INDONESIA - Telecoms & IT
CEO, Edelman Indonesia
Before becoming the CEO of Edelman Indonesia in 2015, Raymond Siva led the Malaysia operations of Edelman for five years. He holds a degree in law from the University of London.
It is important for firms to understand in one sense the culture and, in another sense, Indonesia. There are 17,000 islands, with easily more than 200 ethnicities and languages. It is impossible to have a one-size-fits-all approach. However, if we focus on where the population is centered on, it is definitely Java, which has 60% of the population. There is an urban migration of about 5% a year and more people will move to Java. President Joko Widodo’s move to decentralize is great. It lends itself to talk about moving the administrative capital of Indonesia to central Java or even to Kalimantan. It then means we need to have an understanding of the red thread that cuts across all this various logistics. The cultural nuances are one. Indonesia is a collectivist society and people are consensus builders. They are more concerned about what is going on within Indonesia rather than outside. When a company comes to Indonesia, it has to take stock of these cultural nuances. Otherwise, it would be a challenge to understand how to do business here.. The power of communication is significant. Although we do not have a physical presence, our consultants have already gone to different parts of Indonesia to assist in various campaigns for our clients.
Right now, we are working on one of the largest IPOs in Indonesia for 2017. We see a sense that they are keen to expand. That is a sense of confidence now about local companies that can grow big. For example, there is GO-JEK, which has hubs in India and is building in San Francisco, or Traveloka, which recently received USD500 million in investment, including from Expedia. Therefore, there is sense of confidence that Indonesian companies can work on the global scale. In the new business e-commerce technology, there is a great scope for Indonesian companies to push out. Traditional companies may have some difficulties because they are mostly in the resources sector. This includes palm oil and coal, which does not really present an opportunity for international expansion. The area they can also play with is the FMCG area, where halal food is now getting a great deal of traction.
Because of the spread of the islands and where people are, logistics is quite expensive. It can be a challenge to open up retail stores. Getting goods from the port to all parts of Indonesia will be tough. The infrastructure is not quite there yet, although the country is building on it currently. The road, port, rail, and air cargo infrastructures could all be improved, and they are being improved. The e-commerce business is the best way to reach Indonesia. If we look at fintech, banks are doing e-banking purely because it is impossible to open up 2,000 branches. With e-commerce and the smartphone service system, if the traditional offline post office infrastructure is already there, then it makes more sense. More and more businesses realize that in order to capture the 260 million population and truly maximize the consumer spending power, it has to go online. That is simply because there are 260 million people. We now see Alibaba and Amazon coming in, because the market is so large and digitally savvy.
Things have changed; there are more than 13 media groups, some of which are fiercely independent. We now also see the rise of citizen journalism. News as we know it, in terms of traditional media such as broadcast, is doing fine because outside of Java or Jakarta the TV is still key for media. The newspaper reach, however, is dropping. Everyone in terms of the media landscape in Java has moved to convergence and consolidation towards digital or online news platforms. The other side of the fence is that the credibility of online platforms is not as high as the traditional platform. There is still a need for newspapers, though the reach is not big enough. The move toward a digital platform is needed. Facebook has about 90 million users here, and almost 80% are active users. Social messaging platforms are huge. That is really how news is spread and shared among people, which poses a challenge to traditional news outlets. However, how fast can they get the news out? In that sense as well, the online social space has got certain issues because of hoax news. People share a story before they have checked it. The traditional media still has a role to play in how social media is harnessed. Brands have a role to play by monitoring what is going on in conversations and reacting quickly. The media, as how we look at it, has transformed over the last two years. We do not even talk about online or offline anymore because the phone is where it happens. The only time someone probably picks up a newspaper is on a plane, a lounge, or hotel room. It will be social by design, digital first. We focus on the consumer end-to-end, instead of online or offline. We could start offline first, with an ad in a shopping complex, and then from there social media shares or something in the newspaper. Or we could start there first and then drive it through. Indonesia is one of the most rapidly digitalizing countries in the sense of consumer social media. That is the news for investors coming here: to get people on their phones. From the brands and reputations side, this is extremely important. On the brand-side, the best way to reach innovations is online. Data analysis and real-time insights will be the key differentiating factor for brands in Indonesia moving forward.
INDONESIA - Health & Education
President Director, Prodia Group
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