Can Indonesia follow in the footsteps of China to become a force to reckon with in the digital economy? If it plays its cards right, it appears so.
According to a report by UOB analysts, these are some factors that Indonesia has going for it:
- Strong startup scene: Indonesia’s four domestic-based unicorns Go-Jek, Traveloka, Tokopedia, and Bukalapak, have an estimated combined valuation of roughly US$6.3 billion. Using the Chinese story as a model, UOB expects Indonesia’s FinTech economy alone to contribute approximately US$ 48 billion to the overall economy by 2022. Up to 51 FinTech firms are officially registered with the Financial Services Authority.
- Relatively good mobile and internet penetration: In 2022, Indonesia’s mobile phone internet user penetration rate is forecasted to increase from 29 per cent of its population in 2017 to reach 41 per cent, bringing a total of 114 million Indonesians online. This will provide digital players a large consumer base to market their services as well as drive marginal costs lower through economies of scale.
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