Indonesia, the largest economy in Southeast Asia, is a driving force within the region, accounting for 41 per cent of ASEAN’s population and 37 per cent of its economic output. Despite significant hurdles, including the 1997 Asian Financial Crisis, the impacts of COVID-19, and persistent structural challenges, we believe Indonesia’s economic growth remains firmly positive.

A key strength lies in its demographic profile—between 2030 and 2040, Indonesia’s productive-age population (15-65 years) is expected to peak at 198 million people, making up over 60 per cent of the total population.

Challenges to growth

Despite its vast potential, Indonesia faces several challenges that need to be addressed. These include corruption, regulatory inefficiencies, and policy barriers that hinder business growth and foreign investment.

Indonesia ranks 115th out of 180 countries on Transparency International’s Corruption Perception Index, highlighting the need for greater efforts to tackle corruption if the country is to attract more foreign investment. Furthermore, an Economist Intelligence Unit (EIU) study ranks Indonesia 58th out of 82 countries for its regulatory environment, underscoring the need for deeper structural reforms to unlock sustainable growth.

Investment and digital transformation: Catalysts for growth

Foreign Direct Investment (FDI) is vital to Indonesia’s success. In Q1 2024, FDI grew by 15.5 per cent, reaching IDR 204.4 trillion (US$13 billion), signalling strong investor interest. Indonesia aims to attract US$545.3 billion in investments by 2040, focusing on industries aligned with the global transition to net-zero emissions.

A major area of focus is the electric vehicle (EV) and green industries, with projected investments of US$30 billion in processed metals and US$45 billion in EV production by 2028.

Navigating challenges with digitalisation

One of Indonesia’s most significant opportunities lies in digitalisation. With over half of its population under 30, the country is ripe for a digital revolution. The government has laid out a clear vision to leverage technology, with policies that support infrastructure development and digital transformation.

The rise of Indonesian unicorns like Gojek and Tokopedia showcases the success of the tech sector, and Southeast Asia’s digital economy is expected to reach nearly US$1 trillion by 2030, with Indonesia poised to capture a significant share of this growth.

Also Read: Indonesia’s startup showcase 2024: The launchpad for Southeast Asia’s tech future

Digitalisation offers Indonesia a unique opportunity to bypass traditional economic constraints and unlock new avenues for growth. The EMAS 2045 initiative exemplifies the government’s long-term vision to position Indonesia as a global innovation hub, driving economic expansion beyond traditional industries.

Sustainable growth and the role of venture capital

Venture capital (VC) has become a key driver of innovation in Indonesia. As the country transitions to a digital and knowledge-based economy, VC investments have surged, particularly in the tech sector.

Approximately 46 per cent of Indonesia’s VC funding comes from foreign investors, primarily from developed markets like the US and Japan. This influx of capital will continue supporting the development of Indonesia’s growing tech ecosystem, fuelling start-ups and innovation-driven enterprises.

Conclusion: A bright future ahead

Despite the challenges, Indonesia’s growth prospects remain strong. With a focus on boosting investment, improving governance, and expanding its digital economy, we believe that Indonesia is well on its way to achieving its goal of becoming one of the world’s top 10 economies by 2045.

However, the road ahead will require sustained effort, the right leadership, and strategic reforms. If done well, Indonesia is set to emerge as a global economic powerhouse in the decades ahead.

To further explore Indonesia’s growth potential and connect with key players driving this transformation, join us at the InvestIdea Tech Showcase Day on November 29, 2024, in Singapore.

This event will spotlight innovative startups and investment opportunities within Indonesia’s dynamic tech ecosystem. Don’t miss the chance to be part of Indonesia’s journey toward sustainable growth. Sign up here. 

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LINE Thailand has launched a new scale-up programme to support high-potential startups in the country. LINE SCALE UP was officially announced at the LINE Thailand Developer Conference 2024.

The programme will provide startups with resources and tools from the messaging giant’s ecosystem, valued at up to 4 million Thai Baht (~US$115,000) per team.

The programme focuses on four key areas:

LINE Platform: Startups will receive credits to use the tech company’s user acquisition tools, including the LINE Official Account, LINE Ads, and LINE Messaging API. They will also receive up to 5 million free messages per month for a year.

Also Read: SCB 10X unveils Thailand’s first purpose-bound money initiative

LINE Networks: Startups will get access to the company’s customer and partner networks across Thailand. This will help them expand their reach and find new partnerships.

Consultation: LINE specialists will provide technical and business consultation to the startups. This will help them improve operational efficiency and meet specific business needs.

Partnership: Startups may have the opportunity to partner with LINE Thailand on new service developments. Select startups may also receive funding from LINE and its global affiliates.

The programme is open to Thai and international startups in the seed to Series A stages. To be eligible, startups must have existing products or services with a proven user base.

Interested startups can apply for the program at www.linescaleup.com or through the LINE Official Account: @line_scale_up.

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The goal of marketing is to make more money than you spend. That may seem like a simple statement, but it’s actually not so simple to achieve! There are many different models for how you can go about this.

In this article, I will go into detail about some of the most common GTM (go-to-market) models that startups use at each stage of their lifecycle and provide examples from my own experiences with startups and Fortune 500 companies alike.

Determining the market needs

The process of determining whether the needs of a target market can be addressed with a product and delivering that product to that group

In the early stage of a startup, you should be focused on finding product-market fit. This means that you need to find the right customers for your product, and those customers have to be willing to pay for it.

It’s not enough that people like your idea; they have to buy it from you at a price point where you can make a profit.

But don’t worry about pricing or profit now. This is called “scalable”. You need to be able to scale later for scaling today, not just put off profitability indefinitely (or worse yet, kill profitability altogether).

The startup journey of seed to series A

You may be wondering how to price your product. The simple answer is to ensure you’re covering your costs. But that doesn’t mean you need to price based solely on the cost of producing your product.

Pricing is also about positioning and differentiation in the market and ensuring that customers value your product enough to pay for it. And after all, if they don’t value what you’re selling them, then they won’t buy!

Your pricing strategy will depend on several factors, including:

• The number of customers who are willing to pay for what you offer (demand).
• Your cost structure (what it costs for each unit).

Focusing on building a great product

Don’t bother doing the things that will be a drag on your company when it grows. Focus instead on building a great product and finding people who love using it as much as you do!

In the early days of your startup, you should do things that don’t scale. This is because there’s no point in scaling something until it’s proven to work.

The focus is on customer acquisition and product market fit, not on sales and marketing or following best practices in those areas. You should still be able to acquire customers at a reasonable cost but maybe not as fast as later on when you’re at scale.

Also Read: Building a business isn’t Ximple. This is what my startup journey taught me

Customer success will also play an important role here since they will help train new hires who are coming in after each hiring cycle (new batch of employees). Customer retention is a high priority because most startups are acquired by larger companies when they get to that point where they need more funding than what their current cash flow can support

A company’s growth may be plotted on a pipeline graph

The pipeline model, which is designed to help you find a way to get customers, has several key components:

• A lead generation system
• A messaging system
• A sales process that your team can scale as it grows

The idea is that you have a steady stream of leads coming in from your marketing efforts and that you can convert those leads into paying customers. In this stage, your focus will be on closing deals more quickly and efficiently than ever before.

Suitable support services

After you’ve managed to get your series A, you have a lot of things on your mind. The business is still growing and evolving, so now’s the time to refine some aspects of your product or service.

You’re also building out key functions like customer support or training, which requires a lot of resources. As a result, it’s important that investors consider the team’s ability to deliver on these new responsibilities before they write another check.

There is no one go-to-market model, it changes at every stage of the startup process.

• You might have been taught that GTM models are set in stone, but they don’t have to be. As your company progresses through its lifecycle, the GTM model will change to match the needs of your business at that stage.
• This shift can be subtle or drastic depending on what phase of development you’re at. If you’re a startup with no audience, then getting people into your funnel is going to be more important than anything else. So we’d recommend using an acquisition-focused GTM model first before scaling up and investing more in things like Retention or Activation later on down the line.
• Once you’ve gotten some traction and customers are coming through your funnels (or just starting), using channels like ads and email marketing should become more effective as well: conversion rates increase when there’s already awareness about a product being available for purchase which means that getting people familiarised with what’s being offered before asking them for money becomes super important!

Final thoughts

It’s important to remember that when you do have a GTM strategy, it will need to evolve with your startup. You can’t expect the same tactic to work at different stages of your startup process, so keep an eye on changes in your business and make sure you stay ahead of them.

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This article was first published on September 2, 2022

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As of October 7, 2024, Temu, the online marketplace operated by Chinese e-commerce company PDD Holdings, is present in 82 countries and territories. It was anticipated that Temu would expand into Vietnam by late September, and by mid-October, the platform gained significant attention in Vietnam due to its marketing activities—similar to the strategies used in other market openings.

Looking at Indonesia, another country working to protect its domestic industry from ByteDance and PDD, I’ll explore the opportunities and challenges for the local market in light of Temu’s expansion into Vietnam.

Who is Temu?

With the backing of tech giant Tencent Holdings, PDD extended its domestic experience with Pinduoduo and embarked on a grand overseas push with Temu. Temu’s rapid global growth once made its owner, US-listed PDD, surpass Alibaba and JD.com, becoming China’s most valuable e-commerce company. 

Temu has grown in more than 80 countries since its establishment in September 2022. PDD Holding’s ecosystem has generated revenues totalling US$113,355 million, as indicated by the Q2 2024 report of Temu’s parent company. Temu is a formidable rival in the e-commerce sector, having effectively executed the three key growth drivers: price power, product range, and operational efficiency.

Temu’s aggressive footprint expansion is evident as the market opening playbook has been formulated. Over a year after its entry into the Southeast Asia market with launches in Malaysia and Philippines, Temu expanded to Thailand in July 2024, showing a renewed focus on the region. Temu’s expansion into Vietnam has been anticipated.

Vietnam: The 82nd country added to Temu’s market-entry playbook

Vietnam had the fastest YoY GMV growth rate in Southeast Asia e-commerce at 52.9 per cent, surpassing the Philippines as the third largest market in the region with US $13.8B GMV after Indonesia and Thailand, according to the Momentum Works report.

Vietnam’s proximity to China provides advantages in logistics. Many Chinese warehouses have been constructed at the border gate with Vietnam since the livestream phase driven by social commerce surge. 

Temu quietly entered Vietnam at the outset of October. Temu’s social marketing, promotions, and broad affiliate program gained prominence soon after. Prior to Vietnam, despite the low-key openings, Temu’s low prices and 90 per cent discounts, rapidly grabbed attention in the Philippines, Malaysia, and Thailand as well. What we have observed in Vietnam in recent days is already Temu’s market-entry formula.

Also Read: How to unlock the potential of conversational commerce in Asia Pacific

Let’s delve more into opportunities and challenges for Vietnam’s domestic market regarding Temu’s Vietnam expansion.

Vietnam is up against the wall in the fierce e-commerce race with regional giants.

Only when more Vietnamese enterprises are involved in Temu’s supply chain will there be benefits for the domestic economy. Otherwise, cash flow is leaving the country. Local consumers’ cash is spent on regional platforms, foreign suppliers, foreign shipping, and on other foreign middle-layer parties.

Domestic manufacturing businesses face pressure: pricing, and limited consumer spending, now exacerbated by price competition.

Local marketing stakeholders could leverage Temu’s marketing budget at this market-entering stage; however, the benefits are short-term and depend on the company’s strategy, which can be adjusted anytime to serve its objectives. These people are PDD; they possess the capacity to utilise money and perform extremely effectively and efficiently. 

The incumbent market’s business strategy is centred on ROI. Earlier this year, TikTok Shop reduced subsidies and increased commissions across several SEA countries, indicating a shift towards profitability trends. 

To seize the opportunity, strengthening Vietnam’s e commerce ecosystem is demanded

To leverage the economic benefits and maintain the country’s economic ecosystem, there is a need to enable more domestic players to participate in the supply chain, including brands, enablers, payment solutions, delivery services, packaging, aggregators, etc. This requires the capacity of domestic companies and the necessary opportunities & support of the country’s strategy for local businesses and startups.

While it improves the current stagnant employment situation by generating additional job opportunities, it is crucial to develop mid-to high-level personnel with experience for the long-term growth of the Vietnamese workforce.

The competition of Bytedance, PDD, SEA, and Alibaba drives the growth momentum of the e-commerce economy in Vietnam. To seize the opportunities outlined, it is crucial to have the country’s support for investment and financing for local businesses.

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Leveraging Silicon Valley Networks: Zed’s Path to Growth and the Long Term Impact to Philippine Ecosystem

As part of Echelon Philippines 2024, the fireside chat titled “Leveraging Silicon Valley Networks: Zed’s Path to Growth and the Long Term Impact to Philippine Ecosystem” examined how Zed has successfully navigated two ecosystems to drive innovation and growth. Moderated by Justin Chin, Head of Business Development at e27, the session featured Steve Abraham, Co-Founder of Zed and Danielle Cojuangco Abraham, Co-Founder and Co-CEO of Zed.

The discussion delved into Zed’s journey as a neobank focused on providing modern financial solutions for young professionals in the Philippines. Zed leverages Silicon Valley’s action-oriented culture and innovation-driven networks while adapting to the unique challenges of the Philippine market. The company’s offerings, including a MasterCard titanium credit card with no fees and a user-friendly app, cater to a tech-savvy demographic.

Also Read: Echelon Philippines 2024: Expanding Web3 applications for real-world challenges

Key themes included the importance of trust in co-founder relationships, the need for a problem-focused approach, and strategies for overcoming bureaucratic challenges. Zed emphasised aligning business models with customer success to build long-term impact.

Looking ahead, Zed plans to expand cardholder access and invest in talent development within the Philippine tech ecosystem, aiming to significantly increase credit card penetration while contributing to the region’s innovation landscape.

Watch the session video above to learn more about these insights and the strategies shaping the future of entrepreneurship.

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