This article was first published on September 2, 2022. There are several updates from these second-generation unicorns regarding their international expansion plan. For example, Kopi Kenangan has prepared to expand further to Singapore in 2023, as reported by various media.

When it comes to producing unicorn startups, Indonesia has done a phenomenal job. The market was first predicted to have three unicorns by 2020, but even in 2019, it was able to shock the world by having five unicorn companies –Gojek, Tokopedia, Traveloka, Bukalapak, and OVO. Fast forward to 2022, the country now has around 14 unicorns operating in the market, and it is expected to grow to 25 companies by 2025.

Even more astonishing is that nine of these companies secure their unicorn status at the height of the COVID-19 pandemic.

On the second day of NXC International Summit, held in Bali, Indonesia, on September 1, we got to see a panel discussion featuring five of these unicorns: Edward Tirtanata (Kopi Kenangan), Tessa Wijaya (Xendit), Kusumo Martanto (Blibli), George Hendrata (Tiket), and Robin Lo (J&T Express). Dubbed as the second-generation unicorns, in a session moderated by former Minister of Communications and Informatics Rudiantara, these companies explain their approach to success, in addition to the latest updates from their business.

There were some distinctive features that I noticed from these second-generation unicorns that set them apart from their predecessors. First, there seemed to be a wider variety of verticals they are operating in. If the first generation was dominated by e-commerce and fintech services, we could even see an F&B company among the second-generation unicorns.

But apart from that, there is something more outstanding about this new wave of unicorn companies: They seem to have a more robust international focus than their predecessors.

Also Read: Why HR tech will make Asia’s next unicorns

Beyond Indonesia

If we look at the list of first-generation unicorns, only two out of the five companies –Gojek and Traveloka– had an international presence by the time this article was written. It took Gojek years to finally expanded their business to neighbouring Southeast Asian countries when Traveloka’s international presence was a given, considering the travel and tourism industries that they are operating in.

From the F&B sector, Kopi Kenangan is currently planning its expansion to Malaysia in the final quarter of 2022 while Xendit has already entered the Philippines earlier this year. The company is also looking forward to entering new Southeast Asian markets soon. For Xendit, its international expansion was part of its effort to fulfil the demands of their customers

“The zero marketing concept that we implemented earlier in our operations can no longer work when we are expanding to a new market,” explains Tirtanata at the sidelines of NXC International Summit. “Having an established presence in Indonesia and having raised investments from the likes of Jay-Z and Serena Williams helped us to build rapport in the new market.”

As a logistics company, J&T Express has the strongest international presence, expanding even as far as China. “We were told that entering the Chinese market was an impossible feat,” said Lo.

Within the second-generation unicorns, Blibli is the only one that aims to remain laser-focused on the local market. Martanto told the press that the company intends to remain laser-focused on building and expanding its omnichannel platforms.

It had recently secured partnerships with leading supermarket chains and launched an integrated service that allows its customers to use its services through a single entry.

Also Read: Synergizing a corporate, a tech unicorn and startups with a corporate-backed accelerator programme

Behind the phenomenon

One might wonder what is behind this attitude shift among Indonesian unicorns, especially because these second-generation unicorns secure their status only about three to five years apart from their predecessors. One might say something must have happened within the span of three to five years to enable this change to happen.

It all comes down to a single factor: Indonesia securing its reputation as a promising and established market for tech companies.

Back in 2016, in an interview with e27, Tokopedia CEO William Tanuwijaya expressed the company’s plan to remain focused on tier-two and -three cities in Indonesia. This came out as no surprise, considering the infrastructure gap between provinces in Indonesia and the challenges it may provide to e-commerce companies that want to win the market on a national scale. There were also other factors, such as the high level of distrust against fintech services amongst customers.

But today, in 2020, especially after the pandemic, Indonesian customers are just as savvy as the other markets. The rise of GoPay’s popularity has made it possible for other fintech services to enter and win the market;

As tech companies become a more integral part of the lives of Indonesians, more and more investors are coming into the market. These investors also began to invest in various verticals, opening up even more opportunities for Indonesian startups in the global market.

For companies who are looking to expand internationally, Indonesia’s reputation as an established tech hub –with notable companies operating in the market– certainly helped with securing potential partners, investors, and customers.

In the end, it is all about timing. What the first-generation unicorns chose to do was undoubtedly the best for them. But today, the Indonesian market has evolved in such a way that it would be in vain for the unicorns not to give the international expansion a try.

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The article was first published on August 10, 2022.

The post For Indonesia’s 2nd generation unicorns, international expansion is the name of the game appeared first on e27.