Sunday, December 10, 2017

Why Chinese investors love to invest in Indonesia?

It's been no secret that a lot of investors from China are fond of infusing capital in Indonesia. A variety of fields, ranging from media, e-commerce to virtual reality to be areas that are enticing to do. This brings up the question, why the heck are they so actually interested in investing in Indonesia? What specials from Indonesia than other countries?

Four practitioners of Chinese investment reveal the reasons behind such interest. They are a founder of Convergence Ventures Adrian Li, co-founder of 01VC Ian Goh, Tony Qu (managing partner ATM Capital), and AppWorks Ventures Joseph Chan. What they said, let's take a look below.

POTENTIAL AND LACK OF INVESTMENT IN INDONESIA


Speaking of potential in Indonesia, of course we've already learned that the number of people of Indonesia is a very large potential market. But the advantages not only that. One of the interesting things in Indonesia is that over the past four to five years, data has shown anyone "player" that comes out as the winner. It means choosing what companies are worth investing in is not difficult thing.

The Government of Indonesia also continues to actively perform regulation follows the movement of the digital economy, especially on the side of fintech. Currently the Chinese investors indeed are expands into South East Asia, with the two sectors as the focus i.e. e-commerce as well as a digital wallet. The climate of Indonesia regulation tends to be friendly is in line with their vision.

According to them, the exuberance of fintech in this country are caused by two things, namely:
  • Poor condition of banking in Indonesia
  • The high interest in the youth towards the development of technology.
Bank transactions in Indonesia classified as ineffective, even slower. So among the young who are tech savvy, alternative services will be greeted with delight, whether in the realm of B2B, B2C or C2C.

But it does not mean that Indonesia had no barriers. The classical constraints that still we need to solve is the problem of infrastructure. But these barriers can also be viewed as oportunities. Chinese investors are interested in bringing the technology goes into Indonesia to improve the quality of the internet in here.

INDONESIA AND CHINA HAVE MANY SIMILARITIES


Chinese investors vied for the Southeast Asia region as target expansion, but Indonesia had a specific reason that makes it interesting. This is because Indonesia has similarities with China in ancient times. The condition of Indonesia in 2017 is similar to China in 2004, or by India in 2007.

What are the similarities?
  • The large number of startup sprung coupled entrepreneurial spirit.
  • Interest in e-commerce is very high.
  • Conditions of mobile technology-first.
  • The amount of capital that rotates the digital industry in Indonesia are still classified as small.

The same thing happened when China was at first, a condition where investors from Silicon Valley in droves come to bring in capital. As a result, any Chinese digital industry is growing very rapidly. Similarly, China now wants to be the "Silicon Valley investors of Indonesia".

RESPECT THE POWER OF LOCAL PLAYERS


Although been penetrating into Indonesia, foreign investors also understand that Indonesia had local players. Thus they feel Indonesia's local company will become the ruler here. Indonesia's digital giants still continues to grow, and in the future will be the giant in the Southeast Asian regional level.

The strength of a solid local is growing due to various factors. One is the knowledge of the terrain. Indonesia people better know what is wanted by Indonesia market. For example, here media and entertainment is very popular, but two things were not so big in America and China.

The problem of logistics is also not something that can be mastered in a short time. Giants of e-commerce in Indonesia is not only selling the goods. They also sell pipeline (workflow) logistics. This can only be obtained when we've "played" for a long time.

THEY WANT FROM INDONESIA


When asked about what is the most important sector is done in Indonesia, these four startup investors give different answers. Adrian Li assumed that most important is grit aka steadiness. Being an entrepreneur is very heavy work, and we can not sent someone to work on this sector or that sector. We must obey the words of the heart, then from there looking for a founder market fit.

Ian Goh on the other hand consider that the mobility sector/logistics, fintech, as well as B2B is currently the hottest sector. He wanted these sectors more earnest in Indonesia. In addition, the startup takes passion and ability to form a great team. We should not be "lone ranger".

Meanwhile Joseph Chan argue just simply: just go online. Whatever you do, the most important you have to solve a real problem. Take advantage of the internet to create solutions, then investors will open the door to work together and change the market