Posts tagged internet
Google has plans to expand its operations in Indonesia with a potentially large investment. There is speculation the company will spend anywhere between US$100 million and $1 billion, with Indonesia’s Investment Coordinating Board (BKPM) optimistic the amount will be larger than Google has invested in other ASEAN nations.
Google’s chairman Eric Schmidt met this week with Indonesian Vice President Boediono and high level government ministers to set out the proposals. Google is eager to begin its Indonesian expansion as soon as possible, but is apparently still seeking clarification over online advertising regulations, security, and government involvement in the country’s obligatory local data centers.
Schmidt was in Bali this week as the keynote speaker at the ASEAN Regional Entrepreneur Summit 2011 and was quoted as being surprised by the amount of independent business activity in Indonesia. He said the country’s business environment was very similar to the USA in terms of interconnectivity, market homogeny and large population.
He also met with members of the Indonesian Association of Young Entrepreneurs, where he reportedly told them a reduction in government intervention would speed up Google’s plans to establish an Indonesian base.
Entrepreneurship is a hot topic in Indonesia this week after the Global Entrepreneurship Program Indonesia (GEPI) event in Bali. This article in the Christian Science Monitor adds strength to the BBC’s earlier claim that Indonesia is the best place in the world to be an entrepreneur in 2011.
It’s not Indonesia’s politics or established structures that created this environment, though. In fact, entrepreneurs there seem to thrive despite excessive regulation, poor access to finance and inadequate physical infrastructure. Instead it is Indonesia’s unique cultural environment: a young population, many tech-savvy and with overseas education, leading the way. Young entrepreneurs are looking at their country and trying to solve its problems piece by piece with the resources available.
Indonesia is embracing modern methods and techniques to interact. The country is already home to the world’s second largest Facebook population and its third-largest on Twitter. There’s a proportionately large number of mobile internet users and around 700 active tech start-ups, with a new one each week.
The United States is doing what it can to support the entrepreneurial wave in Muslim-majority countries, and it is Indonesia that has been quickest to make the most of it. The Global Entrepreneurship Program is a US State Department initiative funded in part by USAID and Indonesian partners, and last week’s GEPI event drew at least 11 major US-based angel investors.
source & article: Christian Science Monitor
Here’s a great video, made by a group of students at Singapore Management University (SMU), on why Indonesia is “the next big thing in digital media”. Put simply, Indonesia’s highly sociable culture and huge population are a perfect match for an internet where interactivity and crowdsourcing rule the day. Advertising and e-commerce revenues are set to soar with online traffic coming mainly from internet cafes and mobile devices, particularly the Blackberry. Mobile penetration is set to hit 97.8% by the end of this year.
Check out the video to see the stats and the group’s five main Indonesian digital media trends to follow:
Indonesia is already the world’s second largest country on Facebook (35.4 million users), the fourth largest on Twitter, and 33% of the country’s internet users are also bloggers. It is also home to major startups Koprol (social networking) and Tokopedia (online marketplace), with other up and comers already getting attention overseas.
source & details: SMU wiki
Google this week opened a new office in Kuala Lumpur, saying Malaysia’s “highly skilled workforce, multicultural diversity and business friendly environment” were major factors in deciding to locate its second Southeast Asian office there. Its only other physical presence in the region is in Singapore, which opened together with a South Korean location in 2007.
The move is a sign of confidence in Southeast Asia’s growing internet economy and demand for localized online services, like Google’s AdSense and StreetView. Malaysia currently has 17 million total internet users and 55.6% household broadband penetration.
Google hasn’t said exactly how much it will invest in Malaysia and some have played down the announcement, but the company says the KL office is a first step to exploring further opportunities with its partners in Malaysia, which have included the Ministry of International Trade and Industry. The company wants to focus on consumers and providing more affordable services to small/mid-sized businesses (SMBs), who can use the services to increase access international markets.
Malaysia’s Packet One Networks Sdn Bhd (P1), who teamed up with South Korea’s SK Telecom (SKT) in June 2010, plans to increase broadband and 4G wireless internet coverage and make Malaysia a regional telecommunications hub.
P1 will invest RM200 million (US$65.6 million) more this year to build capacity and enhance its services. It currently has 46% broadband coverage in West Malaysia and plans to boost that to 52%. SKT, who purchased a 25.8% share of P1 for US$100 million, has helped the company with an operations efficiency program that saw them build a 4G subscriber base of 280,000 customers. Their target is to make 4G available to 65% of the Malaysian population by 2012.
P1′s largest stakeholder remains Green Packet, and Intel also invested RM50 million ($16.4 million) to help set up a nationwide WiMax network. The ASEAN region currently has only 35% broadband penetration, representing a huge opportunity for service providers.
Singapore-Malaysia roaming charges to fall
In good news for cross-border customers, regulators Singapore and Malaysia have reached an agreement that will hopefully see mobile phone roaming charges drop 30% for voice calls and 50% for text messages. The governments will present their plan to local providers such as Singapore’s SingTel, M1 and StarHub, with a view to improving relations and realizing the economic benefits of increased movement and communications between the two countries.
source & article: Bernama
The Economist takes a look at the untapped potential of internet usage in Indonesia, where fewer than 20% of the 230 million population are online and most access is via mobile devices. Online business models heavy with advertising revenue and e-commerce solutions, common in the West, are less effective in a country where many do not have credit cards or even bank accounts.
Indonesia does have several factors in its favor, though: its population has embraced social networking with great enthusiasm, building Facebook’s largest user base outside the USA (despite having no local office) and producing a home-grown social/check-in network Koprol, recently acquired by Yahoo!. Mobile devices are dirt cheap thanks to Chinese manufacturers and their $30-40 devices, and Indonesian network access is so affordable it’s often preferred by Indonesian expats in other countries over local providers.
Online services are looking for inventive alternatives for smaller transactions, such as selling credits and e-currencies for use exclusively within the network, or arranging barter trades. Sites like Mig33 and Indomog have set up their own social/commerce ecosystems for their communities. The article also wonders if Indonesians’ special willingness to socialize online might make it an attractive test market for other products and services looking to move into Asia, creating an interesting potential for new ideas.
source & article: The Economist
Japanese online mega-mall Rakuten has set up in Indonesia with a temporary site and invitations to local vendors to join their global e-commerce network.
Rakuten Belanja Online, which expects to be doing business by ‘sometime in 2011′, is a joint venture between Rakuten and PT Global Mediacom Tbk. the company is counting on a projected boom in Indonesian online activity for its success, with user numbers expected to grow from the current 33 million to over 100 million by 2015.
Rakuten, rather than being a single online retailer like Amazon, brings together thousands of independent and other stores in one place and allows customers to shop from a central location. It has over 64 million users in Japan alone and 35,000 merchants offering every kind of retail good. The company has made no secret of its globalization plans, with its recent acquisition of Buy.com in the US and a partnership with Baidu in China, plus a corporate English language use policy even in its Japanese HQ. The Indonesian operation plans to offer goods from local sellers at first, before becoming a full member of Rakuten’s international network.
source & article: e27
The Star ran this story on e-commerce in Malaysia, which has gathered pace recently as more retailers start selling their products online and a larger number of people have access to the internet. It seems Malaysian customers are following the same trends recorded everywhere else: tentative at first, but becoming more comfortable as they appreciate the speed and convenience of remote shopping.
Market researcher IDC Malaysia expects the total online business-to-consumer market, which includes sales transactions for goods and services as well as bill payments, to reach RM15.3 billion (US$4.2 billion) this year. Travel items and books seem to be the most popular purchases, with IDC’s research showing 82% and 69% of Malaysian internet users having purchased something from these two categories.
The Nielsen Company produced slightly more conservative figures, saying 55% of Malaysian internet users have purchased airline tickets online, 41% tour/holiday reservations and 22% computer hardware. 21% bought books and 18% tickets to concerts and events.
Sites like eBay and S-emart.com, which allow people to sell products online without needing to set up their own site or payment system, are also bringing good returns for sellers.
Malaysian online sellers face the same challenges as those in other countries, with customers who still like to see and hold products before buying, and who have the same concerns about transaction security. The younger generation, however, is more accustomed to life online and e-commerce figures will rise as they grow older and wealthier.
source & article: The Star
Internet behemoth Yahoo! has its eyes on Indonesia’s growing market. Acknowledged as Indonesia’s number one email provider, it recently acquired the popular Indonesian social network Koprol and will expand its youth-oriented services focusing on news and entertainment.
Yahoo’s most recent figures showed 26% growth year on year in the Asia-Pacific region, faster than its other world markets. Indonesia, it said, had a highly-sociable and mobile market well suited to its new offerings.
Indonesia’s younger population and preference for mobile internet access might be the boom Yahoo! is looking for. The company has, in recent times, been labeled by some in the media as an also-ran in the global internet game as Google continues to dominate and expand into new areas. Indonesia at present has relatively low percentage internet usage (15%, or 33 million users) compared to its neighbors in Southeast Asia. Yahoo! sees these seeming disadvantages as a golden opportunity, saying Indonesia’s youth, a wave of entrepreneurial activity and availability of new technologies will leverage both into positions of strength in future. Despite the lower overall figure, Indonesia actually has Asia’s highest rate of internet growth: usage increased by 1400% in the past 10 years.
source & article: The Jakarta Globe
It’s good to see BRICs becoming BRIICs more often these days: according to a Boston Consulting Group (BCG) report, internet users in Brazil, Russia, India, Indonesia and China will reach 1.2 billion by 2015. That’s double today’s number and three times the projected total number of users in the USA and Japan.
Online advertising, entertainment content, e-commerce and telecommunications companies should appreciate this news. Countries with strong economies and low internet penetration rates should experience fastest growth, and the ‘BRIICs’ markets all fall into this category.
BCG included Indonesia in their report thanks to its large population and greater proportion of mobile internet users (66% more than India/China). Indonesia’s mobile penetration is expected to reach 100% of the population by 2015, meaning many users will have more than one account and wireless communications will expand into the largely untapped rural market.
source & article: Bloomberg via the Jakarta Globe