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Monetizing the Indonesian Internet and Mobile Market

Andy Zain MobileMonday @andyzain andyzain@gmail.com

Andi S. Boediman Plasa.com @andisboediman andisboediman@gmail.com

Mobile is BIG

67%
of the world population is

on mobile
Source : Tomi Ahonen (Nov 10, 2009) http://communities-dominate.blogs.com/brands/2009/11/the-digital-divide-in-numbers.html

Mobile is BIG

4x
PC ownership
Car

3x
PC TV Radio Mobile Phone

TV ownership

Source : Tomi Ahonen (Nov 10, 2009) http://communities-dominate.blogs.com/brands/2009/11/the-digital-divide-in-numbers.html

In Indonesia

Mobile
is even a much

BIGGER deal

There will be estimated

210 millions
mobile phone subscribers by end of 2009
(5 times Internet users)
Internet
Source : BMI Report 2009

Mobile

80%

of new phones

sold in Indonesia are Internet enabled. There are more than

10 millions 3G users
in Indonesia. (5 times broadband users)
Source : BMI Report 2009, inMobi

Indonesia is among the HIGHEST in the world in consuming mobile advertising Estimated over ad impression served each month

4 billions

Indonesia ranks among the HIGHEST in the world for mobile browsing intensity

700

525

350

661 pages
per month/person
Source : Opera, September 2009

175

Vietnam China Indonesia

UK South Africa

USA Russia

Young Indonesians, aged 8 - 24 years old have the highest level of mobile phone ownership in the region, at

80%

penetration.

Internet Users in Indonesia


80

60 in million

In less than 5 years,

40

half
2006 2007 2008 2009 2010 2011 2012 2013 Internet Users Mobile Internet

20

of Indonesian population will use Internet from mobile access.

What So Big Deal About Indonesia?


The 4th largest country in the world (240M population). The 5th largest Internet market in Asia (after China, Japan, India and S.Korea). 150M mobile phone users.

What So Big Deal About Indonesia?


Facebook :
3rd largest market worldwide (24M users)

Opera Mini :
2nd largest market worldwide (after Russia)

Twitter :
#1 market for Asia.

Why Mobile is Big in Indonesia?


Infrastructure Price

Culture

Choices

Pl

tic as

The Power of Fruit

Pl

tic as

The Power of Fruit


In emerging market, the usage often driven by bottom of the pyramid
I dont have Internet on my phone, I only use Facebook. :)

Pl

tic as

The Power of Fruit


In emerging market, the usage often driven by bottom of the pyramid

Dangdut vs iTunes

Overkill vs Functional

Embrace Local

Think Outside The Box

The Monetization Model


Looking into monetization potential in Indonesia

Monetising Model
bundling commodity & value added work with Telco/ handset for quick win

advertising will grow bigger in a later stage

epayment & ecommerce is coexist to grow together

Digital Advertising
Mobile and Internet Advertising market potential

Adoption of Digital Advertising


Percentage of Internet Ad Spend out of Total Spend 7 6 5 4 3 2 0.1% 1 0 1 2 3 4 5 6 7 8 0.2 0.5% Adoption is slow! In Year 3, percentage of Digital Ad Spend <1% UK Germany USA Japan India

0.5 0.8%

Indonesia Estimated Digital Advertising Market (Internet + Mobile)


US $20-30 million information
detik, kompas, kapanlagi, vivanews, etc

search & portal


google, yahoo, etc

mobile channel
Telkomsel, Indosat, XL, etc

community
Facebook, Kaskus, etc

Value for the Brand

targeting/ segmentation reach to a specic target market

reach maximum exposure to reach awareness

consumer core target market

rich media stimulate interest for the product & services advertised

engagement interactivity to get consumer insight & loyalty

Advertising Value Chain

Brand

Media Publisher
content & community

Media Aggregation
reach/ segmentation

Media Reseller
price bundling/ media mix/CRM

Advertising Agency
insight/marketing strategy

value proposition

Bundling Commodity & Value Added


Value added can be created in various ways to create an attraction factor to commodity products or services

Mobile Market Share in Indonesia


Starone 2% Mobile-8 2% Sampoerna TI Smart1% 2% Mobile 8 2% Axis Hutch 2% 5%

Esia 36% Flexi 60%

XL 18% Telkomsel 51%

CDMA Market Share

Indosat 19% GSM Market Share

Telkom Revenue Contribution


Others 1% Network 2% Interconnection 12% Fixed Line 14% Cellular 45%

Data, Internet & Infotech 26%

Fixed line will be declined and replaced by the growth in xed broadband. Telco has every intention to grow its digital businesses.

Smartphone

total: 3-4 million users

almost 2 new million users/ quarter

a complete ecosystem

cheap call & sms user prole & personalization

credit

mobile community
friends update & microblog photo sharing

chat & messenger

Commodity + Value Added


Commodity Value Added Result

+
Connectivity Content

=
Broadband Content Subscription

Commodity + Value Added


Commodity Value Added Result

+
Handset Content

=
Feature Phone

Bundling with Telco & Handset


By bundling value added service (content/community) with telco & handset will provide a quick win for Internet players.

Value Proposition
Unless we have a strong value proposition such as Google, Twitter or Facebook, its easier to work on a short term exclusive deal with Telco and handset in order for them to have the benet to promote your content/ community/platform.

Epayment
Epayment provides the infrastructure for online transaction and ecommerce

Credit card in Indonesia



Total credit card from 20 banks: 11.5 million in 2008 45% growth in credit card transactions from 2007 to 2008 USD 10 billion in credit card transactions in 2008 Major credit card issuers typically set aside 0.5% funding to be awarded to customers as points It is estimated that USD 27 million is set aside for redemption in 2008 (50% of issuers)

Ecommerce & epayment Adoption

belibarang.com

ecommerce and epayment needs each other to become widely adopted

Case Study: Plasa.com

Reach a broader market by Internet & mobile


plasa.com m.plasa.com

Provide digital content as well as physical products


mobile plasa.com

Key Takeaway
Work both on quick win monetization by bundling them with the telco/handset as well as long term branding on the Internet for advertising monetization model. Ecommerce & epayment is shaping its way to offer future monetization model.