The burgeoning digital economy during the pandemic presents lucrative business prospects for foreign investors to start an IT company in Indonesia. Marisa Muhsin, Indonesian Representative of Click Next – A Thai-based IT solutions company, talks about her recent experience of doing business in Indonesia during this uncertain time.
Cited from ‘Indonesia Consumption Baskṣet’ – a survey conducted by DBS Bank in December 2020 – the number of e-commerce customers in Indonesia increased to 66% after the Covid-19 pandemic hit the country. In addition, Indonesia’s Central Bank, Bank Indonesia, also projected that digital transactions in the country will record a double-digit growth this year, with a notable acceleration is coming from digital banking and e-commerce.
As the consumer behavior is moving towards digital transactions, many businesses seek to step up their game by building their own reliable digital infrastructure, which often needs help from other enterprises specializes in this sector; an IT Company.
Indonesia has a huge prospect for business as the population here is growing rapidly. In addition, the chart of the young population is also very promising. Initially, our company was considering whether to dive into the Philippines, Vietnam, or Indonesia. But in the end, we decided on Indonesia as our first country to expand abroad. It is our first foreign investment and the reason why we decided on Indonesia is its rapidly growing population and booming economy.
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The booming digital economy of Indonesia, accompanied by the increasing population, gave us a huge window to make an entry into the market. Moreover, the taste and market behavior are not that different from Thailand. Yes, they are not the same of course, but compared to Europe or the USA Indonesia is pretty similar to Thailand. We had tried investing in a European country before, but it was a very big challenge for us because of the cultural gap. And Indonesia is easy to travel to as well, so it is a very potential country for us.
“Honestly speaking, I feel that establishing a company in Indonesia, as you also may know, is still very hard. Especially if you talk about the red tapes. In Singapore you can basically establish a company in hours; in Thailand, you can submit your company by yourself in one day, or a maximum of one week. However, in Indonesia, I still need help from consultants. That is why we engaged with Cekindo which makes things a lot faster with a lot fewer hurdles.”
I think in the future, it would get better, in terms of documentation, the registration, and everything but personally, if you are investing as foreigners without any local consultant it would be quite a hassle, in my point of view.
Most business professionals in Indonesia think that Work From Home arrangements have not much affected their productivity. However, according to the survey conducted by Robert Walters Consulting Group, they are increasingly distracted, less socially engaged, and have to make do without a proper office set-up.
Yes, we hire local talents for our Indonesian projects as it is very helpful. We can hire Thai nationals who speak Indonesian, but they are likely to face a culture gap. So investing in local talents is a must.
Our company also experienced challenges initially by working from home even though we are a software company. We still admit that work from home is a little bit hard at first. I think it’s not like whether you like it or not, you have to do it. But eventually, around 1-2 months of adaptation, all the operations got streamlined and our company sales went up. The productivity of employees increased after a certain period as they started to adapt. And even everything started to be more efficient because you don’t have to travel. You saved energy, you saved time.
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Previously, one had to meet clients, right? But nowadays, clients have understood that video calls and everything are enough. And it also basically represents communication purposes for each side. So, I think in the future it would be helpful to have work from home culture.
I see there is a high potential. In terms of digital talents, I think there is no need to be in a hurry. Because you know the Indonesian market itself is still gradually adapting to the digital environment.
I don’t think it is all about being digitally savvy, it’s not about being the most high-tech company. Click Next is a software provider right, but we are still focusing on human-to-human touch. That is what Indonesian people need. They still need educational services. They still need people to guide them into the eCommerce business, so if you are asking whether Indonesia has digital talents as good as Silicon Valley, of course, the answer is that we’re still not that advanced.
But in fact, we don’t need that at the moment. We’re still more on the educational stage, so I think in the future, everything will be more open and I believe with the right people and management from the Government, Indonesia will become a very good digital hub in the coming years.
While there is much being made of the post-pandemic shift to e-commerce and digitization, not everyone believes that this consumer shift will push online shopping ahead of offline over the long run. Some retail executives believe offline sales will start to surge gradually.
Regarding online and offline stores, I think in the future, offline stores will still exist. Especially if you consider Indonesian consumer behavior. They love to meet people, they love to chit chat, they just love to see things physically.
However, online stores will increase as well. I think they will be parallelly growing. People will get used to having online stores as well. And online stores are not going to replace offline stores. But they are going to save costs for the company. Maybe they don’t need to open as many offline stores as before, and then they could share half of it as an online store.
As an example, you know buying a car is quite expensive, right? I have a client coming from a car showroom who informed me that previously, people went to showrooms to buy a car. But now 70% of their leads come from online channels. That’s quite huge for an expensive item.
So I think in the future, people will be getting used to online stuff, but then it would not wipe out the offline stores.
We are trying to make the web an easy solution for businesses and their customers. We not only develop business websites but also e-commerce solutions for businesses and design branding material as well.
It’s a matter of helping businesses grow, having them grow as a brand, and serving their eCommerce needs. We also integrate websites with 3rd parties, such as payment gateways, logistic companies, etc.
Having a website is not enough. They also need to do online marketing to make the website visible and drive traffic and sales through it. Hence we offer comprehensive web development and digital marketing solutions to our clients.
Starting an IT company in Indonesia during the pandemic on your own makes you vulnerable to procedural pitfalls and may prove to be cumbersome. With a clear and hassle-free company registration, Cekindo conducts due diligence and market research to rule out any loopholes. Our consultants readily aid you to obtain the necessary documents and licenses like business and import licenses. We also provide legal consultation and save you the management stress with our HR and recruitment services.