Market Info Pack

Indonesia
April 2016
Syarifah Nadia S Azizan (syanas)

Google Confidential and Proprietary


Fasten your seatbelts,
youre landing in Indonesia.
Agenda Proprietary + Condential

1 Brief Overview of Indonesia

2 Economic and Political Landscape

3 Why Indonesia

4 Deep Dive: Online Consumer Prole

5 Deep Dive: Payment Methods

6 Deep Dive: Search

7 Deep Dive: Display (GDN/YouTube)

8 Deep Dive: Mobile

79 Next Steps

Sources: Jakarta Globe Your City Your World, Majalah Detik Indonesia 2015: Jokowi Selepas 100 Hari - Jokowi betul-betul
sendirian
11 Brief Overview of Indonesia
Population:
250 million Projected GDP growth:
(4th largest population in the Worlds largest Muslim 5.3% (2014) 5.8% (2015)
world) majority country

Archipelago nation of
17,000+ islands stretching Worlds 3rd Largest democracy GDP: $868.3billion
5,150km

The Biggest economy in Southeast Asia

and ASEAN, accounting for 1/3rd of By 2030 Indonesia could have the
ASEAN GDP worlds 7th largest economy

Sources: CIA, 2013, The World FactBook

eMarketer,,Edelman Indonesia, Nielsen Google Confidential and Proprietary
 Proprietary + Condential

1 Indonesia is extremely diverse and young

255 million people (58% live in Java) 74 million people in the middle-class
88.1 million active internet users
>17,000 islands and afuent consume (MAC) segment
79 million active social media users
300 distinct ethnic groups (15 major) 43.3% of population Below 25 age
318.5 million mobile connections
5 major religions group (median age 29.2)
(subscriptions)
4th most populous nation

Largest producer of natural resources
85.2% mobile phone penetration
(e.g. petrol, palm oil) 46% live in rural areas
15.4% PC penetration
$900B GDP 93.9% Literacy rate
Worlds most populous Muslim country High birth rate

Source: http://www.indexmundi.com/indonesia/demographics_prole.html
https://www.techinasia.com/talk/digital-southeast-asia-q4-2015/
Consumer Barometer
 Indonesia has an interdependent, high power-distance
Proprietary + Condential

1 culture
Sense of Identity Connections & Contacts

Problem-solving Approach The Boss

 Proprietary + Condential

Status and group-identity have digital implications

Needs that Indonesian users seek to fulll through digital

INSIGHT

This is why Social Media is so important:

Know what the group is doing : dont miss
out
An Indonesian Maslows Hierarchy Be seen by the group : maintain status
Rather than Self-actualization at the top,
membership in groups and perceived
position in society are paramount.
2 Economic and Political Landscape Proprietary + Condential

40% of the regions economic output, member of the G20.

Military government under Suharto, Indonesias president for more than 30
years.
In 2004 - Susilo Bambang Yudhoyono was elected - first strong democratic

2
president for Indonesia.
Wind of Change

Joko Widodo: 2014 presidential elections made him a better

candidate, and a person to truly understand the politics in
Indonesia from ground-up (blusukan), especially pertaining
to foreign investments.
He did something that was a feat to his predecessors: cut

$769
fuel subsidies in the country (BMM), which led to savings of
230 trillion rupiah ($18 billion) which could be rechanneled to mln
infrastructure, health and education plans.
The worlds largest Muslim-majority nation and democracy - since the Charlie Hebdo attacks the media has
put a spotlight on the dichotomy of Islam-Terrorism. Jokowi sees Indonesia to be an example of moderate
Islam and in Indonesia, Islam and Democracy can go together.
With a long term vision and plans to improve education and infrastructure, Indonesia is poised for growth.

Sources: Jokowi after 100 days CNN ,Amanpour,McKinsey Global Institute: The Archipelago economy: Unleashing
Indonesias potential, 2012
 2 Indonesia, A Short History

Trade with nations such as China and A long period of colonization began in the 16th In 1942 the Japanese took control
India rst brought Hinduism and century, when Portuguese gained control over Melaka of Indonesia. Toward the end of
Buddhism to Indonesia before Islam in search for Indonesian spices. Less than a century WWII, the Japanese withdrew and
was introduced by the Persian traders & later Indonesia was colonized by the Dutch. The VOC Sukarno, Indonesias future rst
spiritual teachers. Sriwijaya was the (Dutch East Indian Company) presided over president and then nationalist youth
prominent maritime empire for 6 Indonesia, gradually expanding its reach despite leader, pronounced Indonesias
centuries, and dissolved in the 13th intermittent disruptions from the British and native independence on 17 August 1945.
century. Indonesians.

Want to know more? Check out this short video

Source: http://www.localhistories.org/indonesia.html
 3 Why Indonesia?

ONLINE POPULATION IN INDONESIA

83.6 MILLION*

*and it will only keep growing

Sources: eMarketer, 2014 Google Confidential and Proprietary

3 The tech industry is taking off

Foreign and home-grown startups have expanded rapidly in the

Indonesian market
 Proprietary + Condential

Top Retail Sites in Indonesia in 2015

 Proprietary + Condential

Types of sites used, Product/Service Category

Who are our users?
 4 Deep Dive: Online Prole

48.4% 51.6%
Whos Online?
58%

female
are aged between
male 16 and 34 years
37%

35hrs Weekly time

spent online
have a high
income
Dominated
by people

95% 47%
never search or buy
with higher
education*

prefer websites More Digital

in Indonesian on foreign Natives
websites than Digital
immigrants
Sources: eMarketer, 2014 Time Spent using the Internet, EuroBarometer, 2011, User Language Preferences Online
TNS/Google, 2014, Connected Consumer Study Google Confidential and Proprietary
Central Statistical Oce for 2013, 2014
 4 Still lagging behind other countries in SEA
84% Percentage of internet users in the country
81%

(from total population)

67%
17% 54%
50%
Growth Y-O-Y 46%
40%

34%
32%

100 million
Internet users by 14%

Aug 2016
MALAYSIA

THAILAND
SINGAPORE

BRUNEI

PHILIPPINES
VIETNAM

CAMBODIA
SE ASIA

LAOS
INDONESIA
Source: https://www.techinasia.com/talk/digital-southeast-asia-q4-2015
 4 However, the consumer class is growing rapidly

Growth in Consuming Class Annual Disposable Income

Indonesias Urban
Rp Million, Current Prices
Consuming class is Million
s
expected to grow
from 55 million in
2013 to 85 million
in 2020, adding
approximately 5
million individuals
each year

Sources:
Consumer Insights Indonesia, McKinsey & Company;
Indonesia Country Factle, Euromonitor
 4 And ID is a key market for the Next Billion users
Net growth in smartphone install base 2014-2018
Millions

1.2 Billion 30%

The top 17 Next Billion countries represent of this growth will be in SEA
1.2B users by 2018
Source: Smartphone Install Base - Canalys (2014-2018) as of September 2015, GSMA Intelligence
 4 Who makes up the online population?

YOUNG MOBILE MIDDLE CLASS CONNECTED

Population breakdown by
income class
mobile

Very
low
Low

tablet Lower

middle
Upper middle
PC Social has 94% reach,
High
with Path leading in
visits per user
36% of users are under 26. 3 of 10 top apps used
Phone and tablet usage Middle class (annual income>$3k)
Younger (18-26) users are exclusively chat
far outweigh PC usage has grown to over 55% today
spend the most time apps
Key consumers are the GDP will be 4th largest in the
online, using their phones Communication takes
urban middle class, world by 2030
>6 hours a day. the largest share of
concentrated in the four This group is very aspirational --
There are almost 10% online activity (33%)
main islands of Java, they are brand and status
more female users than
Sumatra, Kalimantan, and conscious. Leisure and culture
male
Sulawesi. expenditure is predicted to rise

6.1% per annum until 2050.

4 What do Indonesians do online?

Top 10
Most Popular Apps

Blackberry Messenger
Facebook
LINE
WhatsApp Messenger
Google Chrome
Clash of Clans
Instagram
UC Browser
YouTube
Opera Mini

ID is hyper-social, with users having 4.2 chat

apps on their phones
 5 Deep Dive: Payment methods

The most popular Bank

Transfer is done on Credit
BCA and mandiri.
Cards
Indonesians would Bank (26%) Others
prefer Bank Transfers
to revealing their Credit Transfer (11%)
Card information while
making payments
(39%) Cash on
online.
Delivery
(24%)

Sources: eMarketer, Worldpay, January 17, 2014, eMarketer Payment Methods share of eCommerce Transactions Google Confidential and Proprietary
Google in Indonesia.
 6 Deep Dive: Search

10.6> Million
Largest Search
Engine in
of users primarily search
on
Indonesia, with
71% of the
Smartphone
owners searching
on their phone
every day.
70% of queries have no exact-matched Keywords! huge
Opportunity to reach consumers at the moment of intent
Sources: eMarketer, 2012, Warc 2011
Google Confidential and Proprietary
 7 Deep Dive: Display and YouTube

12.2mil Unique visitors on a monthly basis, serves more than

660mil ads impressions in a week

Largest Display Network in Indonesia

89>% GDN reach of online population

86% 35% 65% #2 in the world (# of hours

watched)
50 Videos/Month
As their #1 destination for video content
= 315 Minutes of Video
Source: TNS/Google (2014): Connected Consumer Study Results
Indonesia, Nielsen: The Asian Media Landscape is turning digital, 2012. Google Confidential and Proprietary
ComScore, April 2012.
 8 Deep Dive: Mobile Phones

57.7m Indonesia has the

youngest mobile
smartphone users* internet user base in
SEA.
19% - less than 18
37% 63% 60% - 18-35
21% - more than 35
female male
53%
60% of regular internet users in
35% Indonesia use a mobile phone to
9% access internet
4%

Sources: eMarketer, We are Social, Oct 2012, Jan 2014, veserv/mobi/insights, The Mobile Internet Consumer
report,eMarketer April 2012 Google Confidential and Proprietary
 8 Deep Dive: Mobile Apps
Google Play Largest Android App Store.
In Dec 2014, local telco indosat announced that it is now providing direct
carrier billing to its users to buy apps from the Play store.
Users can do this by setting up the payment options on the Google
Play Store and choosing enable indosat billing.
Allows for greater exibility in purchasing these Apps.

Sources: eMarketer, Tech in Asia Google Play Store Pakai Pulsa Indosat
Google Confidential and Proprietary
People use devices to keep connected, stay entertained, and buy stuff
Social and Communications
WhatsApp penetration is at 45% LINE at
31%
Facebooks 4th largest user base
globally, Paths largest base
YT watchtime has increased 130%
61% of online mobile users time is spent
on social networking.
E-commerce USD2 billion e-commerce
E-commerce sales in APAC sales in 2013
Digital buyer penetration is
11% of total internet users in
2014
Purchase journeys are
complicated, but search is a
Indonesia lags behind other countries but has key touchpoint
large room for growth
Entertainment Users listen to music and radio, watch
videos and tv, and play games on their
devices.
70% of ID internet users are watching
online videos
YOY, 250% on mobile in fact YT usage
is nearly as high in metro as in non-
metro areas
Upgrades & Customizations Device improvement products are
frequently used. Power banks for
charging on the go are popular, as well
as file manager apps.
Lack of security is common as
Indonesians like to share devices with
family members and friends.
Indonesians rarely lock phones or
utilize passcodes. Parents also want to
monitor childrens mobile activity.
 9 Next Steps
Indonesias economy holds a great promise in the years ahead,
with its size, youth, diversity and geographic location at the heart
of the world economys most dynamic region will oer
signicant potential for investors and companies.

In contrast to many other Asian economies, the major drivers of

Indonesian growth are domestic consumers, rather than
manufacturing and exports.

Consumption generated 61% of GDP (2010) and expected to

increase to 65% by 2030.

The Internet user is dominated by Younger Generation

more Digital Natives.

Sources: McKinsey Global Institute: The Archipelago economy: Unleashing Indonesias potential, 2012 Google Confidential and Proprietary
Terima Kasih!
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