5 Business Opportunities in Indonesia

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Indonesia’s economy is becoming more attractive for foreign and domestic investment.

As the fourth most populous country in the world and the largest market in Southeast Asia, it’s no wonder that business opportunities in Indonesia are growing. Case in point, the country attracted more than USD 20 billion in foreign direct investment through 2018.

This high number is made possible for many different reasons, such as:

  • Stable economic growth at average 5.5 percent per year since 2003,
  • A large labor force with about 200 million working-age citizens,
  • Rising growth of urban areas like Jakarta, Medan, Bandung, and Surabaya, and
  • Increasing internet penetration with over 220 million mobile subscribers.

Right now, Indonesia is the 16th biggest economy in the world, but this rapid growth might boost it to become the 7th biggest economy by 2030.

What are some emerging business opportunities in Indonesia?

Both domestic and foreign investors can succeed in any industry in Indonesia, as long as they commit the necessary time, resources, and expertise.

Also read: What are the industries where foreigners can fully own companies in Indonesia?

However, some industries are very popular or promising right now, based on Indonesia’s economic trends. Here are some examples.

1. B2B services

Over 58 thousand new businesses registered in Indonesia in 2016; this number is sure to grow over the next few years. However, most new companies won’t have the time or resources to manage their finances, human resources, or legal compliance.

It’s common for businesses to outsource services like this while they focus on developing their teams or products. Hence, there’s a big chance for business support services to succeed in Indonesia, such as:

  • Law firms,
  • Workspace providers,
  • Accountants,
  • Payroll and tax services,
  • Headhunters, and
  • Executive search firms.

2. Accelerators and incubators

Indonesia boasts one of the largest startup communities in Asia. The estimated number of active startups in this country varies but is consistently high, ranging from about 900 to above 2.000.

However, the vast majority of these startups are still in the early stages. Research from Catcha Group suggests that over 90 percent of Indonesian startups are valued at less than USD 10 million.

Meaning, while many Indonesians are very interested in building their startups, they still need a lot of support in doing so. Hence, programs that aim to support startup growth like accelerators and incubators have a lot of room to play in this country.

Also read: What strategies are helping Indonesia’s unicorns grow so fast?

So far, many types of entities have founded or co-founded accelerators and incubator programs, such as:

3. Social media marketing

As mentioned above, Indonesia is a very mobile-savvy country. Combined with its significant population, this gives Indonesia one of the most massive social media audiences in the world, with over 150 million people on social media.

Moreover, the average Indonesian spends 3 hours and 26 minutes logged on to social media every day. For comparison, the global average is 2 hours and 22 minutes. So, they’re the perfect audience for social media content, as well as online marketing in general.

Also read: What are the most popular social media platforms in Indonesia?

So, there are many business opportunities in Indonesia for companies like:

  • Online marketing agencies,
  • Social media management platforms,
  • Content creators, and
  • Content creation tools or platforms.

4. Online marketplaces

Nearly all Indonesians either work or interface with small to medium enterprises or SMEs. SMEs comprise about 99 percent of business units and 90 percent of jobs in Indonesia.

Indonesian SMEs include a variety of goods and services, such as fashion, food and beverages, handmade crafts, and household products.

This large pool of small and relatively new businesses means that there’s a lot of room for companies to provide logistical and tech support. Two of Indonesia’s unicorns, Tokopedia and BukaLapak, provide customer-to-customer (C2C) marketplaces where users such as SMEs can buy and sell services on the platform.

The rapid growth of these companies means that more Indonesians are shopping online, especially to purchase goods from SMEs in the country conveniently.

5. Online B2C services

Besides products, Indonesians are also looking for convenient ways to consume services.

Indonesia’s other two unicorns, Gojek and Traveloka, are online service booking platforms. Traveloka allows people to book transport and hotel tickets. Meanwhile, Gojek’s services range from personal transport, food delivery, to lifestyle services like make-up and massages.

Also read: What are some popular online service platforms in Indonesia’s digital economy?

Interestingly, on-demand services are also seeing growth besides daily services like transport and food delivery. Another popular trend is convenient online booking for services like formerly need lots of preparation and paperwork like finances and health.

Examples of these are online lending platforms like KoinWorks and medical consultation platforms like Halodoc.

So, what’s the conclusion?

As you can see, there are a lot of opportunities that new investors can explore in Indonesia.

However, while Indonesia is a very prospective place to build a business in, it’s not necessarily a simple one. When it comes to regulations, many fields that we outlined in this article, like e-commerce and technology, have a few extra obstacles to tackle before being able to do business.

Luckily, our network of consultants is here to help you navigate these regulations and make sure you set up your business quickly and conveniently.

Greenhouse empowers you to book business incorporation services and connect with market entry consultants in your target markets.

We’ll connect you with experienced consultants on the ground who can help answer your questions about doing business in Indonesia.

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