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A closer look at Indonesia’s digital economy

Public Relations

Indonesia has cemented its new status as an upper-middle-income nation and currently holds the distinction of being Southeast Asia’s largest economy. The world’s fourth most populous nation has been at the forefront of accelerated economic transformation from home-grown technology companies that deliver goods, products, and services to Indonesia’s market of more than 270 million citizens.


What was once a nation that’s economy primarily relied on traditional sources of wealth such as natural resources and agricultural products, technology and digital services are now driving enormous growth and innovation that positions the country as a digital hub for startups. 51% of Indonesia’s population is below 30-years old with a nominal GDP growth projected to be at 5.0% and hosting over 197 million internet users.

Digital is the new normal

The recent explosion of growth in Indonesia’s startup scene has grabbed global attention, with Jakarta ranking third on Startup Genome’s 2021 “Emerging Ecosystems” with a combined startup valuation of 34 billion USD. The country's success has been driven by homegrown unicorns such as Gojek, Tokopedia, Traveloka, Ajaib and to name a few.


During the pandemic enterprises in the digital sector boomed more than ever which was spurred by the increased consumer demand. E-commerce, online hotel reservation platforms, ride-hailing businesses, and parcel & food delivery services are flourishing amidst an environment where many brick-and-mortar businesses had to close due to restrictions. Despite the country returning to normality in the post-pandemic era, the demand for digital services continues to grow and has become a part of the new normal.


Technology is connecting society


Technological innovation arises from the creation of tangible solutions to resolve long-standing issues in society. This holds particularly true for the new wave of Indonesian startups as they serve to address two fundamental issues in the Indonesian market.


The first issue is geographical disconnectivity as the country has a population of over 270 million people who are spread across 6,000 habitable islands. Technology has helped maintain logistics and operations for local businesses as well as addressing the significant price disparity across regions, with prices of consumer goods being higher in tier-2 and tier-3 cities and rural areas.


Financial dysconnectivity is the second issue. Indonesia has a national bank account ownership rate that is under 50% which has created a disconnect between digital services, merchants, and consumers. This means that for some consumers they are unable to afford big-ticket items or to benefit from traditional financial services. Fintech start-ups and digital services have enabled unbanked consumers to gain access to such services and bridged the gap between certain sectors of the population.


Exposure is key in the market


The consumer market is made up of over 197 million internet users which means that Indonesia has quickly become a key market for any local or foreign technology company. Whether your business is B2B or B2C focused, implementing an extensive integrated marketing and public relations strategy is key to stand out in this crowded market. As a leading public relations and integrated marketing agency in Indonesia, we have worked with clients from the technology sector to enhance their brand and ensure they’re connecting with their target audience on optimal channels.

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