iPhone in Jakarta starring Reza

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One of my favorite things to do while traveling is talk to locals. This is Reza. He is 22 years old from Solo, a region in the Central Java region of Indonesia. Java, by the way, is stunning. Google the images and prepare for your minds to be blown. But I digress.

Reza moved to Jakarta for university, and attends school during the day, works in a restaurant until midnight every day. He has been saving for an iPhone and is planning to purchase one some time soon. Not the 6. Not the 5s even. He is excited for the iPhone 5. Right now, I don’t even know the kind of phone he has.

I didn’t want to ask him how much he makes, but according to Salary Explorer, average restaurant worker salary in Jakarta is 7,400,000 IDR a month (appx: $600 USD).

Reza is only one of the many people I have talked with, to further understand the Indonesian — well Jakartan — market.

We all know the population is high. The GDP is through the roof. I’ve questioned people’s excitement about Indonesia in the past, but after experiencing Jakarta, I must admit, I am now a believer in this market too.

Indonesian people rapidly adapt to new technologies and have a willingness to learn — even, if they cannot currently afford to own devices and such to get them online or make their day to days easier with technology. I am thrilled to be here and look forward to sharing more on the ground stories of Indonesia.

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Global Mobile Payment Market

To further reinforce the previous post on the mobile payment market, I came across a BI deck on the The Future of Mobile Payments.

1. Might be difficult for people in developed nations to digest, but in emerging nations, billions of people don’t have access to banks.  Southeast Asia is leading the pack:

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2. Global share of payment opportunities in these emerging markets are beyond ridiculous. YoY of MENA is the steadiest, while Southeast Asia and Latin America are predicted to steadily grow as well (granted, these numbers seem to be pulled from Cap Gemini — would be interesting to see Merrill Lynch, Morgan Stanley and GS’ predictions)
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3. And of course, global numbers of mobiles — billions of handsets, most still feature (flip phones or the ancient Nokias). What this means, is, citizens of emerging markets are reliant on capabilities away from smartphone apps we in developed markets are used to. Ex: M-Pesa is the first that comes to mind. Their major market share is Kenya, Tanzania and they are increasing efforts into Middle East (Afghanistan, South Africa, India and Eastern Europe, respectively).

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Neat tid-bits I’m digesting with a grain of salt. The market can rapidly change, especially with the amount of funding going into Bitcoin ventures, the payment sector in developed nations is unpredictable. The question lies, would the trend trickle over to emerging markets? Distribution of wealth amongst emerging markets is also a factor (ex: even if Indonesia has highest GDP, population of <1% of the population are the only ones with purchasing power, would it make more sense for a startup to look at Thailand first, where spend per population is more evenly distributed?) And so on and so forth, there are still many, many questions.

Biggest takeaway though is how Southeast Asia is still up for grabs for payments. I really want to see young entrepreneurs beat Rocket Internet and SMART’s initiative in Southeast Asia. Exciting time to be in APAC and especially, SEA as technology is still very much in its infancy.

See the entire slide deck on BI’s site here.

Mobile Money

Leaving the US has opened my eyes to a lot of things, especially how the world outside of America operates. Because the iPhone isn’t as adopted in other parts of the world, there are many solutions to make communication between iOS and Android possible — which is why I became so fascinated with chat apps.

Then, I fell into the chat app rabbit hole and became obsessed with learning, using and following the big players outside of the US: WeChat, LINE, Kakao and WhatsApp. Which lead to learning about the different use cases and the reason I keep piping on about how SnapChat, WhatsApp, FB Messenger are not like WeChat, Line and Kakao. I also argue WeChat is in a league of its own. (If you’re interested, my messaging app series is here). Living in Asia, it’s easier to appreciate various ways people and cultures use their mobiles as I am an actual user vs. reading about use cases.

When I visited various Southeast Asian countries with Dave McClure’s Geeks on a Plane tour, my mind was blown. In countries still considered emerging nations ex: Malaysia, Thailand, Philippines, Indonesia, the way phones are used are so different. Actually, everything is different. Most mobiles are pre-paid. Mobile internet connection is mostly 3G and the majority of the population still uses flip phones. I even saw old Nokia phones with the green, pixelated screens. Remember those? I was really good at Snake. Reading and researching about mobile, I was aware of the numbers but to actually see how low smartphone penetration actually was, is a moment I will never forget.

The biggest opportunity I see in emerging nations is how technology is solving dual objectives: social problems and monetization. And the biggest opportunity I see is in mobile payments. I’ve said it once and will probably keep repeating, that because WhatsApp has capabilities on flip phones and older phones, their biggest missed opportunity is moving from a communication utility into a full fledged platform.

I really wish I knew more about payments or was passionate about the topic enough to jump into creating a product. But I am, super excited to see who will be the first to solve across SE Asia.

qz really sums it up best:

At the end of April, nine mobile operators with 582 mobile connections across 48 countries in Africa and the Middle East committed to make their mobile money offerings work across their networks. With interoperability comes greater cohesion and opportunity for new services.

And the kicker:

If it’s done right, it could form the foundation of a whole new global financial-services industry. And the US and Europe will be far behind.

Read the entire post here

Southeast Asia

Quickly: I joined Dave and Geeks on a Plane in Manila last minute. Justin Hall of GG Ventures best sums up my take away of Manila:

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…which further enforces what I’ve been thinking about since coming back from Singapore and Bangkok. “Is a country’s GDP an accurate indicator of potential when it comes to startups from emerging nations?”

Manila particularly stands out to me, as the community is healthy and enthusiastic. Founders work together, there is a pay it forward type culture I haven’t seen elsewhere. This type of camaraderie is reminiscent of Silicon Valley around 2006-07ish, before the startup ecosystem blew-up.

Potential capital is of course, first and foremost the thing investors look at. But as someone who believes in the power of mentorship and how entrepreneurs nurturing other entrepreneurs is one of the main reasons why Silicon Valley is Silicon Valley, GDP shouldn’t be the only thing people focus on when it comes to building products. This is why to me, the Philippines is the country I am the most excited about in Southeast Asia.

Either which way, now is the best time to be in Southeast Asia, as the ecosystem is still in its infancy.

Added: just came across the blog of Oliver Segovia, founder of an eCommerce company AVA.
Aside from building a great platform, turns out he is an author of several books and blogs as well. He has an essay on the Philippines’ ecosystem and his vision of the innovation economy there. If you are the slightest bit interested in SEA, this insightful piece lays out the Philippines: “A Vision for the Philippines’ Innovation Economy, & a 4-Point Plan to Achieve It (and why it does NOT include Venture Capital)

Indonesia 101

Indonesia 101

A huge part of me is kicking myself for not participating in the Jakarta leg of GOAP SEA 2014 — what a fascinating market.

Quick rundown:
– Indonesia is the number one GDP country in Southeast Asia
GDP (PPP): $878 billion USD
Thailand is second in SEA with GDP of $643 billion USD

– Indonesia is the fourth country with highest GDP in Asia
China is first in APAC with $8.2 trillion USD
Japan is second with $6 trillion USD
South Korea is third with $1.2 trillion USD
Indonesia $878 billion USD

– Indonesia is the 4th most populated country in the world
population: 252 million people
the US has a population of 318 million people

– Indonesians spend a lot of time on the Internet, mainly on desktop / laptops. Mobile is still at its infancy.

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– eCommerce transactions are completed by bank transfers. No cash is exchanged. The interbank transfers are free because of the Bank Indonesia Act (BI Act) *if you’re interested, there is a legal document here explaining detailed legalities.

– GS predicts eCommerce will grow the most in SEA in the upcoming years

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– Under a revised law, Indonesia just increased foreign VC money allowed from 80% to 85% source

I was at first a little puzzled by Justin’s assessment that Singapore and Indonesia is where a majority of the VC funds in SEA would be focused, but I think I get it now. There are parts of me that wonders if Indonesia’s market could still be premature, with such low Internet / mobile penetration rates. And Singapore is too small but I still have so much to learn. Wishing I discovered this region sooner and I can’t wait to see Indonesia for myself.

*above sources not linked in post: 1, 2, 3, 4, 5