Indonesia needs more policies that attract startups, investors: panellists
[JAKARTA] When it comes to investing in Indonesia, there are opportunities aplenty – especially for startups – in South-east Asia’s largest economy.
But before taking the plunge, investors need to spend time understanding the country’s unique characteristics and challenges, varied market sizes across cities, and how to work their way around existing infrastructure that is generally weak.
These were some points that were made during a panel discussion on the second and final day of the Tech In Asia Conference at the Ritz-Carlton Pacific Place hotel in Jakarta on Thursday (Oct 19).
The 40-minute session was moderated by Business Times correspondent Claudia Chong, who covers startups and technology news with the newspaper’s Garage team.
Susli Lie, a partner at Monk’s Hill Ventures, a venture-capital firm that invests in early-stage technology startups in South-east Asia, said the fundamental requirement for investing in Indonesia is a well-planned and properly executed strategy.
Lie, who is responsible for analysing and executing deals with portfolio companies, told the audience: “Before you start to apply your startup ideas, you have to first aim for a specific market. Analyse the problems and needs in that market and find the solutions for them.”
Indonesia, which has the fourth-largest population in the world and a growing middle class, has many opportunities for companies of all sizes that are looking to tap the country’s booming economy, said the panellists.
According to the latest available figures, Indonesia’s digital economy is projected to grow at a compound annual growth rate of 19 per cent to reach US$130 billion by 2025, and to around US$360 billion by 2030.
Lie also noted that, with the level of innovation and disruption in Indonesia today, the country’s policymakers have a critical role to play in attracting investment and fostering the growth of businesses.
“The regulatory policies should be supportive of startups, enabling them to experiment and innovate, while also safeguarding the consumer’s interests,” she said.
Sarah Wan, the general manager of Indonesia, Malaysia and Singapore at travel and leisure e-commerce platform Klook, pointed out that the biggest challenge in Indonesia is dealing with the uncertainty of government policies.
She said that the Hong Kong-based company, which began operating in Indonesia in 2017, has since then frequently come up against conflicting and overlapping laws and regulations, which has made it frustrating to do business and engage with its customers.
She cited the Bali government’s decision this year to ban foreign tourists from renting motorcycles on the resort island as an example. Such visitors are now only allowed to drive cars rented from travel agents.
This led to Klook having to work more closely with the local operators and the authorities in order to continue its operations in Bali, she said.
Wan added that businesses have to maintain close ties with the government to create a favourable business environment.
“Every market is going to give you a certain amount of regulatory changes or decisions, so it requires everyone to work together with the right stakeholders to influence some of these decisions,” she said.
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