investor & advisor in startups doing business in Indonesia

Advisor with SHARE Foundation since 2014

Share Foundation

As the name implies – SHARE Foundation is to share polish information technology as well as knowledge and experience of polish developers and coders with Southeast Asia, as we believe that good once shared, comes back from recipents sooner or later, so we warmly welcome and support SEA IT in Poland too.

In order to put into practice the idea, we have formed SHARE as a non-profit Organization - specifically to faciliate the transfer of information technology and human resources between Southeast Asia and Poland, as a main activity.

More about us: www.sharefoundation.co

Indonesia: Quick Facts

JAVA143 million people1,117/km2

POLAND38 million people123/km2

JAKARTA30 million people (11m city)4,383/km2 (14,440/km2 city)

WARSAW2.6 million (1.7m city)631/km2 (3,304/km2 city)

JAKARTA30 million people (11m city)4,383/km2 (14,440/km2 city)

POLAND38 million people123/km2

26 MILLION MOTORCYCLES

Digital & Tech Landscape

POPULATION: 255 MILLION

ACTIVE INTERNET USERS: 72 MILLION

ACTIVE SOCIAL MEDIA ACCOUNTS: 72 MILLION

MOBILE PHONE CONNECTIONS: 305 MILLION (128% PENETRATION)

ACTIVE MOBILE SOCIAL CONNECTIONS: 62 MILLION

SOURCE: WE ARE SOCIAL

DIGITAL NATIVESOVER 50% OF INDONESIA’S POPULATION IS UNDER THE AGE OF 30

SOURCE: APJI, PROFIL INTERNET INDONESIA 2012

TIME SPENT WITH MEDIA - DAILYAVERAGE INTERNET USE (PC): 5H 06MAVERAGE INTERNET USE (MOBILE): 3H 10M

AVERAGE SOCIAL MEDIA USE: 2H 52M

TELEVISION VIEWING TIME (INTERNET USERS): 2H 29M

SOURCE: WE ARE SOCIAL

INTERNET USAGEACTIVE INTERNET USERS: 72 MILLION

INTERNET PENETRATION: 28%

ACTIVE MOBILE INTERNET USERS: 54 MILLION

MOBILE INTERNET PENETRATION: 21%

SOURCE: WE ARE SOCIAL

SHARE OF WEB TRAFFICDESKTOP/PC: 45%

MOBILE: 50%

TABLET: 4%

OTHER: 0%

SOURCE: WE ARE SOCIAL

ONLY ONE WORD MATTERSMOBILE

MOBILE PHONESNUMBER OF SUBSCRIPTIONS: 308 MILLION

MOBILE PENETRATION: 128%

PERCENTAGE OF PRE-PAID CONNECTIONS: 99%

PERCENTAGE OF POST-PAID CONNECTIONS: 1%

PERCENTAGE OF 3G/4G CONNECTIONS: 34%

SOURCE: WE ARE SOCIAL

MOBILE ACTIVITIESSOCIAL MEDIA APP USE: 14%

MOBILE VIDEO WATCHING: 11%

MOBILE GAME PLAYING: 10%

LOCATION BASED SEARCH: 9%

MOBILE BANKING USAGE: 11%

SOURCE: WE ARE SOCIAL

LET’S TAKE A LOOK AT SOCIAL MEDIA

SOCIAL MEDIA ACCOUNTS

SOURCE: WE ARE SOCIAL

TOP ACTIVE PLATFORMS

TOP ACTIVE PLATFORMS

E-COMMERCE BY DEVICE

SOURCE: WE ARE SOCIAL

Digital & Tech Landscape:E-Commerce

70% OF E-COMMERCE ORIGINATES FROM

RURAL AREAS

SOURCE: TECH IN ASIA

78% - FASHION

46% - GADGETS

43% - ELECTRONICS

39% - BOOKS & MAGAZINES

24% - GROCERIES

Digital & Tech Landscape:FIN-TECH

Per capita GDP and Internet penetration percentage

Developed Market

20% of retail shopping is online

Emerging Market

<1% of retail shopping is online

Indonesian e-commerce and online transactions in general is still newly nascent.

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80 milInternet users

55 milConsumers joiningmiddle class

35% growthin mortgage lending

Indonesia’s demographic bonus. Millions of young people joining the middle class, going online and beginning to save and consume.

$ 565 bioForecasted size ofsavings and investment market in 2030

50%of population is under 30 years of age

24% growthin insurance premiums

26% growthin consumer lending

22% growthin Credit card transaction value

Before e-commerce After e-commerce

Macro story: technology-enabled society evolving from “push” to “pull” with the individual dictating what, when, where and how.

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Connectivity Logistics, HumanCapital, and Last Mile Payments

Structural Root Issues…Paper-based

systemsLack of

infrastructureAntiquatedregulation

Low Trust, poor consumer

protection

Poor nationalPoor nationaleducationeducationstandardsstandards

Growth constraints for Internet business in Indonesia

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But the winds of change are blowing…

ICT Initiatives eServices

Business-friendly,from our industry,open to innovation

Mobile PaymenteVoting, eTax,eApplications,

eHealth

1,000,000 families to get Cash Aid USD 20/month Distributed via Mobile SIM Card!

#SUPERCARD

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E-Moneyvs

Paper/plastic

P2P payments

vsCash

Customer data safety

VsNo customer

data

Big data analytics

vsGuess work

Personalized products

vsOne size fits

all

Lower loss rates

vsHigh NPLs

Faster transactions

vsGo to branch

E-Applications

vsWet

signature

FINANCIAL TECHNOLOGY

Financial Technology is a structural pillar that enables scalable innovation.

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NOT THIS INNOVATION

NOT THIS INNOVATION

CLOSER TO HOME

51

Bank Rakyat Indonesia (BRI) :465 mobile vans + 10K permanent branchesUSD 14B in micro lending alone (7M micro credits customers)

Domestic opportunity : USD 50B/yearMicro lending is proxy for branchless banking with massive opportunity

FinTech-enabled innovation – what is needed? Full-service branchless banking, microfinance, inclusion

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BANKED: 40% of Indonesian Adults

128 banks, 1600 microbanks, few hundreds multi finance lenders

FinTech-enabled innovation – what is needed? Credit Scoring for Banked and Non-Banked Data Sources

UNBANKED: 60% of Indonesian Adults

53

FinTech-enabled innovation – what is needed? True Digital & Mobile Payment

5454

BBM MONEY

FinTech-enabled innovation – what is needed? P2P payments and money transfers

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Consumer lending market : USD 120B (12% CAGR)Retail Insurance : USD 40B (15% CAGR)Life Insurance : USD 20B

FinTech-enabled innovation – what is needed? Online Comparison, Brokerage & Transparency

56

Center for Middle Class Consumer Studies /CMCS (2013): “The wealthier Indonesian moslem are, the more religious they become”

87%of middle class in Indonesia are

Moslem

2012(mn people)

2020(mn people)

Jump 26.6mn

Jump 26.1mn!

Jump 36.2mn! BCG Report

FinTech-enabled innovation – what is needed? Indonesian Moslem Middle Class Consumer

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But currently only has around 5% market size

Islamic Banks are growing faster than Conventional Banks in Indonesia

Statistik Perbankan Syariah 2014

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Structural solutions for the

e-commerce industry

Enable creative producers like

games and music to gain truly mass

distribution

Enable development (mass market

remains largely unbanked)

Impact of fintech

Enable SMEs and the small

businessman

Digital & Tech LandscapeMobile

Knowledge sharing:Polish ict in indonesia

Polish ICTin Indonesia

„There are two reasons why I believe Indonesia is one of the most important markets to enter. From hiring standpoint, there is already a substantial amount of talent based in Indonesia. More importantly, Indonesia is a booming economy. Early presence might convert to a leadership status in following years for any company entering Indonesian market.”

„Poland is known for big number of excellent engineers and Polish companies - for ability to build great products and outstanding IT solutions. Indonesia on the other hand, is a growing, booming market which has a great need for technology to solve even the most simple challenges.”

Doing Businessin Indonesia

„Developing a startup in Indonesia is fun. Emerging markets tend to have relatively high barriers to entry, but these can be construed as a competitive advantage to those savvy enough to successfully navigate them.”

JP Ellis – Founder CekAja, President Indonesia FinTech Association

7 challenges of ict business in indonesia

1. Infrastructure17,000 Islands, lack of roads, transport, etc

1. Infrastructure – connectivity300 million mobile connections, more data

2. Fragmented audiences17,000 islands, 700 languages, 300 ethnicities, 6 religions

3. E-Paymentsdistrust of online payments, cod and transfers still rule

8 million credit card holders in indonesia

4. Permits & Regulations53 business days to set up a company (Poland: 30)107/175 on transparency.org corruption index (Poland: 35/175)

5. Enforcing contractsIndonesia ranks 114 of 185 according to world bank “Doing Business” Rankings

6. Talentgood talent is difficult, but not impossible to findcurrently, only 36,000 students are studying abroad

7. People businessindonesians are a very collectivistic society, and favor personal relationships (both clients and employees)

The good news:Opportunities for ICT in indonesia

1. Growth potential20% of population is online…

2. Government supportICT Minister Pledges $1 billion support for startups

3. Technology is the solution17,000 Islands, lack of roads, transport, etc

3. it’s working…jakarta – smart city

3. it’s working…go-jek: Formalizing the “ojek” industry

3. it’s working…go-jek: Formalizing the “ojek” industry

3. it’s working…co-working spaces: Jakarta

3. it’s working…co-working spaces: BALI

THANK YOU & LET’S DISCUSS