Thanks to all of you, investors, entrepreneurs and corporate decision makers, who showed up at our sharing session “Chinese gold rush in Indonesia” last Wednesday (29 Nov).

It was a cosy night. We had some very interesting discussions with people sharing questions, concerns, personal experiences etc.

We started with a little exercise – guess how many apps among the top 45 in Finance Category of Google Play Store Indonesia were Chinese:

Guess which apps among these are Chinese-owned?

Answers ranged from 1 to 45 (I guess the person who guessed 45 was clearly very confident about Chinese fintech companies in Indonesia). Well many are still surprised when the final results were revealed. (Write to us [email protected] if you would like to know the answer).

Our colleague Jialei shared some results from a recent study we carried out on Indonesia’s cash loan market:

Kredivo is famous, according to a recent consumer survey we did

Afterwards, we asked the audience what questions they would like answered during the session. Here is the list:

  1. Focus area of money going into Indonesia
  2. Better to buy or better to build
  3. Chinese funds active in Indonesia
  4. How can I make money in Indonesia
  5. Timing – especially for startup without a sugar daddy or investors
  6. Local X factor
  7. Structure of investment
  8. Readiness of infrastructure and regulation
  9. Perception of Chinese money and startups in Indonesia
  10. Government/conglomerates attitude towards foreign startups
  11. Pitfalls
  12. Round sizes
Jialei Zhao sharing findings about Indonesia’s consumer finance market

Here are some of the answers discussed (it was indeed difficult to take note on every point raised):

1 – Focus area of money going into Indonesia

  • Fintech (specifically consumer finance) is a top area attracting entrepreneurs and investors from China at the moment. Consumer finance has always been big in Indonesia but many issues remain: customer acquisition, regulatory outlook, risk control, and money disbursement/collection. Thus there are lots of opportunities in this great shift.
  • With Alibaba’s US$1.1 billion investment into Tokopedia, general ecommerce platforms have become giants’ play, leaving little or no room for startups. However, with so much money poured into the big platforms, the ecosystem will grow, fostering a lot of opportunities up and down stream.
  • A few logistics companies have been able to raise big rounds recently, for example. We believe that content platforms (or any platform which depends on marketing dollars as main revenue source) will catch investors’ attention as well. There are a number of content services (Babe for example) that have amassed tens of millions of users but have thus far found it very difficult to attract advertisers. This should change.
  • Transport will be dominated by Go-Jek, payment solutions may follow. Similar to Tokopedia, Go-Jek will probably not be able to spend all its funding raised on growing the business, so a lot of investments or acquisitions are expected.
  • Many consumer models, including gaming and even offline retail, will benefit if GoPay makes transactions of money fast and reliable.
  • Another area to pay attention to is travel, with Traveloka already becoming the largest (a.k.a. richest) OTA. But there are many opportunities on the travel spectrum that are up for grab (not Grab).
  • And finally startups are starting to not only realise (to understand), but also realise (to make it happen) the value of data. From targeted marketing to credit scoring or even business performance, more data companies will emerge.

2 – Better to buy or better to build

  • Depending on who you are and what kind of resources you possess.
  • Building is always hard and should be reserved to people who really know the local market, and have the determination to overcome all difficulties in building & scaling a business.
  • Buying is reserved for those who have the resources to take an existing business to the next level, especially those who can’t afford the time and risk of building something from scratch. Time is critical there, buying a company that is imperfect might still be faster than building a new one – that saves you a lot of time especially in a highly competitive environment where two months of delay can determine success or failure.
  • Case in point: Alibaba eventually decided to buy Lazada instead of building Taobao in Southeast Asia, even though Taobao team had been on the ground preparing to build something on their own.

3 – Chinese funds active in Indonesia?

  • Gobi & 01VC are two probably most active Chinese funds in Indonesia since last year. Legend Capital, and a few strategic investors such as Apus are also quite active in Indonesia. There are many more funds making frequent trips to Indonesia and we have personally spoken with about 50 of them.
  • Also, big guys such as Alibaba, Tencent, and Fosun are pretty active in Indonesia.

4 – How can I make money in Indonesia?

  • Be at the right place, right time (and work hard of course). 

5 – Timing for investors and startups, especially startups without a sugar daddy

  • We would argue that it is better than ever for many sectors. Infrastructure is more mature, and attention is there (not a day goes go by with some investors from China contacting us about opportunities in Indonesia).
  • While ecommerce platform play is more or less reserved for the giants (and their allies) and Go-Jek dominates ride hailing (and potentially payment), in most areas we still do not see a clear winner.
  • So yes, good timing with abundant opportunities over the next two years (you will be too late otherwise).

6 – Local X factor

  • Local understanding and international best practices – blending the two effectively will give you a short cut. That said, it is not easy.
  • Also, sugar daddy can be an X factor, but it is also often a double edged sword.

7 – Structure of investment

  • There are many restrictions to foreign investment, especially in the areas of retail and financial services. Import of cosmetics and electronics can be tricky as well.
  • The good thing is that Indonesia has a lot of experienced lawyers who can help you navigate all the pitfalls and ambiguities. The challenge for many outside investors is to identify which lawyer to work with – those that stick to the letter of the law, those that stick to the spirit of the law and those that can navigate the grey areas.

8 – Readiness of infrastructure and regulation

  • It is getting better and better. Logistics is now much better than it was two years ago; and with the introduction of GoPay hopefully payment will be made easier (lower cost & faster settlement). Legal framework wise it is definitely easier than two years ago as well (just ask anyone who has been establishing PT PMA over the past few years).  
  • Of course all these still need to be improved and there are teething problems yet to be fully resolved. Nonetheless when all the infrastructure is already in place, opportunities are probably already gone.

9 – Perception of Chinese money and startups in Indonesia?

  • You ask 100 people on the street they will give you 51 answers. In general there is not much special prevalent sentiment or perception towards Chinese money and startups.
  • That said, as in any big country, Indonesia has a population that is deeply proud of their culture. Anyone operating in a foreign country obviously need to be well aware of (and show respect to) local culture, customs and tradition.
  • We are actually worried that during the gold rush, there might be some players who are insensitive, and as a result make life difficult for everyone else.  

10 – Government attitude towards foreign startups? Conglomerates?

  • Generally government is becoming more and more open towards foreign capital (and founders) competing in the Indonesian market. This can be clearly seen in the relaxation of rules governing ecommerce and fintech respectively over the last two years.
  • That said, it will be a process, maybe a (relatively) long one, with potential rollbacks. So while overall it is moving towards the right direction, do not expect it to be a perfectly smooth ride. Remember, Indonesian government’s primary interest is, rightly, that of Indonesia and its people.
  • The attitudes of conglomerates are much more nuanced and it highly depends on who is making decisions and who are the advisors surrounding the decision maker. We still big disparities but in general the conglomerates are more and more involved in internet opportunities.

11 – Pitfalls?

  • A lot in addition to the ones mentioned in bits and pieces above. You can talk to us to find out more 😉

12 – Round sizes?

  • Getting bigger and bigger 😉 Anyone still remember the days of US$2 million series B round?
We wish we had a (much larger) whiteboard.

We hope the event was useful for you – and good luck to all. 

Thanks for reading The Lowdown, insight and inside knowledge from the team at Momentum Works. If you’d like to get in touch with us about any issues discussed in our blog, please drop us an email at [email protected] and let us know how we can help.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].


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Ritwik oversees product at Momentum Works. Prior to joining the company, Ritwik gathered significant software product management experience at Apple, Easy Taxi @ Rocket Internet, and expertDB. He engages in any conversation that remotely involves product design and user experience, and constantly explores ideas concerning payment, AR and machine learning. In his free time, he watches political satire, reviews movies on his blog, and loves treating himself to some coffee and a bagel.