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Indonesia Investments Report - June 2020 Edition: Indonesia's New Normal
6 July 2020 (closed)
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Berita Hari Ini Internet
The Internet has been one of the most revolutionary technologies in human history. It has made the world a much smaller place by revolutionizing communications. Internet has opened the doors to an enormous amount of information and data that are readily available by only a click or two (thereby completely changing the way people access and consume information).
On Friday (07/02) Indonesia Investments released the January 2020 edition of its monthly report. In this first edition of 2020 we zoom in on the digital economy of Indonesia.
Based on the latest survey of the Association of Internet Service Providers in Indonesia (APJII), the number of Internet users in Indonesia reached 171.17 million individuals at the start of 2019, or approximately 64.8 percent of the total Indonesian population. The survey, which involved ‘probability sampling’ and ‘multistage random sampling’, has an error margin of 1.28 percent.
Going digital through mobile devices is a big game in Indonesia, especially in the e-commerce industry. Among the developing countries, Indonesia is a growing digital market with a +100 million internet population and an average of 87 percent of mobile traffic, proving that Indonesia is a mobile-first country.
The value of the e-commerce market in Indonesia is estimated to have grown to the range of USD $55 - $65 billion by 2022. This estimate stems from a new report, titled The Digital Archipelago: How Online Commerce is Driving Indonesia's Economic Development, that was released by management consulting firm McKinsey earlier this month.
Indonesian ride-hailing company Go-Jek, one of the nation's unicorns, confirmed its plans to expand into other countries in the Southeast Asian region. Over the next couple of months the company will invest USD $500 million to start delivering its ride-hailing services in Vietnam, Thailand, Singapore and the Philippines. Earlier, Go-Jek had already expressed its intention to expand beyond the borders of Indonesia. This time, however, it has given more details about its plans.
It has been a while since we last reported on developments surrounding the Palapa Ring project, one of Indonesia's priority infrastructure projects in the 2016-2019 period. The Palapa Ring, which involves an undersea fiber-optic cable network that stretches across 13,000 kilometers as well as an onshore network of nearly 22,000 kilometers, will provide fast broadband Internet to Indonesians in both the urban and rural areas across the country. Once completed, all Indonesian districts (kabupaten) are connected through fiber-optic communication.
The local and thriving ride-hailing market in Southeast Asia is dominated by local startups. Foreign counterparts fail to gain significant market share. The latest proof is Uber Technologies Inc.'s decision to sell its operations and assets in the Southeast Asian region to Singapore-based technology company (but originally founded in Malaysia) Grab. Through this consolidation-move, Uber will obtain a 27.5 percent stake in the combined entity, while Uber's chief executive officer will join the board of Grab.
Based on Ookla's Speedtest Global Index, which ranks Internet speeds around the world, the global average mobile download speeds have grown 30.1 percent over the past year, while the mobile upload speed rose 38.9 percent over the same time. Meanwhile, the latest ranking (November 2017) also shows a 31.6 percent global speed growth for fixed broadband downloads along with a 25.9 percent increase for broadband upload speeds.
Rudiantara, Indonesian Minister of Communication and Information, targets to see the availability of 4G networks across all Indonesian cities and districts by the year 2019. That year the government's Palapa Ring project is planned to be completed. This project, involving an undersea fiber-optic cable network that stretches across 13,000 km and an onshore network of nearly 22,000 km, will provide fast broadband Internet to Indonesians in the urban and rural areas.
Artikel Terbaru Internet
Indonesia’s digital economy is very promising. Near the end of 2019, Google and Singaporean wealth fund Temasek revised their projection for Indonesia's Internet economy (upwards) to reach USD $133 billion, in total value, by 2025. This would be a big jump from the value of around USD $40 billion in 2019.
Whenever you sit in a coffee shop or restaurant (warung) in Indonesia, enjoying a drink or a meal, you will probably notice that most of the Indonesians around you are in constant contact with their mobile phones (or smartphones), iPads, and laptops. Or, when you walk on the bustling urban streets, you will notice that many Indonesians are sitting or standing next to the road while using their smartphones.
Indonesia, the world’s 16th-biggest economy, recently joined the “trillion-US dollar club” having a nominal gross domestic product (GDP) of USD $1.01 trillion. Meanwhile, the country’s annual economic growth has been going at a pace of around 5.0 percent over the past couple of years.
It’s not only a question of being digital or not; it’s more about the level ofdigital transformation that you are willing to take.
Three Indonesian telecommunication and network providers are considered to have great room for improving their corporate earnings in the second half of 2017. These companies are Telekomunikasi Indonesia, Indosat Ooredoo, and XL Axiata. Reason why these companies should experience a good performance in H2-2017 is Indonesia's "data consumption trend".
Indonesians love the Internet and love sharing their daily experiences or thoughts with their online friends. Photo-sharing application Instagram draws a huge audience from Indonesia. Reportedly, more then 45 million active users log on to Instagram every month in Indonesia, implying a more than 100 percent year-on-year (y/y) growth pace compared to the number of Indonesian Instagrammers one year ago. What explains this growth? Indonesia's huge population as well as steadily rising Internet and Smartphone penetration.
Although the amount remains a secret, the government of Indonesia and Alphabet's Google finally managed to reach an agreement on the tax settlement after a long dispute that started in mid-2016. The news was confirmed by Indonesian Finance Ministry Sri Mulyani Indrawati. The dispute started because Indonesian authorities felt the so-called "over-the-top content" giants, referring to those companies that deliver content through Internet, deliberately did not set up permanent establishments in Indonesia in order to avoid taxes. Besides Google, other examples are Yahoo, Facebook and Twitter.
A new study conducted by the Better Than Cash Alliance, a partnership consisting of governments, companies, and international organizations, shows Indonesia has now become the world's fastest-growing mobile-commerce market (m-commerce). Growth of online shopping in Southeast Asia's largest economy is attributed to the rising spending power of Indonesia's middle class as well as expanding Internet and smartphone penetration. According to the study, Indonesia's m-commerce market surged 155 percent in 2016.
The number of smartphone users in Indonesia is rising rapidly in line with growing per capita GDP and widening Internet penetration across the Archipelago. Based on data from research institute eMarketer there were 69.4 million smartphone users in Indonesia at the end of 2016. Moreover, the number of Indonesian smartphone users is expected to grow to 103 million by 2018, which would make Indonesia the fourth-largest smartphone market worldwide after China, India and the United States.
Local and foreign smartphone vendors are eager to assemble 4 Generation long term evolution (4G LTE) smartphones in Indonesia. No less than 26 companies (and brand owners) have established assembly plants in Southeast Asia's largest economy with a combined investment value of USD $600 million since 2015. Of these 26 companies, 14 are local players. The number of foreign smartphone manufacturers in Indonesia is expected to grow as a new government regulation comes into force per 1 January 2017.
Bisnis Terkait Internet
