Indonesian Entrepreneurs Use Technology to Get Ambitious

In Indonesia's booming capital of Jakarta, it’s not just the five-star hotel lounges that are packed with businessmen talking about deals and proposals.

The Coffee Tree cafe in Mall of Indonesia, North Jakarta is also bustling with customers. Not just any ordinary customers, that is. On a Tuesday afternoon, the cafe's patrons are mainly entrepreneurs from various parts of Indonesia scouting for business and investing opportunities in Jakarta.

The large teak tables in the cafe are like work stations. Lying among coffee-stained mugs and French presses, are business proposals, name cards, plans and products for testing.

At a particular table, an entrepreneur was giving a slideshow presentation projected against the cafe wall to a small group of potential investors.

Yonathan Purnomo hails from the city of Surabaya on Java Island and has recently set up a business venture selling botanical beauty products via a direct-selling system using an online database known as Immortal.com. The range of products sold are extensive, from painless hair removal cream to water ionizers.

Although Purnomo, 49, has not officially promoted his business widely yet, he says he already has 5,000 members in the direct-selling network, mainly housewives living in the city of Surabaya.

With an online database and payment system using mobile phones, Purnomo says its members will be able to make orders and purchases with just a phone call, without having to attend to physical stores.

Purnomo is among the rising number of entrepreneurs in Indonesia, which already has about 50 million small businesses. However, with the high mobile and Internet penetration in the country, Indonesian entrepreneurs are evolving into Internet-savvy business people.

By tapping into the mobile market, the cost of starting a business are getting lower, and at the same time, small companies are able to reach out to the populous nation that is spread across islands and villages.

According to data extracted by Mobile Money Live, a tracking system on global mobile penetration, Indonesia has one of the highest mobile penetration rates, with about 73% of its population of 240 million using cell phones. The country is also home to the second-largest population of Facebook users in the world, after the US, and fourth most Twitter account users.

It is no wonder why Google has recently announced that it will set up an office in Indonesia and potentially pour in some $100 million of investments into the country. Some of the plans include building online linkages and leveraging small and medium enterprises from Indonesia with foreign buyers.

A manager of a China-based mobile phone chip manufacturer, who did not want to be identified, told me “The potential is huge. We are talking about an average of 70 million subscribers for each telecommunications network here.”

A business venture known as Go-Jek recently captured the imagination of Indonesians when it received funding and the attention of foreign companies to expand its businesses in Jakarta. Go-Jek is a motorcycle courier service that provides passengers rides on motorcycles to beat the capital city’s notorious traffic jams.

Started barely eight months ago, Go-Jek uses its website, Facebook and Twitter accounts to draw publicity, and has over 200 reliable drivers and 80 pick-up points around the city.

With a GDP growth of 6.1% last year, Indonesia is one of the fastest-growing economies in the Southeast Asian region. The country is also vying for a spot to be among the Brazil-India-China-Russia cluster of emerging economies that are preferred by foreign investors.

The country saw some $13 billion poured in via foreign direct investments in 2010, as investors hunt for coal mines and other commodities-related investments such as palm plantations and metal.

However, as fears of a global recession looms near, Indonesia needs to prop up domestic demand and investments, as well as increase job creation for its people. One of the strategies is to spur entrepreneurship among the locals.

In a survey conducted by BBC in May, Indonesia ranked as the most favorable place for entrepreneurs, in terms of ease in starting businesses and innovation. Although locals say there is still much to improve, especially in terms of access to start-up capital.

Purnomo says apart from making his business a profitable entity, he says his venture will also create more entrepreneurs. “I am a teacher, and I believe in sharing knowledge with the people here,” he says.