Another exciting year has passed. How is it going to impact the Indonesian tech scene in the next year?
As players in the Indonesian tech scene, we ended the year 2018 with a sense of relief for all the achievements that we have made this year.
As we prepare to welcome the new year, we also begin to formulate how 2019 is going to be better –and how the foundation that we have set up in 2018 can help us get there.
Moved by this belief, e27 has compiled a list of stories that has happened to Indonesian tech scene (and the market in general) that will affect the course of things in the year 2019.
Revisit this article in December 2019 to see what we have predicted correctly (and wrongly).
1. Go-Pay is available for offline merchants transaction
For many years, the woes that e-commerce and fintech industry players faced in Indonesia is the market’s reluctance to embrace cashless payment methods. But 2018 saw a chance when Indonesian ride-hailing unicorn Go-Jek announced that it is enabling transactions using its e-wallet feature Go-Pay in offline merchants, from bubble tea chain to supermarkets to street food stalls.
The move has led to the rising popularity of Go-Pay, followed by competitors OVO (which is now the official e-wallet feature of Tokopedia), Tcash (by state-owned mobile operator Telkomsel), and DANA (the result of a joint venture between EMTEK Group and Ant Financial).
Indonesia’s cashless revolution was also led by the government’s move to oblige all toll road users to pay using e-money cards released by major banks in the country.
How is it going to impact the market next year? Basically competitions between major players will be tougher. Customers might see promotional efforts that will lead to “price battle” between major players; they will also see more offline and online merchants including the existing e-wallet players as payment method options.
We will also see more foreign and local players introducing e-wallet services to the Indonesian market.
Also Read: 10 social impact startups in Southeast Asia that caught our attention in 2018
2. Government crackdown on illegal fintech services
On December 12, CNN Indonesia reported that the financial services authority has shut down 404 illegal fintech services, with the majority of these companies hailing from China.
The story was the latest update in the Indonesian government’s move to crackdown illegal fintech operations in the country, which are mostly offering peer-to-peer (P2P) lending services. Apart from harming customers’ data privacy, the potential harms that these companies have include money laundering, tax evasion, and terrorism financing.
Next year we will continue to see these moves by the Indonesian government as customer protection is one of the points that the government aim to pursue in the e-commerce roadmap.
We will also see the government making more strict requirements for financial services license, particularly in the lending sector. Customers will also be more aware of the risks of using online lending services; businesses will have to go the extra miles to convince potential customers that their products and services are safe to use.
3. Tokopedia raises another US$1.1 billion
Tokopedia ended 2018 with a high note as it confirmed a US$1.1 billion funding round led by SoftBank Vision Fund and Alibaba Group, which has been reported to push its valuation to US$7 billion.
Fellow Indonesian unicorn Go-Jek has also been reported to be in a fundraising spree.
Next year, we will definitely see the results of these fundraising efforts, which may come in the form of new products and features, or market expansions.
These funding rounds may also impact startup investment trend in general. In 2017, as the four unicorns –Go-Jek, Tokopedia, Traveloka, and Bukalapak– secured their massive funding rounds and unicorn status, the market saw a shift in investors’ attention to late-stage startup investment, leaving a gaping hole in early stage startup investment.
For 2019, the trend can go either way: Investors will continue focussing on late-stage investments, or reconsider early stage investments.
Also Read: The 10 most-read e27 Community articles of 2018
4. Go-Jek expands to Southeast Asia
After being laser-focussed on the Indonesian market for years, Go-Jek has finally begun its international expansion move by launching services in Vietnam (as Go-Viet), Thailand (as GET), and Singapore (as GOJEK).
This may not have that big of an impact for fellow unicorns such as Tokopedia and Bukalapak, which have been focussing heavily on local market.
But Go-Jek’s expansion move may create an impact for other early stage startups: it has the possibility to make them more attractive for investors due to their ability (and willingness) to expand beyond Indonesia and enter the regional market.
5. Indonesian general election on April 17
Indonesia is set to have a general election on April 17; an election which has been dubbed by local media such as The Jakarta Post as “haunted” by identity politics.
As with previous elections and transitional period in the nation’s history, there is always the possibility of security threats during elections. This kind of situation has been known to impact business and the economy in general, not excluding the tech industry.
Foreign investors might be a bit cautious about investing in the market leading up to election dates; Indonesia might also see several startup community event being rescheduled to adjust to the date.
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Image Credit: Elijah O’Donnell on Unsplash
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