E48 – The Impulso Podcast – Jon Russell and Aulia Masna on TikTok-GoTo deal

In Episode 48 of the Impulso Podcast, we engage in an unfiltered conversation with seasoned tech journalists, Jon Russell, and Aulia Masna, who have been observing the evolving Southeast Asia tech ecosystem over the past decade.

Join us as we unravel the events leading up to the ban of TikTok Shop in Indonesia and its recent partnership with GoTo. Although this partnership seemingly allows TikTok Shop Indonesia to resume its operations as usual, it’s crucial to note that Indonesia still maintains a regulation barring social media platforms from managing ecommerce transactions.

And, of course, the lingering question remains: What about the small businesses the government pledged to safeguard?

In this latest episode, we also discuss: 

• Our perspective on the TikTok-GoTo deal, and and its implications for GoTo;
• 2023 in the broader context of the Southeast Asia tech narrative over the past decade;
• The potential influence of the 2024 Indonesia elections on the tech sector and regional investments;
• TikTok’s expansion strategy, and the challenges of entering different markets

Listen to the full podcast here:

Also available on Apple podcast – here. 

Featured materials:

Winners and losers of the TikTok-GoTo deal, TheLowDown

E44: The winners and losers of the TikTok-GoTo deal, The Impulso Podcast

Tiktok shops suspension was supposed to to help small shop owners in Indonesia—its Tokopedia takeover won’t change a thing, Asia Tech review

Who is Temu, Momentum Works 

Temu has entered Southeast Asia, challenging Shopee, Lazada & TikTok Shop, TheLowDown

[AI Generated transcript]

Sabrina  00:00

Hey, everyone, and welcome back to another episode of The impulso podcast. So I’m Sabrina and today I’ll be hosting the episode together with John Gunn. And joining us today, we have Jon Russell and Aulia Masna. So since its your first time on the podcast, could you please introduce yourself to our listeners?

Jon 00:21

I guess I’m Jon. I used to be a tech journalist for about 10 years TechCrunch and they can these days. What am I doing is complicated. But one things I’m doing is a newsletter called Asia tech review. And I work with a bunch of other companies to

Aulia 00:42

Hey, I’m Aulia here. Yeah, hi. Like Jon, I used to be a tech journalist for about 10 years. I was with you, 27 and the social. And also, I was with Mac world for a while. These days. I’m mostly a communications consultant. And well, Jon asked me to join him at ATR. So here we are.

Sabrina  01:09

Thank you for joining us today. So on today’s episode, we’re going to discuss our thoughts on the Tiktok go to deal as well as how this reflects on the tech and digital economy in Southeast Asia in general. 

Okay, so before we begin our discussion, I’ll just set a little bit of context for the listeners who might not know about this. So recently, Indonesia’s largest tech platform, go to shop deal with TikTok shop. And under the deal, Tokopedia, which is the E commerce arm of goto will actually merge with TikTok shop Indonesia to create an enlarged entity. 

And with this enlarged entity, the shopping feature within the TikTok app is now owned and operated by this large entity, which means that the conversion still happens on the TikTok app. So of course, there are many interesting implications to not just go to and TikTok but the other players in the E commerce system as well like the merchants and competitors. And if you guys are interested, you can check out our article or podcasts on the winners and losers of the TikTok go to do which would be linked in the show notes below. 

And of course, Jon and Aulia you guys also published an article in Asia tech review. On TikTok shops, suspension was supposed to help small shop owners in Indonesia, its Tokopedia Take over wont change a thing. So given that you guys have been observing how things have been progressing on the ground, maybe you guys can share with us a little bit more about your thoughts on this situation.

Aulia 02:38

Okay, well, since, it’s happening in my backyard. I guess I should be the one talking about it. Yeah, so Tiktok shop has been around in the year for about a year? Well, it’s it’s been operational for for a while. I forgot when exactly the beginning started in 2021. It was I think we had the first TikTok shop in the world, if I’m not mistaken. And a lot of the existing players like Sharpie Tokopedia Bukalapak. I think they were I guess terrified, would be appropriate to probably a word to say that we’re quite terrified of this behemoth that’s coming from bytedance Right.

So in sometime in early sometime earlier this year, TikTok shop started to hire a bunch of influencers, they got them to try and sell stuff on their platform, right? To get more traction on TikTok ship going because it was already basically snowballing and a lot of the sellers on other platforms are losing out. So when when these when these influencers these are not you know, not just like Instagram influencers, these are like celebrities movie, you know, singers, actors, they they were selling stuff on TikTok shop and they were making a lot of money like hundreds of 1000s of dollars a month, right. And a lot of people when that happened, all these sellers on traditional markets or actual shops, they started complaining about losing they’re losing their customers and the voices kept growing louder and louder and it became it came to a point where these celebrities selling so much stuff on Tik Tok shop. Were compared to our other words seen as taking over the market from the traditional sellers. Right? And because these are, you know, small business owners, these are mom and pop shops. They got the attention, and they got the sympathy of the politician, and all the way to the President.

So they thought, Okay, we got to do something to stem this, you got to do something to help these small time sellers. So they quickly went into action got together and help so many cabinet meetings, they spoke to current ecommerce players, they spoke to a representative of the of the sellers. And they ultimately decided to block TikTok shop and TikTok in September to stop operating by I think it was early October, I forget the date. Exactly. I think it was the first week of October, when they were, they were totally shut down. So at the beginning, they thought it was a victory for the sellers. Because Oh, finally, the government’s doing something. But what’s actually happening is behind the scenes, a lot of a lot of lobbying all these bigger, bigger platforms or other other competitors to TikTok shop to figure out what can they do to benefit them instead? Right. So long story short, Tokopedia ended up being the winner if you can say that. Because between October and early December, TikTok, talk to all these players, they talk to Bukalapak, they talk to Tokopedia they talk to you, even shopping and everyone else, they wanted to know what they can do to keep Tiktok shop open or to reopen data shop in Indonesia. Because it’s I mean, TikTokshop is a global programme. They’re launching it, or they’ve already launched. In a lot of places around the world, the biggest launch in the US was also equally controversial, but for slightly different reasons. They are slow, they’re overtaking Amazon over in the US, right. So they’re not, you know, they’re not playing around these guys.

So we’re here, they spoke to all these, you know, all the other competitors, they wanted to know what they can do about it, what they can do to return data back to Indonesia, and we ended up with the you know, the take over. And that in itself, I guess it’s a win for Tiktok the win for Tokopedia because go to had been struggling to you know, to profitability, neither Tokopedia and go Jack the two, the two companies in undergo two were on the way to profitability in you know, in any form, nobody saw any practical for developer, either of them. And when when I guess when the opportunity came for go to to I guess, let go Tokopedia whether it was in full or in part, they took a chance before before they let go Tokopedia they already let go their detainment division, they used to have a company called Block app, which is a ticketing platform, they recently get locked out to its own company and they also let go their entire entertainment division that used to be under GoJek itself. So basically the good the good entertainment section was let go and given I guess they were given to look at to manage. So now lockout manages everything that GoJek entertainment and lifestyle used to used to handle as a separate company. And now they’ve also given us an Tokopedia while much of stockopedia Anywhere 35% of it. So the whole thing works out really well for the go to group which is really just go check right now. There’s nothing else underneath that. Right.

Jianggan  08:50

There is also this go to financial right, which I think you can close payment and a bunch of services. I don’t know how far people have to be Indonesia fear about it, but pretty my opinion and bank juggle has been doing exceptionally well. But by the payment part the rest? I don’t know. So sure. I mean, how’s the sentiment on the ground about this? The financial part of go to

Aulia 09:16

Yeah, so the financial part of go to. The gopay and unban Iago the two big financial arms of of good financial. The bank. I will say the bank as you know, it doesn’t have a very high profile. Not a lot of people seem to be jumping on the bandwagon bandwagon. But gopay is widely used right. It’s used but there are far more gopay users than they are bank, bank banking customers and They are tying gopay along with with Bernie Galgo in a lot of respects, so that’s sort of intertwine in a way. I mean, people still use go pay to pay for a lot of stuff, especially now that across Indonesia, it doesn’t matter what bank or what financial institution or what, what, what digital wallet you have, you can pay using the same QR code, they used to be separate. Basically, at every merchant, you would have multiple QR codes displayed. Now they only have one or two. Now that everything is in terms of I guess, in terms of digital payment, QR specifically, they’re all funnelled through one system, so it’s beneficial for go pay. People don’t need to jump off to different platforms to use that.

I guess what they what they compete on these days are promos, cashback and stuff like that. But no, for most people still. Yeah, people give us still enthusiastically use gopay. Right. So that’s not a problem for them. But and in fact, that’s probably the the only way for the entire group to be profitable. But they’re still I mean, currently, there’s still no way for, for the gadget group to be profitable in itself from from the right from food, the food, maybe, you know, food and delivery, they may see some, you know, some path but as a group, it’s almost impossible. There’s just too much cost associated with it. So by jettisoning all these, you know, non core businesses, it’s a way for good to, to, you know, eventually become profitable. But it’s not, I mean, right now, it’s not fully clear yet, but it’s, it’s what’s what’s clear is, it is a way to get there. But we don’t we still don’t know how long it’s going to take. And for tech, this is a win because they are now back. It’s business as usual for things like shopping in Indonesia now. Nothing changed from September.

Jianggan  12:01

So TikTok shop has comeback, right? I mean, people can already buy things on now. Yeah. So how does it work? Because because a lot of people that are reading the headlines, they know sort of what do is being struck and of course there’s lots of analysis going in saying that what are the pros and cons I think from business and from the investment point of view people get good I think by now pretty good idea about what a windows etc. But exactly how that’s going to be carried out is it being carried out is the is the shopping Packer pap back live again and how what kind of shape does it take? So this is probably something interesting.

Aulia 12:46

Okay, so right now, it’s exactly what it used to look like. There’s a shopping tab inside tic tock before it was just black and nothing orange. But it was all green because it’s drawn by Tokopedia. So when you open the shopping tab on TikTok, there’s a pop up that says TikTok shop operated by Tokopedia. And it’s all in green, because Tokopedia is colour is green. It’s got beautiful video. branding on it. People buy stuff they’re doing the same way they do on top of pedia but differences at this moment. You don’t have to you don’t have to link your taco video account to your tic tock account. You don’t have to. You can if you want but you don’t have to.

Jianggan  13:32

So expressively purposes is TikTokshop but with the skin of Tokopedia on it. You function exactly, pretty much.

Aulia 13:41

Exactly the same. And yeah, and there is way more life shopping. Or live shopping on the app than than ever before. Previously, for example, maybe maybe maybe before September before they were shut down. You see one every four or five or maybe one every 10 swipes now usually one every two or three you see a live shopping every two or three big I’m guessing because all the contracts that had to be suspended during detox shops, you know, shutdown. Now are they ramping that up? Right, all these so there’s there’s a few, I guess, like shopping agencies that provide these services for for the vendors for the merchants. Now they’re ramping up all the I guess. Leftover contract, I guess, and it’s just a flood of like shopping, you know, content on Tik Tok right now.

Jianggan  14:40

I think I think the first is double 12 Right. So obviously it’s a shopping festival. Yeah. And a second what I do know is that there are lots of lots of sellers MCs will prepare lots of inventory for the shopping festivals, and obviously they lost about two and a half month with which they couldn’t sell anything. All right. So Jon, where are you at?

Jon 15:08

in London Yeah.

Jianggan  15:10

Okay, sounds cold already. Do you use TikTok at all?

Jon 15:25

You think I’m not one of their target audience? I’m not right. So no, actually, my daughter does. And my son are both in the team. So I think I began to use it more because I think it’s becoming really becoming like a huge channel for like influencers and for emphasis social media. But yeah, I mean, I haven’t bought anything from TikTok Shop yet.

But I mean, to me this this deal is I mean, it says such a strange door to happen. Because I mean, this this year has been so been so quiet, right, there’s so few deals happening, there’s so few exits. And then there’s a huge deal comes that comes over. And I mean, from a very cynical point of view outside of Indonesia, obviously I don’t, I’m not living there. So it kind of looks like everyone’s won, right, the Indonesian government’s won, because, you know, they have the huge, the huge IPO that needs to be sort of happening. Hasn’t hasn’t gone so great, right, you know, the go to share price hasn’t really ever, ever, ever done well, that kind of narrative that they had when they when they launched it, which is, you know, these are the two biggest companies we’ve got in our country come together for a huge IPO that that that narrative hasn’t hasn’t worked, right. And if you’re going to think about, you know, what’s the new narrative that we can get that would that would be that, you’d probably say someone like, TikTok coming in and buying a piece of that, or that company is exactly what has has has taken place, right?

Jianggan  16:54

I, I kind of liked the way that this deal struck, right? Because I mean, they were still taking tickets local video name, so on a surface that I think go to giving up control Tokopedia, but the name leaves on and, of course, this is structured as I mean, at least on a surface a win for them, and they traded off a, as Aulia, you said, I mean, the jettisoned money losing asset for some dividends or revenue sharing and for NTT DATA that’s going to be managed by TikTok, which I think is quite capable. So. So overall, I think, I think it’s good.

One question for both of you. And obviously, you have been observing Southeast Asia tech for a long time. And as John just mentioned, this year has been quiet, right? I mean, so not many deals happening, and probably not many people are actually actually actively watching what’s happening in tech. If you if, if you look back in history and see how things have evolved to what we see today, I mean, of course, the large companies IPO stock price not doing well. And now there’s this new player coming in disrupting things, and that this new deal has been made. I don’t know. I mean, personally, how do you feel I mean, after being observed after having been observing the sector for like, more than a decade? Tough question. Loaded question.

Aulia 18:25

I guess, like Jon said, it’s been a very difficult year for Indonesia. It is, it’s been difficult, you know, in most places around the world. But also in Indonesia, because there’s, we’ve had a lot of layoffs, we had multiple rounds of layoffs, you had companies shutting down, and again, obviously, go to spinning off different parts of the companies. This was a deal that the government was, in a way, I guess, if they didn’t want to be actively, you know, seen as being involved in to close the year with something positive. And hopefully, doing something more positive next year after the election, because we were having our presidents we were having our general election and in February. So for the government to pull this off, months before the election, they want to they want to be seen as sort of a saviour for for the smaller players.

But as we noted in our article and also apparently the one of the biggest current Issue Current Affair magazines in the country. tiempo via just the other day released a very similar analysis. They also think that this deal isn’t, at least in its current form isn’t going to do anything to help the, you know, to help the small merchants unless they all jump off and they all jump to I’m to take Topshop to Tokopedia, they’re not gonna, they’re not gonna see any benefit out of it, the shops are still going to be empty, people are still not going to go to the commercial districts, it’s just going to be abandoned eventually.

But having said that, the government did say that, despite this deal, it is still violating the law. This bill is still, technically it’s still illegal, because TikTok is not supposed to. So they, when they shut down TikTok in September, they also passed a law that’s that may makes it a, you know, makes it an offence to run an E commerce platform inside a social media app, or vice versa. Right. So social media, and social commerce or social media and commerce in general, have to be completely separate. This deal hasn’t done that this deal only basically puts us back to the status quo. Right. But what they’re having acknowledged that they didn’t say that, because this deal will not actually close until February, they are giving the two companies that that amount of time to figure out what they can do to abide by the law. And this is basically a trial period, right? The trade minister said this is a trial period, we will see what what Tokopedia and Tiktok will do with regards to the law that they passed in September. Because Tokopedia and Tiktok shop can, I guess, advertise or promote all these all these items in the app, but the actual transaction cannot happen inside the app. It has to be bumped off to a separate app, presumably to copy that app itself. Right.

So I don’t know. We may still see. I mean, this is not the end of the story, obviously, we’ll have to see by February or March? What’s happening with with the structure, and how, you know how they’re going to respond to that. Because if this, if they have if they don’t change this, if they don’t spin it off, the government might come down on them and say, Okay, you haven’t actually shown any good faith with regards to the law. You have to you have to do something about it, you have to separate the two, basically, you have to separate Tokopedia from Tiktok. Shop, you can have that inside the app. So I don’t know.

Jon 22:35

Right? Yeah, it’s crazy. The idea of like, oh, we need to support, you know, MSMEs. But actually, now the fact that someone else is coming in and buying our, our, you know, big piece of our local champion is not doing well, we’ll just forget about that for a bit later that that’s embrace cine take, right, which is like, Oh, it’s okay, now that, you know, someone’s pumped, you know, a billion dollars, or whatever it is in business, and actually, they’re gonna give them a piece of the profit that they make. It seemed very opportunistic, and like audience said, like, essentially, the government has made this deal, you know, happened, right, because they hadn’t said anything, or, and they then focus on TikTok shot, but not the only company that’s doing this, right. They’re the biggest and the most, you know, the most the most popular, but they’re not the only one.

So it does, it does kind of reek of like, self interest here, right. Like the fact that someone’s coming in and, and pumping money into the struggling company means by you know, actually, that’s okay. But I don’t think that you can do anything to fix this. Like, I think it’s not just Indonesia, it’s any country, any city that had like a thriving offline kind of commercial part, right. So many comments have come in, and they just ended up beating them. Right. And I guess the biggest issue is always like, where are those goods coming from? And I think most of them come from China. Anyway, I think the offline goods that are being sold come from China anyway. But it’s just is there a way that you can protect those those those salaries? And so I guess the interesting part is probably the fact that I mean, even if you read the article that sorry, the the announcement that go to made, they mentioned MSMEs, so much, right. It’s crazy. Like they’re obviously, that’s the big focus is we’re trying to, you know, these offline sellers, we’re trying to appease them and help them to sell. But I just can’t just can’t see there’s anything you can do at this at this point. Have to fix that. Right. And not just in Indonesia, but any other country too.

Jianggan  24:35

I have a I have some thoughts on that, actually. So here’s my I mean, you mentioned what a cynical but yeah, it’s I would think that the talk I mean, of course, the transition from sort of the offline sort of the tangible brick and mortar businesses into E commerce is this is happening globally. And Depending on infrastructure, depending on the maturity of many things, our payment ecosystem, I mean consumer willingness, supply of goods, etc. In different countries, this happens at different speed, and will probably eventually reach a different sort of equilibrium mature maturity point.

And, and if you look at the last few years that Shopee and Tokopedia, they have sort of tapped into this, this waggon. And it has the coast has toppled a bit, posted the pandemic, but then keto shop printing and leveraging its 125 monthly active users and 70 million daily active users in Indonesia. And of course, that’s the insane amount of attention that people have and instrumentation that you can monetise, to sell people things. So very quickly. If you leave them to round things this way, I mean, lots of lots of people’s documentation will be online, and that’s converting much faster compared to the shopping and others could do. So obviously, from a government point of view, they’re concerned, right, if somebody who has so much power control so much people’s sort of time and attention, and at the same time that that control has been leveraged to do to alter the form of commerce in a particular country. So So that’s like a nuclear weapon having and and how you’re using it.

I do think that I don’t know at all correct me if I’m wrong, I think the government doesn’t have a parent problem about TikTok, per se, but, but probably before the ban, they didn’t have a proper communication channel with the console. So that’s why you mentioned that when when the bad happens to everyone, and they probably didn’t have that much communication with the different stakeholders and impression that before the ban was enacted, they will probably not be affected to the government at all.

Aulia 27:07

So before the ban Tiktok had actually been very active in this country, they have set up their own office. They are the office is set up as a representative representative offices of TikTok but not as a as an E commerce operator, right, because that’s a different licence. And in fact, a few months ago, Tiktok had just held a creative conference and also an economic conference. They divided so many people from from different parts of the world to from all over Asia. I think they said, I can’t remember if it was July or August, but I remember. They said they’re planning to invest about 10 to $15 billion into the company, so into into the country, right. And at that time, there was there were no signs of all I know that there was no confidence that they will be able to continue running talk show when everything I’m doing here. So with I guess with that, with that 10 to 15 billion. I don’t exactly remember how much they pledged to invest, but up to 10 $15 billion, that’s a lot of money. That’s a lot of money that none of the other ecommerce competitors or any other social media companies have pledged to spend in the country.

So when Tokopedia and TikTok got together, that basically continued, wasn’t only but it resumed that that commitment, because we love TikTok shop, it was very difficult for TikTok to maybe justify that that level of investment. Now that it is picking up. The government may have also considered that, hey, these guys told us that we’re they’re investing billions of dollars into the country. So if we stop them from from doing this, we may not see that investment. Right. So by basically letting Tokopedia go for below its actual market value. They’re thinking maybe they’re going to resume this investment, and it’s going to benefit a lot of people in the long term, but we don’t know who the people will, will benefit from this. Right. And yeah, like John said in the press release, they mentioned small businesses so many times, because it is the focus. It is what it is the main issue, which got them banned in the first place. But I’m thinking you know, it’s not impossible, but it kind of goes against the whole idea of having an online shop if they want if they end up spending money to help brick and mortar shop Alright, so candidates make sense. I mean, they can do that as a courtesy, I guess, in a symbolic way spending, maybe if you just spend a few million dollars, that’s, you know, that’s already a lot of money spent anyway. But it’s, it’s not a lot. When you consider, they’re going to spend billions of dollars in the country, when you consider that, you know, that level of investment commitment they announced a few months ago, helping the you know, the traditional vendors in a small way might go a long way in terms of getting, regaining the goodwill.

But in terms of communication with the government, I guess, that they had they had the that conference. The CEO has been here a few times. The the people who ran TikTok in this country. I know, I’ve met some of them, they used to work for the government, or they used either they used to work for the government, or they’ve used to deal with the government, for other, you know, in their previous roles. So it’s not that they didn’t have communication with the government they did. But I don’t know to what level and what sort of complication that they have, because these are not inexperienced people. These are people who have worked within the US government for a long time.

Jianggan  31:25

Do feel that so within pythons per se, right, TikTok and TikTok shop are actually different in a way that you can shop is ecommerce. And it’s, I’ve seen the internal reporting line. So so so so people are ticked off eventually doesn’t I mean, don’t reply to don’t report to show is the CEO of TikTok, but their report to somebody in Beijing and Guangzhou monetisation for buttons? So I do think that that probably is on the dynamics there, right. I mean, the people running TikTok, TikTok, and people run TikTok shop, they are a bit different. Read and the access is different is large organisation. And you mentioned you met a few people. I mean, there are lots of people working for UNICEF, probably few 1000 people. So so so so so I do think there are some organisational issues at play as well.

Aulia 32:16

Possibly, like you mentioned correctly, that they are different reporting. The people I’ve met, were the ones who are the ones who run TikTok, TikTok sharper, because I don’t what I don’t know, is where the TikTok shop actually already have government relations, or or were they relying on tic TOCs on government relations, people OPR to deal with a deal to deal with the Iraqi government. Because what happens with a lot of these companies is yeah, they may be different. They may be different entities legally, or as far as the corporate structure is concerned. But for the Indian government, they know that, well, what they care about is the people that they’ve spoken to for for a little while. And they will be meeting with same people. For them. TikTok sub is basically the same as TikTok, so they would meet the same people. But again, because they talk shop does have a different level of reporting, maybe in terms of operational stuff. There is no connection to the government that would have they would have gone through the main pictographs. So

Jianggan  33:29

soon as possible when the government thinks that, okay, TikTok sharp, you are doing too much too fast. And you’re doing things. I mean, maybe most of the things you do are okay, but there are things you do, which impacts the real economy impacts the society. Okay, now I’m going to talk to people in a tech talk. And they maybe they told me that Oh, I don’t want to talk shop governance left confused. So who do I talk to?

Aulia 33:53

Yeah, that definitely that could have happened.

Sabrina  33:58

I think this situation shows the complexity of, you know, expanding globally and expanding into countries like Southeast Asia where you need to manage a lot of different stakeholders in your expansion. And I think just now John mentioned that 2023 was a pretty slow year for tech or investments in general. Right. So I mean, we’re in the last the last week of 2023. So how do you guys see this trend moving forward into 2024? Do you think that it’s going to pick up or do you think it’s going to be slogans?

Aulia 34:31

TikTok is definitely going to do a lot of blowback. There’s going to be a lot of activity around TikTok TikTok shop. They’ve they’ve said so much already. But in terms of investments or or other, you know, movements or inefficient tech. I’m not sure because the focus next year will be the election and what people are going to do with the new capital city because By August next year, the capital city will have officially moved from Jakarta to the New City to Mr. Barra. in Kalimantan, there’s going to be a lot of focus over there. So if these companies want to do something big, or if they have plans to, you know, to make a lot of movements or activities and 24 I don’t politically it might be complicated. You know, because a lot of the government, government, staff, government workers, they will move to the new capital city, depending on which presidential candidate gets elected,

Jianggan  35:43

isn’t that obvious?

Aulia 35:48

You might say, people might think it’s obvious it’s, I don’t know, I, I’m not sure. I mean, put it this way. Right now, all the all the surveys are saying that promo is going to interest. But it’s hard to tell to be honest, because on the, from the first presidential debate, and this was the winner. And all the surveys were done before the debate. And we haven’t seen surveys after the debate, right. And frankly, I think it’s a lot more charismatic, he’s, he’s a lot more pragmatic as well. Meanwhile, the others are propos and ganja, they all tried to present themselves as your COVID 2.0. They were the one presented themselves as you know, people running, continuing your College legacy continuing its programmes.

But if Alice gets elected, there is there’s potentially a big move, we, the biggest thing that he’s trying to do is to cancel the capital change, to cancel the move the move, right? He does not want the capital to be moved from Jakarta. And if if that happened if he gets elected, and he somehow manages to overturn the law, that that moves the capital from Jakarta to Sentara. That’s a lot of movement. That’s a lot of, you know, unknown, I guess elements that are happening in the next few years.

Jianggan  37:26

I have a, I have a friend, Chinese, but he has been running a mining company in Malaysia for 15 years. And since last month, he said, A extended holiday until next two. I said, Why are you doing this? He said just wait it out? Because I really don’t know what will happen and who will be elected. And it’s probably not wise for me to do anything until I know for certain who will be the people in charge? And who would be and what what kind of policy direction you will be there. I can decide where I will invest my investment time resources and money. So because I know, a woman I don’t know. I mean, but looking at the the headlines, the news reports, and he said, I talked to every single member of staff of my, my company, and we hear something which he said, which is interesting. He said, I haven’t found anyone in my company, which is like few 1000 People who doesn’t support probable. So they interesting, they’re here. But he said it doesn’t mean that he will get elected and maybe spies. But what I’m saying is I don’t know. I don’t know how the large country with lots of different people.

Aulia 38:43

Yeah, yeah, exactly. That’s exactly what I’m saying. All the headlines, all the surveys don’t say we’re always going to win. But as your friend has, and I do as well. I’m not convinced about with any of these surveys, because there’s so many moving parts when different parts of the country, there are different kinds of people. So the election is happening in February. But if nobody passes 51% will go to a runoff in June. Yes. Right.

Jianggan  39:19

And taking a leave on to June. Yeah. What happens if the result is in February? He said I’ll catch up my holiday and go back to business.

Aulia 39:30

Yeah. So with three candidates, there’s unlikely to be a result in February. We will probably go into goes CRM runoff into and then the new government will be sworn in around August. i That’s why I don’t see a lot of people wanting to do a lot of stuff. They don’t think they want to do big, you know the movements

Jianggan  39:55

or election with more than one party is not something I’m entirely familiar with. But yeah,

Jon 40:02

But I mean, I think if we’re looking at what is going on in this region overall, right, and I think that you guys probably know better than us, right? Because you’ve, you’ve had a bunch of stories about what they’re up to. But, I mean, I don’t think they’re doing acquisitions. I think this is opportunistic, right. This is they kind of need TikTok shocked to be big in Indonesia. But it’s kind of like the example. Right, it’s been the blueprint market. The first one is so huge in this region. So I’m not sure they’re gonna do other other sort of deals.

But I think it’s a good time to be to be growing your business because they, like you said, there’s not much money, there’s plenty of layoffs, there’s people you can hire. Like, I think it’s it’s a good time for them to be to be here. I mean, I’d be amazed if there were any other deals that are worth doing. So I don’t think there’s anything that you can really buy, that they can’t, you know, build themselves, right. And as a as an organisation by dancers always building things. Right. But I mean, like, maybe there’s some other market where it similarly, like, there’s some some politics involved, and they sort of have to do something to appease a government. I mean, Vietnam might be the only other one perhaps, right? Where there’s ecommerce companies that are that are that have been there for some time that have positioned that maybe the government, as you know, sees what happened in Indonesia and thinks there’s, there’s an opportunity, but otherwise, I guess, they’re just gonna keep building and hiring and I mean, how many folks they have now in this in this region, you probably know right? 5000 10000?

Jianggan  41:33

probably much more than that. So I have this here, that is Singapore, they are expanding floors. So it’s, I mean, most big tech companies, they are the only company which is hiring. So I think these guys have been following the tech integration for so many years and now it has evolved to a stage where I think I think from from my point of view, so So TikTok is only meditate, which is hiring.

And of course, you have a bit of presence of Google bit of presence of meta and meta is probably very comfortable now because of Timo and, but but then and the regional companies, I think grab is in a core position. They have like Target. I mean, it’s might not be the most exciting thing that they do, but Okay, after this target, I’m hitting this target and this target I’m getting this target go to seems to be in disarray. But now they’ve managed to, as Aulia said, Jason, whilst the monitors the assets so that they can focus on others. Maybe they were I don’t know, sell, sell co chair to grab or, or maybe even

Jon 42:44

That could be a prediction right 

Jianggan  42:46

I stopped making predictions. Because first I realised that, obviously, I mean, we were the only ones in a region who make predictions and review predictions. And then that’s, I don’t know, and they didn’t they, I think after the pandemic, it became harder and harder to predict.

Aulia 43:07

Yeah, oh, I’m speaking of harder to predict. So Temu is one of the bigger players in E commerce right now. Right? They’ve launched in the US in Oceania. I mean, Australia, New Zealand, UK, whatever. So many other countries, but I don’t think they’ve launched here. I don’t know if they have launched in Southeast Asia. You know,

Jianggan  43:32

they started in the Philippines, in August and Malaysia, middle of September. I know that they internally, they had to build a team for Thailand, which is I think we’re joining us reliefs, but now he’s in court. So but but they have not been focused on this region, I think for a number of reasons. So the first is that this whole quarter is the Shopping Festival in North America and Europe. And today still are trying to figure out logistics for Europe, which was which could unlock a lot of growth for them. And of course, you guys know, right. The the basket size in Europe is probably going to be much, much bigger compared to Southeast Asia. John, you’re up? No, I think they are doing about 400,000 parcels a day to UK now, Timo? Yeah,

Jon 44:25

I haven’t seen the ads yet. But I mean, I know from like, friends of mine who hear that is very, very popular. Yeah. Which is insane. I think what you’re saying it makes a lot of sense, right? I mean, if you’re looking at regions like Southeast Asia is obviously big, and people spend, you know, crazy amount of time on that on their phone, but they’re not going to be buying as much or they’re going to be buying as many big ticket items. Right. So I was always curious, like what it was about this region that made you know, TikTok shop focus here first, and I think I guess it was a playbook right that they could build. Indonesia being a huge market where okay, there’s no Maybe not, it’s not that much in common with, you know, America or Europe, but maybe it’s a way that they could figure out how this stuff might work. Right?

Jianggan  45:08

I should have a theory, I think I think they knew that Southeast Asia is fragmented is hard and stuff. But that, firstly, they have lots of users in Southeast Asia. And a second, this is a market that the executives are relatively familiar with. And you do have, you do have lots of people who have upgraded in sort of Chinese affiliated or Chinese inspired ecommerce companies that they can poach or hire people from Sharpie people from Lazada, etc. I noticed that the same companies when I go to Brazil, when they try to hire people who have existing experience, actually, yeah, yeah. And another thing is that, of course, you know, the founder of Python spends a significant amount of time in Singapore, right. So it’s something that they’re familiar with.

But, but I think I think Kim will probably change the calculus, right? Because initially, everybody was like, trying to go to the US, but hesitated a bit, saying that US might be too difficult. Amazon’s too strong, then they, as it happened, right, we just went ahead and, and started being very aggressive anyways. And of course, that that publishes the calculus of other companies. I mean, the starshop now is having big focus in, in the US. And I do think that the fourth for the for the people running ecommerce for pythons, if they lose Indonesia, I don’t know they will get a good a hard time with their bosses. But if if they don’t mean the US market, they’ll probably lose their job. It’s a very competitive organisation anyway, so. So it’s something which continues to watch,

Aulia 46:45

as far as domestic companies are concerned, I don’t think that they are going to do anything that, like you said, they’re most likely going to just sit and wait for another year, we think we’re going all holding pattern, see what’s happening with the government? Where the policies are going. But I don’t know. I feel like maybe overseas. Companies might want to do something, or might maybe not make a big splash, but like, what a bit of seed? See what’s see what’s going on them, they might take a look.

Jianggan  47:29

I think I think also, Jon, when you’re in the UK, there’s one thing I mean, which you can probably find out in the next few weeks until us next year, which is, you know, you don’t take our soft launch to Indonesia and the UK at around the same time. And the English has been performing and has not been performing. But my theory is that back to what I said just now, right? They couldn’t find the people who actually sort of can work cooperatively with the organisation to actually properly tackle this market. And and of course, there’s some theory from analysts and market saying that Oh, is because people in the UK are not used to, like live commerce or video commerce, whatever. So so probably something. I mean, I don’t know if you find out through, like real people who talk to

Jon 48:12

Yeah, I think I said, Amazon here is so big. I mean, there is no competition. Right? I know us we were talking about you know, Amazon had this lead that was wasn’t possible to be right. But you also have other players online, right? The UK is really Amazon dominated and so many people don’t have Prime membership to write even even my my parents were I never would have thought that my mom would have Amazon Prime, but she does. Right. So that’s the kind of that’s kind of hard to beat, right? Yeah. And I can’t imagine my mom doing you know, being on Tik Tok, doing live live setting. So it’s kind of a bit a bit not really the kind of nature of folks here. Right. So I think it’s a much harder nut to crack.

I’d say the only thing I was gonna say is actually I think this, this whole thing of these companies coming in, whether it’s TikTok sharp, or like shin or teaming, I think one thing that’s good for the region is, is all the all the logistics guys that have been here for some time, that have, I mean, they’ve been interesting companies, but they haven’t really reached the kind of highs that they were trying to reach. I think this is good for them. Because these companies, they need partners off the bat, right. And, you know, we’ve seen like, floppy and Lazada, building their own kind of businesses to do that. They obviously still work with it with with a bunch of people too, but I think it’s great for these guys, because they really need extra business. And as far as I can see, like they don’t really get that right now. And they probably could be a bit better at what they do in some countries, too. So maybe that might push them a bit better a little bit. There’s a bunch of companies that are kind of stuck, where they raised a lot of a lot of a lot of money and they haven’t really got an exit right? And maybe the the numbers that they’re doing and so on so great. I’m not quite sure But yeah, having a bunch of more companies coming in needing to ship things fast is probably good for the good for their business too. Right.

Sabrina  50:09

So I think that concludes this episode. So I hope you guys enjoyed this episode and we’ll see you in 2024