For the third session of the monthly series, ‘A Future In ASEAN’ Dialogue, ABYA is proud to invite speakers from SMU Alumni Association (Indonesia) and SIngapore Global Network, namely Effendy Tanuwidjaja, CEO and Founder of Rentfix.com, and Johnny Widodo, CEO of OLX Autos. The moderator of this session was Khushbu Topandasani, Investment Associate of Vertex Ventures.
Written by: Stanley Toh & Soon Poh Suan
Edited by: Isabelle Goh
The webinar took place via Zoom and ABYA was humbled to see over 50 participants on the evening of 18th July 2020.
Why start/join a tech company?
Even as they hail from dissimilar industries, whilst having contrasting professional backgrounds, it was clear that there are common viewpoints between Effendy and Johnny. It was the prospect of opportunity in Indonesia, during the time of founding their start-ups.
Johnny recounted that the emergence of Indonesia’s present decacorns and unicorns, coupled with the increasingly tech-savvy younger generation, had formed the basic ingredient which catalysed digitalization in Indonesia.
Seeing the rapid rise of such tech companies over the past 5-6 years, Johnny realized that this was going to be the next big thing. “If you know that this is the change that is going to happen…very fast and…choose to not embrace [those] changes, you would be irrelevant.” This spurred him on to take the leap of faith and risk to be part of the technology industry. Similarly, Effendy too rode on the digital wave that was spreading throughout Indonesia, by founding his own company – Rentfix to help digitize the property industry.
Effendy had identified several opportunity areas in real-estate in Indonesia, having been a seasoned industry veteran for seven years. In particular, he took notice of the low digital adoption rate in conducting business transactions and strove to make a more positive impact by digitizing the real-estate industry in terms of better managing the supply and demand of properties so that valuable properties are not left unused. Echoing Effendy’s own motivations, Johnny remarked that “the vision of starting a company…always [starts] from the pain points of why people feel miserable in that industry”, which in his own automobile industry was to try to make the process of buying and selling used cars more transparent.
Challenges faced in their entrepreneur journey
Effendy highlighted that one of the challenges, faced when starting Rentfix, was in trying to inspire believers in the company’s value proposition. It was reflected that stakeholders who are more senior in the industry may not have witnessed the prevalence and importance of digitalization, unlike newer entrants to the market – youths, who would be more reactive to this upcoming trend.
However, Effendy reiterated that such challenges could also create new possibilities that could further the digital economy in the real-estate industry. Most importantly, he shared that for entrepreneurs who are just starting something and have yet to find success, much persistence and grit is required to keep one going.
Johnny views the challenges he faces from two perspectives; one being the external and the other being the internal.
In the external realm, he cites an example such as Indonesia’s non-uniform infrastructure, which could hinder the prospects of starting a nationwide business. The challenge of building trust with consumers when doing business, especially online, was noted to be key in sustained consumer usage.
In examining internal influences, he then referred to his own business and self, to which he brought up the issue of talent development. He highlighted the challenge of hiring for the right skill sets, while many of which are often not taught in schools.
As he currently manages his own company, Johnny gave a personal reflection that it is most vital for leaders to continuously push themselves and channel the belief that their endeavour would be successful, whilst adding value to the community. He warned the audience on the impact of one’s doubts about their own business, which could likewise have a contagious effect in dampening the morale of the team.
Doing business in Indonesia
An adventure in itself, working in Indonesia would provide one with plenty of opportunity, especially in tackling the ongoing business inefficiencies. Barring the transport system and traffic in Jakarta, the lifestyle in Jakarta can be said to be on a similar level to that of Singapore.
In comparison to Indonesia a decade ago, Indonesia is more urbanized than ever, while massive investments are flowing into Indonesia aggressively, signifying the growing confidence in Indonesia’s economy. By venturing into Indonesia as soon as possible, one could experience the second decade of the country’s digitalization.
Thus, Effendy strongly encourages youths to consider working in Indonesia and hopes that they can be the drivers of change for smaller companies and sectors that are lagging behind in the digital era.
Drawing examples from the Fintech and e-commerce industry, Johnny illustrates how advances in data analytics and machine learning have revamped business processes ranging from opening a bank account, borrowing money, to making digital payments. Looking at the automobile industry which he is currently in, he sees new technologies like electric vehicles and self-driving vehicles as the future.
Underlying the major technological breakthroughs in the various industries, are profound developments in Indonesia’s social demography. Effendy brings to light the fact that despite poor and uneven infrastructure across the Indonesian archipelago, the number of internet users has doubled to 175 million during the period 2015 to 2019. Moreover, Indonesia’s phone connection and internet user growth rate is growing faster than the rest of the world.
The growing population of people with access to the internet indicates a strong potential for conducting digital business in Indonesia, and this is reflected in how Indonesia has become so attractive to big companies hailing from the West and China. Given the vast room for development and exponential growth, Effendy is very positive that the way to develop the Indonesian economy is through the digital sector.
How has COVID-19 brought about new changes in Indonesia
With the COVID-19 global pandemic, Effendy highlighted several emerging trends in Indonesia’s digital economy.
Firstly, working towards an inclusive e-commerce industry such as providing customized services catered to targeted audiences and expanding services to smaller cities and rural areas. There will be a growing adoption of digital payment services, notably blockchain-based payments in Indonesia.
In addition, the use of virtual services provided in various sectors — healthcare, education, entertainment and more. Further, affordable touchless technologies to adopt new ways of living in public spaces in Indonesia. Even though Effendy shared that Indonesia still has a long way to go, its Government is supportive of Industry 4.0 — automation, robotic and artificial intelligence — and provides much support for this transformation to move forward.
Last but not least, with the movement of capital from Jakarta to East Kalimantan, Indonesia has opened up more spaces for businesses, start-ups and innovation to take place in the new capital city. As Effendy shared, “It would be like a restart button”, notably in the areas of Smart city technologies and e-government services.
“With the same effort and potential, one serves different scales of impact,” says Johnny. Johnny emphasized the importance of maximizing one’s potential by being lucrative in order to strive in this era. Additionally, having a good grasp of business culture in Indonesia is equally important as well. Being able to blend into its culture and build a strong network within the industry will put one into great advantage over others. Furthermore, the ability to gain trust from the team is pivotal to one’s success in Indonesia, given that there are different cultures within Indonesia such as Sumatra and Java. “Stay curious, stay vigilant in learning and always try to understand others,” said Johnny.
Before concluding, the panel speakers welcomed the audience’s questions, which was related to the youth demographics in Indonesia. Effendy shared that the youth market is exceptionally important in the online services such as air travel.
However, as compared to the entire consumer market, youths do not make a significant difference yet since Indonesia is a highly conservative country. With the influence of social media, youths in Indonesia tend to look more for brands which they can better relate to instead of branded names.
ABYA would like to thank the panel for the personal and professional sharing on the factors that have guided their careers in Indonesia, as they see a future in ASEAN.
With these insights, ABYA will continue to establish connections between ASEAN and Singaporean youths, whilst constantly seeding information influence to nurture ASEAN-savvy youths.