In episode 39 of the Impulso Podcast, we invited Ryan Wei, current Board Director and CBO of Boga Group, Indonesia’s preeminent F&B group as well as Venture Partner at Bali Investment Club. Ryan has undergone a significant journey, transitioning from roles as an investor, serial entrepreneur, and founder to his current position, where he draws on his experience in investments, technology, and consumer F&B.
In this episode, we dive deeper into the emerging market of Indonesia as Ryan shares his insights from being on the ground. What makes Indonesia an attractive but challenging market?
We include some practical advice on how to navigate expansion in Indonesia. We’re talking about the common mistakes companies often make when setting up shop in Indonesia and, more importantly, how to avoid them.
As we wrap up, we shift our focus to the exciting part – where the opportunities lie. Ryan maps out areas that have potential for growth.
The episode is available on Podbean and Youtube.
Hey, everyone. Welcome back to the Impulso Podcast today. We have Jianggan and guest, Ryan. Ryan, how about you give us a short introduction about yourself.
So thank you. Thank you for having me on to. And Ryan Wei here. I’m currently on the board of BOGA group, which is one of the bigger names in the F&B, Indonesia, helping out the owner to build out the group bigger and better. That includes from creating new business on top of the platform and also helping to transform the company and turbocharged from within. Outside of it, I’m also a venture partner at impact focused and Bali Investment Club. Being a serial entrepreneur myself, through my past journey to date, was more at the cross section of investment technology and consumer FMB. Having had the professional career before, that was in private equity investing for about a decade with large cap European funds and buying out consumer retail companies from Europe to Asia. Then I embarked on the journey, the founder journey myself, first time that was since about six years ago, always been building out a consumer facing businesses. And within also coming to the word of f&b also had a bit of a different flavors, from doing buyout deals and growth capital investments back in PE, to running country expansion across Asia Pacific, for a large global QSR giants. And until now building out to national champion brands in the multi category setting within Indonesia. So I think that’s more like kind of Pathlight in a nutshell, always a recurring common theme, trying to infuse a bit of technology and digital into building enduring, accessible consumer brands in the FMB space, by the large scale, and also with a dash of capital markets and know how and perspective. So yeah, nice. Thank you for thank you for the opportunity. I’d love to look forward to the discussion.
Yeah. Yeah, I think it’s interesting, what you just just just described and your experience seems to cut through like different aspects of building business, right? I mean, from four different points of view. And now you’re largely a viewer. So we have built things Indonesia before, we know that it’s actually quite challenging to build things from scratch, or even to reform some of the existing businesses naturally, because it’s a large market, so things are naturally challenging. And, and also you have some experience, like global regional in Europe, in China, etc, in Canada. And what what attracted you to to Indonesia?
Certainly, still can remember, well, that was about four years ago, I hopped on a one way flight from London coming down to Jakarta, bringing a young family. I think that’s a route now many travelers, but I never looked back. I think why is it’s a bit of a confluence of factors for oneness. I’ve always had this fascination with emerging markets. I think that kind of got instilled in me darky, my formative years back in college, even I think the book, The World is Flat, the first came out by Thomas Friedman, that was a defining moment. And that also has kind of shaped my career and life track spending about seven countries, I think, over the last 20 years or so, mostly in the cross border capacity. So that’s one. And also, as I see it, places like Singapore, that is more of a land of professionals. I think the same can be said for Shanghai, Hong Kong, London, New York, Zurich, as far as I remembered. But Indonesia here is a place where like, say for one, professional gold collar top paying jobs, that’s hard to come by, if any, but this is in fact the true dream lands for intrapreneurs. So I think suits our lens as a professional investor turned emerging market intrapreneur and then that endo becomes such a no brainer to me, coming down here. Last I’ll say it’s also maybe it’s some side factor to my better half wife is Indonesian, even though we were going to living happily abroad, but with my eyes and heart set on this land. So I knew that this moved to Indonesia pursuing my entrepreneurial dream. If I hadn’t taken it, I would have probably regret it for life. And I tried to leave like just live life with no regrets so that I knew like that it was a move I had to make.
So can I say that you prefer half your family is the reason why you didn’t go to places like Brazil, Turkey, Nigeria, but you said to Indonesia?
Yes, indeed. I wanted to be at an emerging marketplace, building out consumer businesses and then this specific choice, which is why I left places like Europe UK, US, Canada and China Singapore for that matter behind but yeah, why specifically Indonesia? I felt that yes, I’m already have foot in the door. If I didn’t do it, I would have regretted it for life. Another one that
You had this opportunity was interesting a few years ago when I was. So when I was working for Rocket Internet, we had a number of businesses. And at that time, we were trying to hire people to lead businesses and lots of people that we ended up interviewing with, they wanted to be in Indonesia. They said, Okay, I’ve read World Bank reports is exciting, so many people and the consumption power is growing. And we do have the so called middle class, etcetera, etcetera. So they all got very excited. Fast forward seven, eight years. I think half of them are still there. But ask them how they’re already left apps. I think I’ve spoken with everyone with left. And they all share the same sentiment says that it’s exciting. But after three to four years, it’s, I’m tired, because the market is challenging. There are lots of things that requires lots of patients. There are lots of things that you can quantify. There’s also things that you didn’t need to navigate, you need to continuously navigate. So that heartless people out. And how do you see this? I’m sure that over the last few years, Indonesia, you have operated I mean, different groups, taking different roles, and you have seen your fair share of the challenges.
Mm, yes. In the challenges of bounce? Definitely, I think of all the different things that can torture. For one, there’s, I think here, I’ll probably point down to the the human factor here. Yeah, here, it’s a country where Labor’s about, but talents are not, I think, especially those really self driven with a greed intensity. That’s really far and few between here. Which, of course, if we can kind of expand on that religion, I think, have a big role to play. The society you can Zeitgeist, the operating philosophy people subscribe to in life. And that kind of dictates the way of thinking and way of life and the choices people make. But I think that’s kind of more beyond the scope here. But to me, doing any sort of kind of critical thinking, problem solving any complex creation type of work, which essentially does execution in a business building sense. That, in fact, is probably the biggest challenge, which is to be done with talents are human. So anything requiring kind of rigor in that, I do feel that often a lot, if left to be desired here. And that awkward rigor is more of a catch all phrase. And you’ve seen from speed, Cadence, quality, consistency, all of that the depth of thinking, and the comprehensiveness, so much of that, I think you probably have to calibrate the expectation, and the way and the approach in terms of day to day execution here.
I think, I think a lot of the issues that you mentioned, are related to talent issue. And I do remember that when the first entrepreneurs from Hong Kong, and we moved to invest in mainland China in 1980s, they also face the issue, right, this issue, right? I mean, I want to build a business, but I couldn’t find the people who are, who are smart enough work, who have the decent education. And, and, and, and it was, was just challenging for them to find people who can immediately get on onto the works. And I also noticed that I think there are lots of MNCs will be operating Indonesia for decades, and I’ve interacted with some senior managers of MNCs in nature, they are very smart people. They’re very smart people. But they also tell you that okay, we are operating in this market, we understand the challenges, we understand the nuances here. So that’s why I mean that lots of times we can’t, I mean, even though we were educated in us in Australia, we need a different kinds of modus operandi to operate effectively in this market. Do you see that as, as matter of the stage of the market? Or is that a matter of justice is something inherent and a fundamental part of cultural expectations?
I think, live from my standpoint, there is something quite structurally fundamental there, right? Pointing to the way men generally write the population, how people read how people go about life, right? I think for one, I will say that also Jakarta in a way for the for those living alongside and in no way that represent Indonesia, part of Jakarta ftpd Pick, people might know that by no means even represent greater Jakarta. So and also the first layer of like the counterparts most people can get to interact with, right speaking fluent English, while educated from abroad, sharp and crisp, seemingly ambitious, too. And that is also by far from the real faces of Indonesia, whether it be in the workplace, or in the marketplace. Though, I think knowing that exactly like you pointed to that nuance, but essentially in Initial how much of that is really underneath the surface right below the tip of the iceberg. And that tip is what people see from abroad. And that tip is only the blind neighbor people get to touch on. So I think that is always good to keep in mind for it. So much of that is behind the scene, it underneath the surface, the true ground level reality that, especially if even something like underground feel quite that deep rooted the foundations of fabric of the society. And that, to me is only to be perceived once you’re on the ground, but not to be not visible from, from a short from outside.
Interesting. So, so that in a way makes navigating kind of fascinating, right, once you you work your way through to understand and, and to sort of to find aha moments that Okay, actually things function this way. And now I just have to figure out where to navigate through this. It’s interesting that you mentioned about the iceberg analogy, right? You see the tip of iceberg, iceberg, but there’s a lot underneath. And I think he goes on with lots of investors understanding about the Indonesian consumer market as well, right. I mean, people, I’m sure people have been reading like, you know, World Bank reports, been reports about, you know, the promising demographics, the middle class, organization, etc, etc. But there’s one question which I’ve debated with lots of people, and nobody seems to be able to give a clear answer is that what exactly is middle class? And? And how many of them like exactly there? And how fast is this cohort growing? So what’s your take? I mean, I mean, it doesn’t have to be like, concise, like numbers. But, but but what’s your sense for this?
Yes, indeed, I think middle class is, I think, especially middle up that I think it’s a very often used and abused word here, at least in the in the in the local. Within the brand owner, society, more people seem to cater to the middle up, like in fact, that’s actually touching the 1% of the population. In fact, to me, yes, yeah, you’re right. There’s a lot of theory, literature and statistics on time machine, macro GDP population and all that. I think the past I take from being on the ground over the past few years, coming to my year five, Indonesia soon. I will say, for one, this middle class is a population. Yes, I think officially, that’s about 20% of the market, which only comes down to, in this case, is a pool of anywhere 3040 50 million, market by population. Right. And those people still there, I think per capita probably account my point to somewhere to the tune of 10 million. It’s like a solid in Singapore dollars, maybe mostly level, whether it be spending or, or income. So in fact, the middle class definition is far below what the outside world tends to perceive. Those people are not in the inner in a large house is not well to do. I don’t even drive cars, it’s all on the motorbike, and to them. So I think in short, consumer business from what I see here, for one is there’s no really a magic number in terms of how you set the prices, right? Whether it be like 50k, lupia, 150, or 500k. There’s no right or wrong answer. But to me, it’s all about how that fits into like serving the segment that who your brand is really after. Like understanding there’s a multi layer of consequences of your design choice of who your target. What I mean by that is, I say the price points. Any price point can then correspond to a certain level of spending or income level of the demographics. But that side of the population as a segment, what is your effective reach of that? What is the capture rate, and that leads to a lobby, how the volume that feeds into your story, economics, your sales projection, and that determines really not only profitability, but your network scalability. Also, then geographically how dispersed you wanted to reach and pursue with a skater once you move above and beyond tier one, or getting into the holodeck cities and beyond. All the equations have to reset, the new capability has got to be rebuilt as well. It’s a whole new different ballgame there. And so the target market position and all of this full suite of consequences that has to be fully recognized and accounted for, I think, for anyone, as opposed to what is the side of the pool? What price realize that? No, there’s at least six or seven of these factors that come with this. One the full course of the meal, if you will, right. That’s the whole all the nuts and bolts are figured out and presented. If that feels something palatable enough, that is the goal that you continue. Nobody in business today is really kind of serving the 280 million Indonesian consumers here. No one is even hitting half of this. Even a quarter of it. I think it’s a stretch noodles, even though that’s a different play. Okay, go ahead. Yeah, consumer retail products is a bit of a different play internet reach, and retail FMCG distribution network, which also had a discount some years in that field over a decade, that’s a different play in the sense of f&b. Also, I think it has two broad category, food retail, CPG, FMCG, as well as food service, right, which is my restaurant cafe and such a lifestyle and venues. So that’s the other part I guess I’m referring to.
Sorry. So in that way, it’s actually quite difficult from a traditional, like companies like doing kind of planning, right? Because, because traditionally how company to do the planning or how how’s it entrepreneurs? Right, right, their pitch to investors? Is that, okay, here’s my target addressable market. And here’s, here’s how I’m going to approach it. Exactly, as we mentioned, right? market size, how do I set price? What differentiates my product? And now you’re saying that, okay, there are six or seven factors, and many of them might not exactly be quantitative meaning of that, I mean, might be quantitative, but you might not be able to find sufficient indicators for you to to make a proper proper decision. So at the end of the day for you to navigate and, and make something optimal, does that come with iterative approach? Or does it come with some, like, you know, I don’t know, sound understanding the market, which is, which is in your gut.
Not quite yet, even though I will say that, in fact that on the ground reality, that’s important. But still, to me, again, that is only to shape, let’s say, the version zero version, one of your design, right. And that is still something to be hypothesized, based on understanding on the ground now reading the report. But from that point on, that he still has to be tested out, launch test, either it rinse and repeat, or revise. And through that iterative tech building approach, which really is a playbook that many people what anyone pursues in either more of a brick and mortar, or at least in the consumer FMB play. I from what I noticed, and that’s over that series of hypothesizing testing, eventually leading to the best design choice, whether the pricing or the product was a feature was a taste for me. So yes, yes, there has to go through that series of steps to be done. But the initial version zero version one, one first came out of the lab into the real world, that has to be ideally paid on the basis of good enough understanding. But that knowing that there’s only a version of why you need the version five to be a winning design.
Which means that I mean, when it comes to things like foodservice, right, we know that the for instance, in China a lot for lots of people do it is that they started they had leverage the advertising capabilities of offer delivery platforms, startling concepts, and try not out on foot delivery, at least you can test the dimension of like know, what the customers would like to test or the customers would like to price with, they will become repeat customers before you started like no franchising out or building your own, like sort of full service FMB joints offline. In Indonesia, I guess that that meant is probably a little bit more difficult. Because because the regional food delivery platforms is not as prevalent as as what we see in China. So so that naturally means that when you test rings, your expectation speed, and how you allocate your resources will probably be different, right? I mean, you test offline concept, and you can’t just say that, Okay, tomorrow, I’m going to rebrand and do a facelift to my store, and do it like version 2.3. And keep doing that every week for years that that will require lots of costs.
Yes, indeed. Yeah.
So how would you how would you do that? Is that Is that how you sort of set the right expectations in terms of timeline? Or? Or I mean, how do you how to allocate the resources when you actually go to the kind of testing phase?
Yeah, I think the general point is, I think much of that testing, that way of working that playbook wasn’t much prevalent, for sure. Wasn’t all kind of well adopted here as well, to be honest, so that, in fact, four, on one hand, he does create that opportunity for whoever really can play that playbook super, while refined to come down here, following that similar strategy and tactics, and that I do believe that will lead to very different outcomes over time. The implementation of that process, yes, here is execution is harder. You know, there’s external circumstances making it a bit difficult to do that since the operator side to executing that with team having the right person who understand not only the language, but the way it will play that is also blends into the challenge. For many, maybe f&b, there are five things to do, right? And then that’ll be it, you can get the store up and running. Like, in fact, there are at least 15 Other things to consider of which nearly half of them we need to test. And the other half we can choose strategically to put aside until later. But I think the level of thinking and sophistication, it was, in fact, that will lead to a very different level of outcome. And then that going the extra mile deeper, more in depth wasn’t very much recognized here. And celebrated for sure. And adopted.
Interesting. So which, which basically, you mean that I mean, loss of the loss of the businesses in food services? I mean, they are doing well, but they could have been doing much better compared to where they are today. And, and because because those those No, no thinking or there was no like pressure, that people actually are leaving leaving money on the table in a way.
I would agree with that. assessment. And conclusion, in fact, I think the level of granularity the level of sophistication that people apply, is, in general is lacking, which could be also a function of really lack of relative lack of competition. In that, yes, lots of brands, the most of them is not just the quantity of brand and players out there by it’s a level of playing field, if you will, with the level of playbook that people are following. And yes, I think in short, yeah, there’s plenty of room to optimize. And most people are not really actually taking advantage of it. And to them also, that is a level of sophistication beyond the conventional thinking of maybe running a restaurant, or doing a cafe. And that, yes, people from the tech world know about hard. People from the investment side capital markets, having seen how the best billion dollar legendary companies got build, they might know that as well. So the different pages or the different playbooks, I feel from the investment community, from the tech founder community, much of that can in fact, actually be applied over in the consumer and we play here in Indonesia. But then those are the chapters in that playbook, that the traditional restaurant way of working Indonesia, that they need to touch on.
I think I think also people, when they talk about this that touched upon what happened in China, and we would assess other other emerging markets, of course, whether the challenges that we see in China currently is a different topic. But But China between 2011, and at least 2016, was amazing growth story, right? Lots of things happened. And I think since at least 2013 2014, we see the message talking about, okay, where do we find the next channel? Where do we find the next growth opportunity. But lots of factories in China, which which back then were fairly unique, right, I mean, almost unlimited funding from from, from the US dollars, source source sources. And, and really, really, I think, lots of infrastructure, which was abused by the government around the same time, which on this, on this show lots of growth opportunities, that, that whoever was willing, or able to capture would grow very fast. That also translates into, I think, what you have just mentioned about the competition, and people have seen that, okay, if you seize opportunity, you can grow very fast, if you miss opportunity, your competitor is far ahead of you. So that we have not seen really playing out at that kind of intensity anywhere else in this world. So and especially in emerging markets. So so. And of course, there’s also debate of whether that’s replicable or not, because, because we go to tech Indonesia, right? I mean, there was lots of invest investment, especially between 2017 to 2019. And again, 2021, when the funding was cheap, but levels you saw, I mean, compared to what China did, back in the early like, pretty tense is still quite small. And you have not seen a lot of success cases of you know, tech founders building successful companies IPO made lots of money and invest in other tech companies and people feeling like terribly inspired by them. And lots of people started competing in the same way and the what I think I think in Southeast Asia in general I Indonesia in particular, we see lots of aspiring entrepreneurs, but they don’t seem to have an anchor where where they can learn from where they can actually be be very inspired by in a very practical way, right? I mean, you can iterate your business etc, etc. But we do see that many of them are trying to figure out things themselves and without without, like not having a mountain bear that okay, I’m going to climb. I’m just trying to figure out things myself. So so we just see that as an issue which which caused what we have seen, I mean, whatever that’s been adopted in tech in China in the US or whatever, you don’t see that as much seeping into the the traditional business as well as in China, I think traditional pieces are deeply impacted by tech.
Now, while I hear you’re just kind of out this mountain trying analogy to me, I’m thinking of the ocean or the pool here. Yeah, yeah, there’s competition. And I think to say it’s not intense is not a prayer statement to but that just the pure number of being crowded, but that is purely in the shallow zone. In the deep water, though, I think there’s rarely anyone really swimming there. And that’s where the beauty is. But that requires a different level of sophistication, when you can go really so much underneath the surface knowing, to your point granularity of thinking, so every design choice and executing rigorously day in day out, testing, learning, data driven analytics, and then hypothesizing critical thinking and creative problem solving all of that, that is what you require, in to survive, and just to, like, sink into the deep waters all and that part is plenty. There’s nobody there. Why, in fact, if you look under the surface, that area that is as crowded as ever, and it’s constantly more jumping into us. So that’s how I view it in a way that here and understanding there’s a deep water down to tap into was the equipment was a technique was a process know how you will require before you can ever dream about venturing into that and how you can better equip yourself to eventually venture out once you get down there, you will realize nobody played like this way. And here is actually the whole the whole trip the whole ocean is the author, treasure trove. And all that.
I have spoken with the with the friends who have built businesses where the heart extensively, people from pythons. And I’ve also recently read the book, Elon Musk, by Walter Isaacson and look at the intensity that he has been driving things. So So So So what Elon Musk has been doing what Python has been doing in China, you don’t really have like that many other businesses which can do it at that level. But But the very fact of you have in these two giants or these two, like whatever mountains, whatever out there. And that impacts the whole ecosystem. And you will have others who are, I don’t know, maybe 1/3 as efficient at disguise. But they’re still like drastically more and more, more and more competitive compared to whatever that’s out there in the market. I’m just saying that, do you think it’s lack of personality? Who actually does think that way in a market which sort of inspires the others and create and breathe ecosystem talent? Who who later join other businesses to actually foster things?
Yes, I would handle agree for one is Yeah, that’s a role model. In a way. There are lots of examples I can think of where people truly building a heavily engineered submarine really going down. Although people scuba diving many people on the beach, and that is crowded. And to them, that is what study out there there is to tap into that we will come to the beach for as opposed to really deep diving into the bottom of the ocean and find the treasure. That’s how I see that and the play. Which Yes, but also there’s I see this more and more kind of coming on short, the onslaught of foreign brands, from China, from America from different places, Singapore, Malaysia, as well as more foreign players coming into the region, coming into the FMB space here, and then playing in a very different playbook diving into very different areas, different zones of the OSHA, and I think we need an overtime once they start to kind of really dig up the code and start to surface. It might make people realize, oh, there’s deeper part of this plate, I should dive into that, that will be into that. Because in one thing we are going to, there are people here over the span of three years students resolve in stores. And now this thing given up some cool work on that field, that is Mishary ice cream all around this country back then people were taking decades to build 100 stores. Now they can do solve it in years. And that is a fundamentally different playbook people are playing. The other business model could be different supply chain franchise life and sale that’s all different too. But still doesn’t matter of execution and the design and show the process power they hide behind there to manage this level of scale, right that is something traditional restaurant company never had to do while you are running 50 to 100 stores.
So So mean that once there’s like the catfish, for example, like nobody initiate rate has been efficiently, much more efficient coming to the market, and the sooner or later they will take the I don’t know, market share or whatever it wait for some existing players that kind of forces the existing players to, to be more competitive. I mean, it’s it’s almost like an what China did in 1980s. Right allows on the stronger foreign companies to come in. And initially, there was lots of debate about, okay, you’re gonna cure the domestic industry, but in any major domestic industry more competitive, because because the market large enough, right, I mean, and, and you do have enough smart people at the end of the day, what they need is just just the incentive, or just, I don’t know, a weap. Record, I mean, but but but but some kind of drive for them to actually move ahead much faster, and some kind of role model, they can look at learn at that and eventually overtake
you even just to be inspired by right. And that has realizing there’s a need, yes, that cache catfish effect, I think very much needed here. And only without overtime, at least there’s a need a recognition, something that would be fundamentally different the way they play, not just somebody working harder, with more money working crazier, it doesn’t quite produce exponential with different level of results 10x to 100x. So that needs to be reconstructed. Anything from scratch, I think that level of recognition and awakening that is needed. In our plans in the coffee, what happened.
And we measured by Michelle, right? I mean, in consumer f&b And obviously has been growing like quite aggressively Indonesia. On the other hand, we’ll see you see lots of foreign companies, especially tech companies in Asia, which are not really producing the results that they hoped, right? I mean, the economy challenges etc. So for outsiders to come into Indonesia, to make the assessment about markets and to actually operate in the markets. What are the typical mistakes that you see which are happening again, and again, from foreign companies that you have been observing, I mean, foreign companies, which try to try to sort of expand the Indonesian market.
I think for this, I will probably point to this, in general, there’s something lacking. And there’s something a bit of overkill. What I mean by that, I think, of course, the thing that’s lacking, we touched upon already, the lack of realization, recognition and appreciation, right, from the subtle nuances to even some great and truths on the ground, these people don’t come down here can see now. So that’s one, in this high context, high touch culture seems to need to be perceived on the ground level, only, then you can overtime, maybe dig more into it, to see what’s deep rooted behind that on the ground. So that’s one we touched upon already. What’s maybe what I mean by maybe overkill, there’s always seem to be an overdose of optimism. And that reflects in the estimation, from writing our business plan, investment valuation, and sometimes to expecting progress at a certain speed and efficiency. Usually, those are done on paper from all sides. And all expecting that maybe certain money after and your problem, that’s the kind of fear of getting things done, of getting people to move even. Which also we were saying, money is not the universal motivator here, if you’re dealing with a local workforce, whether it be white collar, blue collar, so lots of data and a distorted or even preconceived notion, and people have from all sides thinking will work. This is something I play with human nature, and your human beings should be incentivized like this, and your business, we can be executed like that. And that oftentimes need a refresher by the ground reality. And sometimes that’s more like a wake up call flashing in their head can only relate.
At the end of the day, would you? Would you perceive this as an issue of the expectations are patients of the leaders? Because at the end of the day, I mean, we’ll see lots of cases right? I mean, somebody was, say for this ecommerce giant in China was sent by the leader to head Indonesian business initially, they’re very optimistic. And after three months, they realized okay, the market is my take much longer and of course, the person gets the person gets a case a bit sort of dejected and of course, I mean, his pressure would mount and he would try to do more to actually prove that okay, this marker can actually work and that leads to more frustration and etcetera, etcetera. So, we have seen that in you many cases on the question is that, the question is that I mean with all these nuances and all this stuff, According to navigate through the market, if I’m international group and and my big big boss can’t be Indonesia all the time to feel the market, what do I do? Yeah, I think like 15 emerging markets we’re exploring. Yeah,
exactly. I’ll be fine. I think Indonesia as the as a country, or a culture or a market environment, or one, it’s not built for the outside world, nor should it naturally be that way. They think away from whether it be like a mosque, or a church or a temple, if you’re really determined to come in, it’s a place to enter with, with a level of respect. Knowing that here, since I gotta be opaque, will be nuanced, feel probably smell differently when you enter. The water here is muddy, it’s murky sometimes to see and you cannot see through from outside from ashore, you have to dip your toes to feel the water yourself first, before we make any sort of judgment decision, that’s number one. And, and also knowing that if just two were to jump in headfirst, straight to the pee pads, all by himself alone, now it’s almost a suicide move. From from my perspective, in fact, it’d be either drowning or you lose it live, or at a minimum, like you said to you will see progress, you lose momentum over time, you lose motivation. And I eventually also lead to a project in mice. So my name ensures is get local help, right? Whether you find a co pilots of your ship to sail in this water, or you find a diving instructor, who know this one, like back of his hands, they can swim along with you. Just like they say, in Bali, you just don’t let him diving along here or anywhere on this archipelago.
And it was at a local co pilots are which what are the possibilities? And of course, I deal a lot with large challenge businesses, and they tend to have impression that I need to work with one of the big families, right? I mean, you can name like, the top five. Yeah. Yeah, however, slice it, because they would have believed that this feminist would have the significant sort of sway. Also significant, honest and important market. And, and also, it’s relatively easy for them to, to, to understand these people, right, I mean, from background because they have worked with multiple people, and it’s easier for them to, to to just speak with the people that work with and to say that, okay, this group is not reliable in this way this group is has been very helpful in that way, etc, etc. But this is massive market, I believe that lots of people who can actually be more effective in certain aspects compared to some of the bigger groups, because speaker groups, they also have more more opportunities. I mean, whatever you see, as the top priority might not be their top priority, because the speaker opportunities. So, so what’s the right way to identify the right local, local co pilot, or you just have to dip your toe and talk, talk to many people and essentially, find that synergy. And, and, and sometimes make mistakes? Because I know that you have navigated through to different things. And sometimes I mean, things might not turn out to be ideal.
I will look at this thing. So one is yes, it’s very much about high context, high touch culture here, as trust. Understanding in we’re likely in a way to that all that matters to westerners awkward, sometimes they may be student that mean, they might not feel that to the same extent. But even like some people here within Asia, oriental Easterners, they understand to relationship building, trust building, all of that paves the way and through that process, you get to understand each other sides to what’s aspiration, what’s the motivation? Why do they want to do it, not about what to do what to do? Usually, it’s always the last piece before that, why we want to do it, how we do things together over time. All of that is ultimately a much higher order questions to answer than essentially in the ad what to do, how much of it? So that’s one, I would say, going through that process of really dating dating over time to find the perfect local partner to marry yourself into for decades to come. And that’s on trust building, I will say. And also, not only capital capital is one see, I would tend to think of also commitment, right. Going back to the point of why they want to do this. Of course they are a local Empire is one of the dragons out there. They are here for decades. They probably they are the kingmakers even talking about election that will not so for them running that empire. Why, why this little venture? Why do they want to do it? Didn’t want to do it today? What about next month, next quarter, and come next strategic planning next year, whatever next decade and next generation comes along. So figuring out that part of it too, coming down to commitment and alignment. That’s more so because any one of them is more than capable enough to drive this leadership, ethical pilots, even using 1% of their time, and resources, but to them is more about how serious they are in doing and why do they need? Are you confident with that answer yourself, before you put your whole ship into it, that seems to be a companion app, it’s up to you to decide, you know, what
that also leads to, to another issue, which is what people right, so I didn’t know if they will say that is 1% of the energy of the group. And naturally, if they said that, okay, we were willing to take it, there’ll be someone who is driving these, this someone might not be I mean, at operational level, this might not be a, I don’t know, the CEO of the family, or, or some of the sort of the core members of family, they have to assign someone to drive this, this person is usually some sort of trusted by them. But, but of course, this person would have his or her own nuances and his or her own agenda, and also power keys and the way of doing things. And other side, foreign companies trying to enter that by working with the with the, with the local co pilot, and and sometimes, I mean, it’s just like the recent Pictou shop case, by example, right? They would have, I don’t know, see, you have a tick tock, who would be able to, like, you know, help navigate these issues, but he’s ultimately not only another boss, and at the end of the day, so the decision making and also the way that he or she, she can mobilize the resources within a group will be different. So so so so so then you would have a situation where you have a promising joint venture, and no collaboration, whatever. And a per each side is run by a professional manager. So, so so so so, I mean, lots of things can go wrong, do it, do it, do it do it during this process. And we have seen, I think, a fair number of cases where things do go wrong because of misalignment of expectations, and and disagreements on a direction and disagreements on how to iterate this red. I mean, I’ve invested for six months, and the expectations or whatever the results are different from expectations. What should I do next? Or I’d run into some regulatory challenges and who should sort it out and exactly how this should be sorted out. So So that’s almost inherently challenging if if the owners of both parties do not actually come come down and build some personal trust to drive this?
Yeah, if so has it, we’ll see what happens for six months down the line into it. To me, that’s my advice at the outset, on both sides. One is building the trust as the foundation of fabric, stitching things together. And secondly, I think, really, from whoever I am there from the outside, try to plan the as much local element into this as possible, at least on the surface, if not the substance to and that is in fact, it is probably the safe, right and smart way to play. From what I can see, as you know, there is this protectionism and nationalism are rising up is government and that’s President likely to send to so yes, Indonesia is now beautiful, the outside world, nor should it be that way, saying, if you want to really get a piece of the pie here, I try to understand yourself, blending yourself. If anything I learned from my years and decades, like doing cross border, whether it be deals or business expansion is the big L word for localization, localize itself as much as you possibly can or to the extent is permissible. And then additional local element every single bit helps.
Interesting, and we have had like lots of discussions with different people about localization. And what I did realize is that for many people, when they think about organization, they naturally think about the product level localization, right? What I how I make my product format, more, yeah, more appealing to the local consumer content. Yes, but but but yeah, that’s how we wrote in a whole book that I did with Professor Sheehan right I mean, localize in terms of leadership in terms of people in terms of how your organization is structured because because just the product is not enough there as you said much deeper issues underneath my last one is a question but but the discussion point is where do we see like opportunities still lying ahead on the FnB? I’m not asking you to divulge like trade secrets for potential competitors, but, but at a macro level, and how do you see the opportunities and if you if to summarize in one word, I mean, how should people actually leverage this Trinity’s bit like no local, local big groups or or foreign companies, which which try to like, be part of the pie.
Yeah, offer one and I don’t hold any crystal ball. Nobody definitely the one holding the balance for the coming year. But I think in general, I would say, I’m a big believer that usually the greatest achievement ever in life history, usually, it’s not coming from people bucking the trend, but really from following the biggest waves and the tide and getting the mega trends, right. And of course, everything else has to has to be in place. So to me, I mean, Indonesia consumer play, yes. Rising up of consuming class in the order of your asking what is the magic number, but at least 60 to 100 million over the coming years and decades by the school, the Indonesia 2045. Getting into a $10 trillion economy carried on rising up 8x 10x 10 into an upper middle income country. I’m a buyer there. I’m a believer. Why, even though most of the Indonesians I talk to they think they have a level of skepticism. And out there to me, because I’ve taken the front row seats, watching that movie unfolds in with my own eyes in China, not once, but two times in half a lifetime. For that is 100x revolution in a way per capita level if the same sorts, which only goes back in the last two or three decades. So yes, the next two decades or window on to becoming a golden Indonesia attorney for the fire. I can see that’s possible because China had done it twice. I know has not good as a different bigger discussion. You had the fundamental elements in place I went out. But I think back to this point now. Yes. That level, blended with the demographics, dividend is still consumption needs, how that evolves, how that expands how they elevate in the consumer sense from buying today, more staples FMCG. Like I said, the discretionary aspirational spending to come. Eating now is more heavier, eating more even heavier. Over time, that becomes more fun to play something better, lighter, the fresher and healthier. He will come Not today. Not for Indonesia yet. But eventually that is something down the line, young singles lifestyle, as we now know, millennials, median median age, but then seeking follow through to the need for social and then marriage, young family, family formation and expansion of parental generational spending all is to come. So I think in short, is plenty of opportunities here within that elevating and expanding consumer lifestyle. But for one is that timeframe is not over the coming quarters and years is at the minimum years and decades. For whoever’s here determined to play the long game in a very local way. They’ve got to spend, they got to stand a chance, really it can be well positioned themselves over time, blending as much local element while localizing itself as you can. Yes, the strategy playbook. I’m sure we’ll see that it’s not as simple as copy paste, copy two, from America from China from anywhere Singapore, copy, paste, replicate a strategy play playbook doesn’t quite work. But history often repeats itself. Right that in a very strikingly similar way. So I think, yes, that to me, anyone here well positioned and prepare, localizing for the long haul. And there’s many, much to expect. And that is the mega trend here of Indonesia, that is very much intact.
So you are taking for a long term,
local level myself all the way down to the whole nine yards to the next generations raising my kids. All right, in Indonesia. I moved around seven times in the last two decades, and not going anywhere else in the coming decades.
Do where party to work? Not
all days of the week, particular location, I do not who I deal with, of course, is paying the level of respect entering the temple entering the mosque, either to this type. Of course.
Of course, of course. I do foresee that over the coming decades. But coming round come the years and we’ll have multiple discussions about I mean, how things evolve, and what are the what are the topics because believe it or not, I mean, it is one of the biggest markets with potential and especially in a consumer play and it’s for sure that this is where the biggest opportunities are right. Thank you very much for for the time this morning. I thoroughly enjoyed the discussion. Let’s let’s keep it up and all the best for your undertaking. I know that it’s not easy. I know that you’re dating for for another decades of challenges. But but but I think psychologically you are I think much at ease with all the challenges compared to a few years ago. I think I think the excitement has translated into I wouldn’t say maturity but sort of Have confidence, right?
Yes, yeah. Yes, it still gets to me in Jakarta traffic still working out, even though I’m getting years and years into it. But as I say, with the emerging markets, nothing is easy, but anything’s possible here. But the right to play, and that is a long haul the long game. But yeah, but thank you for having me on. It’s been fun. I really appreciate this and look forward to keeping up the conversation.
Yeah, all the best.
Thank you so much for joining us today. Thank you for this really interesting session. We’ll see each other next during this episode of the Impulso Podcast, see on capturing that