Technology Roles to Help Millennials’ Housing Problem

The Ministry of Public Works and Public Housing (PUPR) estimates that 81 million people of the millennial generation – born between 1980 and 2000 – are yet to own a house. The amount is equivalent to 31% of the population in Indonesia.

In the middle of last year, there was a plan to divide a special mortgage scheme into three groups based on age. First, for ages 25-29 years, cost relief is provided for flats or rental apartments.

Second, for those aged between 30-35 years in the form of subsidies. Finally, people at the age of 35 years above, with a permanent job and an apartment fit to salary, on how to make it feasible and comfortable. The government sent representatives to learn about the concept of millennial housing in South Korea.

To date, everything is still a discourse. On the other hand, the rise in property prices was not followed by an increase in the Regional Minimum Wage (UMR).

Improving purchasing power can actually be performed by the central bank by giving allowance to the loan to value (LTV) for Home Loans (KPR). However, banks do not necessarily apply it to consumers. There have been adjustments, even months, since allowance has been granted.

Within that period of time, can it be guaranteed that the consumer purchasing power remains?

Housing — Images of Free-Photos from Pixabay

Complex and conventional process

The longer we delay to buy means the harder it will be to catch up. Although deciding to buy a house, for most people, is not simple math. In terms of humans, besides pricing, there are many considerations in terms of location, how close to public transportation, main roads, facilities around the house, and many more.

People are getting aware that buying a house in Jakarta is impossible. Therefore, they decided to go to the surrounding cities.

Everybody knows that the process of buying a house, especially through the KPR is quite complicated, time-consuming, and cost much. Without any other options offered besides compromised and following the entire procedure.

There is a booking fee required for collateral to buy a house so the agent does not sell the selected house to another party while waiting for the mortgage process to finish. The amount of value varies depending on the developer, starting from Rp500 thousand for low-cost housing, up to Rp25 million for luxury housing. When the purchase occurs, booking fees can reduce the purchase price.

Furthermore, paying appraisal to the bank or a third party appointed by the bank for assessment and pricing. It’s similar to booking fees and the value varies. Unfortunately, appraisal money will be forfeited when the KPR submission is rejected.

Appraisal is an important phase because there is an estimate of house prices. There are a number of considerations that have caused the KPR application to be rejected, for example, the location is not ideal, near a cemetery, garbage disposal, or high-voltage electricity pole. This component can decrease housing prices.

Unfortunately, when you reach this phase and the KPR application is rejected, the money will be forfeited because each bank has its own assessment. Therefore, you have to pay another appraisal to different banks. This phase takes time, you must consider the deadline for booking fees.

The entire financial data of prospective buyers will be checked thoroughly by BI Checking, whether there’s a record of bad credit, the bank would be reluctant to provide loans. After this phase, a feasibility creditor analysis will enter. The bank will survey the prospective creditor’s workplace, check the account, and the employment status when taking non-subsidized KPR.

Whether you are a permanent employee, the assessment do not stop there. When you’ve been working under a year, there might be some obstacles. When you make it, there must be additional prerequisites. For example, submitting a letter of employment from the previous office.

Mediana, a private employee, admitted her expectation to buy a house for the last few years. He realized that it was time to turn her salary into assets, especially her parents are getting old. She gets more excited when the support came from his work environment.

“Well, it’s kind of will and not willing to go abroad, it’s no longer to spend money on traveling. Honestly, it’s partly influenced by friends. My mind was not 100% ready yet. Pretty stressful,” she told DailySocial.

Through so much discussion, she finally made it. She decided to buy a house not far from the office and still reachable via CommuterLine. Medio 2017, Mediana started to collect down payment (DP) by 30% of the house price of Rp437 million. She withdraws all personal savings and supported by parents for DP.

The credit agreement starts in May 2018. At that time, the mortgage installments begin. She happened to use BTN for the KPR because the housing developer was a partner of the state-owned bank.

“Also, Indonesia’s economic growth was slowing down that year, therefore, the interest rates were lower for smaller installment.”

Starting from finding a house, KPR facilities, everything was done manually. In fact, she didn’t use any technology because she thought it didn’t offer the right solution. Mediana visited the location randomly, there are several places she had visited.

The suffer of having a house

Mediana’s story is quite relevant to the global research released by HSBC with Kantar TNS. This research stated about 36% of millennials who already own houses in various parts of the world, get financial assistance from their parents.

In Canada, the portion is similar to global figures, which is 37%. In the United Arab Emirates, the figure is much greater, at 50%. France is in the lowest order, only 26% of millennials buy houses with the help of their parents.

This research involved 9,009 respondents from nine countries, namely Australia, Canada, China, France, Malaysia, Mexico, the United Arab Emirates, United Kingdom, and the United States.

As many as 70% of millennials in China already have houses, placing this country the highest of the eight other countries. In the US, the figure is only 35%. While in Australia, the figure is much smaller, which is 28%.

More than half of respondents said they were willing to cut down on lifestyle costs and have fun in order to have a home. They are willing to reduce hanging out in cafes or shopping for clothes. Not only saving, they are also willing to undergo various sufferings in order to be able to buy a house.

As many as 21% of millennial said they were forced to postpone having children. As many as 33% choose a house that is much smaller than desirable. Then, 18% of millennials are willing to buy a house that is not so desirable, for example too far from the place of work. In fact, there are 21% of millennial states that they rent out some rooms to help pay the installments.

Observing prop-tech development

Technology is designed to make decisions easier. The same thing also applied when buying a property that should be assisted with technology. How is the development of technology for property today?

From the startup realm, there are now several players who focus on property technology or well-known as proptech. It is defined as the use of information technology to facilitate exploration, purchase, sale, and management of the real estate.

When translated into business languages, it includes property listings, virtual reality platforms, rentals, and property funding. Almost all proptech verticals are present in Indonesia, mostly on listings, rentals, and funding.

In terms of listings, there are Lamudi, Travelio, Rumah123, 99.co, and Rumah.com. Each player began to enter another vertical, for example, Travelio which helps property owners’ management. Rumah.com provides a mortgage calculator to help simulate and additional information to enrich users’ insights.

Meanwhile, in terms of funding there are CicilSewa and Gradana, both of which focus on property financing. CicilSewa offers the concept of paying rent property on a monthly basis, whether for a house, shop, or apartment. The problem they want to solve is having to pay rent in advance for a year or two.

While Gradana utilizes the p2p lending scheme for non-bank mortgage loans, including loans to make a down payment when applying for a mortgage. This solution is considered revolutionary, given the fairly high risk.

Through one of its products, GraStrata, the tenor is available for up to 20 years. As one of the steps in risk management, the company requires borrowers to plant a deposit of 2% of the loan value and will be returned after paying it off.

The solution provided by Proptech startup is quite a relief because they are able to answer the pain points that continue to haunt prospective home buyers. However, what about banking?.

Take an example of a BTN red plate bank. It was designated by the state to focus on housing finance. So it’s natural, all of its products are specifically designed to make it easier for customers to make mortgage payments.

Their commitment to improving business through technology should be appreciated, also ambitious. BTN developed the concept of Proptech through the BTNProperty site and application. Available menu options for property search, submission, consultation, to search for professional services ranging from architects, consultants, notaries, interior design, roofers, gardens, roofs, buildings, and personal BTN agents.

The application also provides a mortgage calculator to calculate the down payment and monthly installments on a mortgage plan or calculate the maximum property price that can be purchased from total customer income. Even there, you can apply for a BTN KPR, claimed the process is only 10 minutes.

BTN has quite diverse mortgage products, there are new mortgages / KPA, Mortgage Mortgages, Secondary Mortgages, Take Over Mortgages, Lightweight Loans, and Gaeess Mortgages which are specifically for millennial customers. KPR Gaeesss was released since October 2018 targeting millennials aged 21-35 years. Advances start at 1%, free of admin fees, a fixed interest rate of 8.25% for two years, a 50% discount, and various tenor up to 30 years.

The concept of BTN Property offered by BTN is quite interesting. The abundant data bank is actually very useful for increased utilization in order to mix the products needed by customers. The more relevant the solutions offered from the solutions offered.

“In our opinion, this is a serious problem. There is a gap between the current housing sector and developments in society, where the productive age is now increasingly dominated by millennials who are slightly different in habit and service needs. We as the main players [in housing finance] must understand very well with this condition, “said BTN President Director Pahala N Mansury as quoted by WartaEkonomi.

Expectation for the Government

Banking products such as those offered by BTN can be a silver lining for financial access in the Kiwari generation. But the real hot ball is in the hands of policymakers. Strict regulation is the key to show the government’s support for the current generation to have affordable housing in terms of price and distance.

Property observer, Alviery Akbar explained that currently the central and regional governments still own the largest land area in the city. That is why further intervention on this issue can only be made through regulation. The Associate Director of Residential Sales & Leasing at Colliers International Indonesia said that strict regulations are the key to affordable housing not being undermined by speculators.

“Therefore, you need to intervene through government regulations specifically to create housing for the younger generation with very strict requirements to avoid investors/speculators. The role of banks that provide KPA / KPR can be intervened by selecting buyers according to specified requirements,” Alviery said.

The DKI Jakarta Regional Government has given an example of how regulatory intervention is needed to solve problems in the property sector. This is reflected when Governor Anies Baswedan signed Governor Regulation Number 132 of 2018 concerning Management of Owned Apartment Management in late 2018. Through this regulation, the government patches legal loopholes that are often played by developers through the withdrawal of fees or other management.

Plans on paper are always easier than they are implemented and compiling policies will always coincide with political interests. If local and central governments decide to make housing affordable for the younger generation, Alviery said the government must find another way for some residents who might lose their homes due to government projects such as people living on riverbanks or those affected by infrastructure development.

Relying on the private sector is like a longing for the moon. The high-price land and the very commercial character of property developers are the main reasons behind the absence of property price under Rp500 million built by private developers.

“Every inch of land is very valuable even if you have to build a residence, it is more profitable for the upper-middle market that will bring maximum profit,” Alviery added.

Despite the government’s role, technology in the property industry continues to develop. Even though they are yet to solve the main problem, the Kiwari generation can at least utilize the current technology to obtain credit or simply access essential information before buying a residence offered by some prop-techs and BTN.

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Original article is in Indonesian, translated by Kristin Siagian

Singapore Based Startup WhatsHalal to Arrive in Indonesia with Halal Certification System

The halal business prospect in Indonesia is getting promising. It’s not only for the local business but also captures other global players.

WhatsHalal is one of the global players with interest in this sector. Based in Singapore, WhatsHalal is to enter the Indonesian market with services focus on halal certification system for food and beverages.

The government action to require halal-certified products in October 2019 under Law Number 33 of 2014 concerning Halal Product Guarantee is a great opportunity for WhatsHalal to focus on its services in Indonesia.

Blockchain technology

WhatsHalal has a platform that simplifies the end-to-end process of halal certification through blockchain technology. With this platform, WhatsHalal claims to be able to shorten the time needed for merchants to certify products and cut costs needed during the process.

Simply put, the blockchain technology on WhatsHalal platform allows a product to be tracked and recorded its halal level from farmers’ harvests, manufacturing processes, restaurants, and retailers, to consumers. In other words, the energy, cost, and time to test the halal content of a product can be saved because everything has been aggregated into the blockchain.

“The current halal certification process is very time consuming and requires a lot of paperwork. Starting from halal certification registration, testing, inspection and auditing of products and processes, to the approval and granting of halal certificates,” WhatsHalal’s Founder and CEO Azman Ivan Tan said.

The use of blockchain for halal certification is based on the amount of data collected, stored and processed in the certification process. In addition, the use of the blockchain aims to encourage aspects of transparency and security of their services.

“We believe the use and implementation of the blockchain technology still in its early stages. As there are many applications of this technology in other industries in the future, the use of the blockchain will become the main standard in terms of security and supply chain that requires trust,” Azman added.

Arrival in Indonesia

In fact, Indonesia is the largest halal food consuming country in the world. Stated as the largest Muslim population, the velocity of money for halal food in Indonesia annually reaches US$ 173 billion.

The obligation to hold halal certificates for all producers, including SMEs, is one of the ways the government boosts the growth of halal products in the country. No wonder WhatsHalal, which currently only operates in Singapore, immediately peddled its services in Indonesia after the second quarter of 2020.

“Our platform can also help merchants measure the halal content of their products for export, thereby helping business decision making and adding value in terms of production and sales of halal products,” Azman wrote to DailySocial.

Before officially launched in Indonesia, WhatsHalal made its first steps by joining the acceleration program of Plug and Play Indonesia. In addition, they also just announced their success in obtaining initial funding with an undisclosed value.

Furthermore, Azman said that his team is looking for collaboration to work with the authorities in Indonesia such as the Indonesian Ulema Council, the Halal Product Guarantee Agency (BPJH), and several stakeholders to pave their way.

“We have some good partners and contacts of companies and local organizations in the halal product network. This will help the implementation of our platform for big players and SMEs in Indonesia,” he added.

SMEs as significant target

It’s not surprising when Azman mentioned SMEs due to its large number in Indonesia. The JPH Law indeed obliges SMEs, as well as corporations, to comply with the implementation of this halal certification. This actually raises another problem for SMEs due to the time-consuming and high-costing process.

WhatsHalal took this as an opportunity. Due to a large number of SMEs in Indonesia at almost 60 million and only 8 percent go online. With the all-digital WhatsHalal platform and the government’s push to require halal certification, Azman is confident that he will succeed in Indonesia.

“Indonesia’s halal industry has great potential that local and domestic players are yet to realize. Therefore, we thought the rise of halal certification implementation and obligation is to drive the Indonesian market needed to become a global giant of halal products and support the development of the entire industry,” Azman said.

WhatsHalal’s arrival will enrich the digital ecosystem which focuses on the Islamic economy and halal products in Indonesia. In addition to Islamic financial products, halal food and beverages and the Umrah marketplace are the most potential sectors to be worked on in the country. With the increasing business based on sharia economics and halal products, WhatsHalal has at least succeeded to have the right momentum.

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Original article is in Indonesian, translated by Kristin Siagian

Application Information Will Show Up Here

Five Pivot Strategies from Akseleran, Moselo, and Kata.ai

Building a startup is not just a matter of creating traction and gaining as many users as possible. A true startup is well-known with a culture that survives through the concept of “fail fast, learn fast”.

Therefore, what happens if the startup business that you develop does not get the expected traction? One of the answers is a pivot.

Changing business models, transitioning to different services, or being called pivots is no longer a new way in the startup industry. Some startups in Indonesia have done this, starting from 100 percent pivot by changing company brands and platforms to changing the type of service.

When you decide to pivot, many questions will arise. Starting from what kind of things to prepare, things to be avoided, and how to begin.

In order to answer the question above, DailySocial summarizes various tips and strategies for pivots based on the results of our interviews with Kata.ai (pivot 2016), Akseleran (pivot 2017), and Moselo (pivot 2018).

For the record, these tips are not sorted by the sequence of steps.

Communication with stakeholders

All agreed that startups must communicate with stakeholders if they want to do a pivot. Indeed, the most important ones are the investors and the company team.

Kata.ai’s Co-founder and CEO, Irzan Raditya said communication is important to provide understanding and awareness for investors and teams. There should even be a break between making plans and starting pivoting employees.

“Do the right communication, especially investors to make sure you get the support from the shareholders to support and give a clear understanding of why you pivot,” Irzan said.

As for Moselo’s CEO Richard Fang, startups should avoid one-way communication about the reasons and goals of the pivot. That is, every employee has the right to express their perspectives and concerns about this pivot.

A clear and sustainable business model

Making a business transition is a major step that requires full commitment from both the organization and other stakeholders.

Also, for Irzan, before meeting investors, startups should ideally have a clear and sustainable business plan to ensure this new business model can survive in the future.

“First, we have to research before meeting investors. [After that], we were assisted by one of our investors to work on the direction. We must emphasized that when meeting investors, the plan should be clear and have the option of going where to pivot,” he added.

As an example, Kata.ai, which was previously named Yesboss in 2015, offers a personal virtual assistant service with the concept of conversational commerce. In its journey, this business model is considered less scalable and has a wide impact.

Thus, the company pivot and the following year by becoming an Artificial Intelligence (AI) enabler focused on Natural Language Processing (NLP) technology.

Product-market fit is fundamental

The most common reason we’ll ancounter while interviewing pivoted startups is: products and services are not developing, or the traction grow slowly.

Above are some valuable lessons for Akseleran that product-market-fit is a very fundamental point for the survival of startup businesses.

Akseleran started its business as a solution to channeling loans to SMEs in the form of equity participation. After six months of release, Akseleran decided to pivot into P2P lending because of the slow distribution. After the pivot, Akseleran focus on the same target market, SMEs.

Akseleran’s co-founder and CEO Ivan Nikolas Tambunan revealed that the Indonesian market is quite receptive to equity-based funding. With the slow distribution, it makes Akseleran products less scalable and considered not market-fit.

Ivan also added, when the developed product has not been validated in the market when running the pivot process, startups should refrain from adding new human resources.

“At first, we have to give full information about the product roadmap and the business model. Therefore, they understand the changes. Well, to facilitate motivation and stay in one direction, it’s good for [the team] to start small,” he said.

Focus on the target market, not feature

Another point that should be noted for anyone who is building a startup is how important it is to focus on what the market needs, not what the company wants.

No matter how cool or sophisticated a product or service is, it will be useless if consumers are reluctant to use it.

This was experienced by Moselo who was originally a startup commerce chat provider for creative products. Richard Fang believes that this is often the case with startups who are just starting out.

He admitted that initially, his team was too focused on developing features, then forget the target market. When making a pivot into a marketplace that offers creative products, the company finally begins to focus on recognizing the right target market.

In addition, he said, the pivot that took time from August-December 2018 will actually make the company more relevant to consumers and businesses can be profitable.

“So what we did [during the pivot] was to sharpen Moselo’s target audience. We look for solutions that are appropriate from our data collection. Also, recognize the pain-points of the target because this can be a source of income for the business,” Richard added.

Measuring the limit of pivot success

Don’t ask how many startups failed to pivot. Lots.

Now, as startups, it is very important to know the extent of our limits to ensure that the pivots are run successfully or vice versa.

As we interviewed the three startups, each has its own parameter to measure the pivot success. Generally, it is the number of users or Gross Merchandise Value / Volume (GMV).

In terms of Kata.ai, Irzan mentioned after the pivot in 2016, the company has experienced business growth of three to five times, even already obtained profits in 2019. In addition, Kata.ai also has corporate customers from large-scale companies.

“Speaking of startups, talk of surviving. We have data and see which parameters can be improved. As an AI conversational startup, we look up to user engagement. Previously, we only have tens of thousands, now millions of users. Revenues also increased,” he said.

While Moselo pivots to get significant traction. Therefore, the number of transactions, the number of customers, and GMV will be the main parameters.

“Since the pivot, we have raised 320 percent GMV growth with users reaching up to 50 thousand. We continue to track the parameters in order to know whether this initiative succeeded or failed,” Richard said.

Similar to Moselo, Akseleran validates the action of this pivot with traction. Based on the company data, Akseleran can only distribute Rp2 billion funding while it was still an equity-based loan platform.

“In order to have a product-market fit, we validate it with traction. After turning into P2P lending, we have distributed more than Rp1 billion in the first month. Then it increased to Rp30 billion in six months. This validates whether the pivot is working or not.” Ivan added.

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Original article is in Indonesian, translated by Kristin Siagian

XL Axiata to Shut Down XL Tunai E-Money Service

XL Axiata (XL) cellular operator is to shut down XL Tunai e-money service after eight years of operation. This decision was taken as the difficulty to grow amid intense competition with other digital wallet players.

Regarding the shutdown, XL has conducted socialization with its customers via SMS. The written statement: “Dear Customer, your XL Tunai service will be terminated on 28/02/2020 due to your balance at Rp 0”.

Furthermore, another SMS stated: “Dear Customer, we are to re-inform you that XL Tunai-in balance / cash-in has been closed as of 12/02/2020. Your balance can still be used for transactions through *808#”.

A familiar source told DailySocial, XL Axiata’s CEO Dian Siswarini said that the service termination referred to the termination for balance top-up or cash in.

“Termination balance top-up is to stop money circulation. We really plan to shut down XL Tunai, but it can’t just be, because we have to get approval from Bank Indonesia (BI) as the issuer,” Dian said.

There are no further details regarding this shutdown. Dian said that she was still discussing with BI regarding the mechanism of closing its services.

XL Tunai was launched in 2012 and currently has 2 million users. Just like other e-money services, XL Tunai can be used to send and receive funds, pay bills, and buy tickets.

Challenging not to be agnostic

One of the biggest challenges for operators in the e-money business today was to shift banking domination. It’s getting harder when GoPay, OVO, and solutions from digital services increasingly exist.

Operators are considered to have failed to boost the users’ growth and e-money transactions due to a lack of merchant inclusiveness and ecosystem. The market share is limited to only customers.

Of the total 56 million XL customers, only 2 million are using XL Tunai. Telkomsel, with the largest customer base of 167 million, only acquired 20 million users – only half of them are active in transactions.

It’s a strategic step when T-cash decided to become an agnostic e-money platform at the end of 2018. It’s intended to become a platform that is free to use by anyone, without having to be a Telkomsel customer. T-cash and server-based e-money services run by state-owned banks have now merged into LinkAja.

Based on the 2019 Fintech Report, GoPay is currently the most used digital wallet of 83.3 percent, followed by OVO (81.4%), DANA (68.2%), and LinkAja (53%).

The fall of cellular operator’s digital business

Since 2018, XL Tunai operations have been transferred to its parent company, Axiata Digital Services. According to the latest news, the transfer was made so that XL could focus on its main business as telecommunications provider.

This is actually a strategy to remain efficient as a group, especially after XL failed to build Elevenia as an e-commerce joint venture with SK Planet. In the end, all of the blue operators’ digital businesses were left entirely to Axiata Group.

“We do not plan to substitute XL Tunai with a similar new service. The new plan [digital business] is actually there, but now it is handled in groups by the holding company,” he explained.

XL is not the only one failed to build a digital business. Indosat Ooredoo experienced the same failure. The company launched Dompetku to be merged into PayPro in the midst of 2017, also closed the Cipika marketplace because it did not want to keep burning money.

Reflecting on the issue above, telecommunications operators actually have a great opportunity to create new revenue from digital business. Operators have a large customer base and extensive network infrastructure. Its position as a telecommunications operator is advantageous because it must stay ahead of technological developments.

On the other hand, operators should move quickly in the face of competition with Over-The-Top (OTT) players. The growth of the telecommunications industry continues to fall and the cellular business is no longer expected. In other words, they must maintain profitability while continuing to build networks.

Although starting to refocus on the cellular as its core business, telecommunications operators still need to prepare themselves for the next 5-10 years to face the digitalization era.

What should be sought together is how the telecommunications industry finds the right business models and strategies in running digital businesses in the future, including finding capable talents to develop digital businesses.

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Original article is in Indonesian, translated by Kristin Siagian

Classifying the Centaur Startups in Indonesia

Centaur or aspiring unicorn is commonly used to call startups that have reached valuations of more than $100 million (1.4 trillion Rupiahs) and under $1 billion (14 trillion Rupiahs). One way to measure valuation is based on funding obtained from investors.

The rapid development of the Indonesian ecosystem has brought many startups to the later stage funding – series A round or above. The good implication is, many Indonesian startups have succeeded in holding the centaur degree today.

Without a specific list, according to the Temasek report, Google, and Bain & Company there are more or less 70 centaur startups in Southeast Asia. As for Indonesia, based on research conducted by DSResearch earlier this year, there are at least 27 startups, most of which have been confirmed to have valuations above US$ 100 million.

Listed below the centaur startups:

Vertical business analysis

In terms of business verticals, the scope is quite diverse even though it’s dominated by fintech and e-commerce. The trend is quite similar if you look at the list of existing local unicorns, 3 out of 6 players are in the e-commerce sector. Meanwhile, based on the business model a.k.a the revenue streams they relied on, the distribution is quite balanced, there are 13 startups implemented the B2C model, 10 startups in the B2B model, and the rest (4 startups) are targeting both through B2B2C.

In terms of B2B models, there are three fintech lending, two SaaS, and one each for the marketplace, logistics, media, and fintech payment. Although each of them offers services to businesses, some are closely related to transactional businesses at the consumer level.

The p2p lending for example, even though the funds collected from the players distributed to SMEs, their funds are still collected from individual investors. The developed platform is intended for anyone can access the capital flow and act as an investor even though (maybe) it does not provide direct profits because the interest on loans and other costs is charged to the borrowers.

It’s similar to Moka in the SaaS sector. Although the presented features are to embrace micro-businesses, applications, and road services to accommodate the needs of consumer transactions at offline merchants. Its business regulates transactions and cash flow within.

In terms of B2C, it is even clearer because it charges fees to consumers using the products or services. It’s no doubt the buy and sell based business, financial transactions or subscriptions model become the most widely developed.

Market momentum

The fundamental reason that makes successful centaur businesses is market readiness. If only the penetration run in 5 or 10 years ago, the results might not be this significant. Take Payfazz for example, as one of the startups with quite fast business acceleration.

Payfazz application allows partners (the average shop owner) to serve various virtual items sales, such as balance top-up, electricity tokens, insurance payments, money transfers and so on. According to Kemenkopukm, there are around 64 million SMEs in Indonesia with 46.27% engaged in trading, including stall owners. In terms of customer community, the services provided are familiar with daily needs. Economic value is spinning fast in related commodities.

The big pie is now being fought over by other giant digital players, such as e-commerce platforms flocking to strengthen partnership programs with kiosk – Bukalapak, Tokopedia and now Shopee.

Online shopping has become a culture that gives good impact on e-commerce in providing more specific services. For example, what HappyFresh did through the application that allows the public to get guaranteed fresh food. However, the GMV projections for this business will continue to increase to US$ 82 billion by 2025 .

It is very clear on fintech sector, at least 92 million adults in Indonesia are yet to experience financial or banking services (unbankable) will be the potential market.

The right direction

In fact, more startups have been operating for years but yet to reach the centaur valuation. This phenomenon had become a hot conversation, because of the funding gap issue. As the startups that have passed early-stage funding failed to convince later-stage investors.

Furthermore, the numbers presented in the metrics become important for investors. And those numbers will increase sharply whether the business can truly accommodated the necessary stuff for many people, no matter how sophisticated the solutions offered.

The founder intuition to execute the business in the right momentum is one of the keys to the result of 27 startups might soon catch up with their seniors, joining the unicorn line.

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Original article is in Indonesian, translated by Kristin Siagian

Kotoko to Accommodate Independent Retail Brands with Offline Store

Founded in Singapore in 2019, Kotoko is a startup engaged in retail and technology that provides online and offline ecosystems for independent / Direct-to-Consumer brands in Indonesia to market their products to more consumers. The company received seed funding from Antler.

Kotoko’s Co-Founder & COO Kanta Nandana who was a former Country Manager at Luno Indonesia told DailySocial that the business idea was based on Cynthia Krisanti, the Co-Founder & CEO’s personal experience who had difficulty finding offline stores in strategic locations at affordable prices.

“This issue also happened to other friends with online businesses in Fashion & Accessories. The current solution available is to rent an offline store with a high cost and inflexible rental periods.”

For this reason, Kotoko provides a solution for independent brands in Indonesia to have offline stores in strategic locations in Indonesia at affordable prices and flexible rental terms through Kotoko multi-brand stores.

Kotoko is to rent a place in strategic commercial areas, such as shopping centers, malls, and shophouses, divide this place into several smaller areas, then rent it back to several brands, so they can share the place with other famous brands to market their products.

“The monetization strategy is to charge a monthly membership fee and a sales commission discount for brands interested to join,” Nandana said.

First brand store in Plaza Indonesia

Kotoko brand store

Supported by the experience of its founders in finance, retail, and technology, Kotoko has several services that brand partners can use to improve their business, including Kotoko Multi-Brand stores, Kotoko Chapter, Kotoko Block, and Kotoko e-commerce sites.

“Kotoko’s e-commerce website can be used by consumers as long as they are inside the Kotoko offline shop to check product information, price, size, and material information using the Scan & Shop feature on mobile phones,” Nandana added.

They can also access Kotoko.shop via mobile to buy products and complete payments online (mobile payment). Products will be sent directly to the customer’s address.

“Kotoko has currently embraced Indonesian independent brands in the category of Fashion & Accessories and Food & Beverage. In the future, Kotoko targets other categories such as Health & Beauty, Household Goods and Furniture, “Nanta said.

In specific, the solution provided by the company for independent brands is claimed to increase revenue through marketing collaboration, promotion, and partnership programs. Kotoko also seeks to increase distribution and marketing channels for brand products incorporated through retailer partners.

Currently, Kotoko has curated around 60 well-known independent brands with a cumulative number of 1 million followers on Instagram. The company has opened the first multi-brand store in Plaza Indonesia and is currently preparing to expand to the first-tier cities outside Jabodetabek, such as Bandung, Surabaya, Makassar, and Bali.

“We have a fundraising target this year which we plan to use on expanding business and increasing the number of brands to join,” Nandana said.

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Original article is in Indonesian, translated by Kristin Siagian

Beware of Private Data Sharing

The government officially submitted the draft of Personal Data Protection Act (PDP Bill) to the Indonesian Parliament. This draft will be discussed immediately after the completion of the Omnibus Law Act.

Based on the draft as of December 2019, the PDP Bill contains 72 articles and 15 chapters governing the definition of personal data, types, ownerships, processing, exceptions, controllers and processors, transmissions, authorized institutions that regulate personal data, and resolution. In addition, it regulates international partnerships and sanctions imposed for misuse of personal data.

While waiting for the regulation to be ratified, whose authority is in the People’s Representative Council (DPR), we need to know more about how to interpret in daily life. What is the impact before and after the regulation for the public?

Understanding the types of data based on the PDP Act draft

The PDP Bill defines personal data as any data about a person, whether identified and can be identified separately or combined with other information, directly or indirectly, electronic and non-electronic systems.

Types of personal data are divided into two, the general and specific data. The general category includes data that can be accessed through public services or listed in official identity. For example, your full name, gender, nationality, religion, and personal data must be combined to make it possible to identify someone.

Meanwhile, specific data is data that is sensitive to the safety and comfort of the life of the owner of personal data, namely health data and information, biometric data, genetic data, sexual orientation, political views, crime records, child data, personal financial data, and/or other data in accordance with statutory provisions. In order to get these data, approval from the owner is necessary.

What should be appreciated and fixed

SAFEnet’s Executive Director, Damar Juniarto said, the PDP Bill refers to one of the fundamentals of the 1945 Constitution article 28 paragraph G stated the philosophical basis of personal data protection, the guarantee of citizens’ self-protection.

Therefore, there are three things must be stated the PDP Bill. The right to personal, family, honor, dignity and property protection; the right to security; and the right of protection against the threat of fear to do or not do something.

The assessment he made for the PDP Bill contents was a progressive step in ensuring the certainty of the citizens’ self-protection. “SAFEnet welcomes the presence of the PDP Bill which will soon be discussed at the Commission I of the DPR RI,” Damar said in a written statement.

This bill, he continued, succeeded in formulating the concept of upholding data sovereignty; outline a longer draft of April 2019 in specific personal data; provide recognition of important basic rights in the principle of the right to privacy such as the need for citizen consent in data collection, the right to correction, and the right to withdraw data; emphasized on the time limit while residents withdraw the data; and sanction violations.

On the other hand, the part that needs improvement is the dimming of important issues that have been a public concern, such as profiling issue, illegal tapping by state institutions and corporations, alleged buying and selling of personal data by state institutions and discriminating sanctions against individuals and corporations that committed violation.

“Profiling can only be stopped whether residents raise objections as contained in article 10. Frankly, in SAFEnet’s view, this is not enough. Profiling must be included in specific personal data because it is an important protection against the threat of oneself and protection of the right to do or not do something.”

Illegal tapping, defined as an effort to acquire personal data by planting spyware on smartphone devices, collecting data through an unknown cloud, or applying AI in the form of facial recognition technology.

Discrimination of legal sanctions threatens an injustice feeling of the community for the right to privacy. The ITE Law, which was issued over 10 years ago, has problems with the number of convicted citizens and criminal proceedings during unfair law enforcement and justice.

“Reflection on the implementation of digital law needs to be taken into consideration in determining appropriate legal sanctions for those who commit personal data violations.”

He thought in general, the PDP Bill narrowed the right to privacy to the extent of protecting personal data. Therefore, what should be the scope of this law is reduced to the issue of personal data. Whereas today, data is closely related to the lives of the human owners and when abused will endanger the lives of these people due to the possibility of crime.

“There is a right to security attached to it [PDP bill]. Therefore, it might sound like the PDP bill emphasized personal data definition as merely a commodity. Whereas personal data is not just a commodity, it concerns the virtual human dignity, the PDP Bill must protect the human being involved, not only the data.”

Once passed..

Once the regulation passed, the greatest power you have for companies that collect your data and liability is to request for data removal. On the other side, the greatest right – or perhaps the most competed – is the ability to stop companies from selling your data to other parties, such as advertisers.

Selling data has been the most irritating issue for consumers. The condition does not apply when you consciously enter a photo in your Facebook account or enter your home address in the e-commerce application. Unlike the case, if they cash it, therefore, other companies you’ve never visited create a profile without your knowledge or approval.

The word “sell” does not mean literally in the form of money. When the company gains something or other benefits from your data for others, it can be categorized as selling. Exceptions only apply when the company sends data to “service providers” if the e-commerce site shares your credit card number and processes payments to complete the sale.

Data selling is a very sensitive issue for technology companies, especially giants like Google and Facebook, and the time when the Cambridge Analytica scandal hit Facebook. Data is the new oil.

The PDP bill also applies to office buildings that often request visitor data and photograph faces. This regulation accommodates data collectors to declare their purpose as retrieving data and guarantee its safety. As often the issues of data leak anywhere and anytime.

Global company concern of data security

Last year, Digital Rights Ranking has created a report titled The 2019 Ranking of Digital Rights Corporate Accountability Index, a piece of basic knowledge for everyone on how concerned global technology companies are about the security of their users’ data.

Of the companies surveyed, some are running the business in Indonesia, which considers this report more or less correlated. As it was mentioned from 24 famous global technology and telco, Microsoft ranked the first, followed by Google and Verizon Media. Next, from telco are Telefonica, Vodafone, and AT&T.

There are 35 indicators for the 24 companies that were evaluated, examined the matter of commitments, policies, and practices that affect freedom of expression and privacy, including corporate governance and accountability mechanisms. This index score represents the extent to which companies meet minimum standards. There are several companies that score above 50 (on a scale of 100).

Overall, there has been some progress, although some issues remain since the Index was released in 2015. Does everyone still lacking basic information about who is controlling their ability to connect, talk online, or access information, or who has the ability to access their personal information in any circumstance.

The government in some countries is quite responsive by issuing various supporting regulations. Whereas the company action to take decisive steps in respecting user rights has not been well conveyed. As a result, most companies still fail to reveal important aspects of how they handle and secure personal data.

“Despite new regulations in the European Union and other countries, most global internet users still lack basic facts about who can access their personal information under what circumstances, and how to control their collection and use. Some companies have been found to disclose more than is required by law,” as stated in the 2019 RDR Index report.

What kind of data collected and how to stop it

Facebook and other technology companies are basically trying to create a data bank, by taking as much user information in one’s profile. The goal is none other, looking for inspiration for what products are and will be needed by consumers, to have it on target when it’s launched.

Fintech applications are more or less similar. Why can they withdraw funds quickly? because there is digital data made accessible by users to be analyzed by smart machines. Before the FSA intervened, they could access various data such as photo galleries, contact lists, SMS, calendars, cameras, microphones, and others that were actually less relevant to the application function.

Usually, there will be pop-up notifications for various access requests that are unknown or explained after downloading. Unfortunately, if one of the access requests is intentionally denied – applicable to the majority of apps – there will be flaws appeared that interfere with the user experience. Eventually, it forces the user to allow all requested access.

Due to the rise of illegal fintech players and victims, user’s smartphone data access is now limited to only cameras, locations, and microphones. All three are permitted by regulators for legal fintech players.

The way to find out what data is requested by the application is quite easy and available for check. On Google Play, try to check at the bottom of the “About this app” section, there is detailed information related to the application. There will be “App permissions,” and choose to “See more.” There will be a clear statement of access to any information requested by the application.

In general, companies will state privacy policies on their sites at the very bottom. It consists of data they take from users, the purpose of use, and its commitment to protecting user privacy from third parties.

Unfortunately, due to the insignificant location, it often passed the user’s sight. The long arrangement with a small size font only creates more reason for users to not take a look and enjoy reading it. Even though the information conveyed is very important.

Gojek

In the Privacy Policy section, they explain the details of data collected directly from users or their mobile devices, every time they use the application or visit a website, and information collected from third parties.

All the information is listed on the Gojek site. Some of these include name, address, date of birth, occupation, telephone number, fax, e-mail, bank account, credit card details, gender, official identification number, biometric information.

In one of its clauses, Gojek opens the opportunity to withdraw data with reasonable notice in writing. The consequence that users receive is that the account is terminated and cannot use applications or services for the future.

Tokopedia

Tokopedia is no different. They collect data submitted independently by users, unlimited data when filling out surveys on behalf of the company, interacting with other users with message features, product discussions, reviews, ratings, detailed transaction data. Continues, real location data such as IP address, Wi-Fi location, geo-location, cookie data, pixel tags, device data used to access the site, and other data obtained from other sources.

On further exploration, users are not given the freedom to remove data. Tokopedia will store information as long as the user account remains active and can carry out removal in accordance with applicable legal regulations.

Bukalapak

Meanwhile, Bukalapak opens the submission of data removal by attaching valid proof of identity and the reason for the request for removal. Bukalapak is to grant the request if it meets the requirements requested by the company.

Following these three applications can give a clear picture that the existence of this PDP bill is so important to give users full control of their data. Indeed, companies have an obligation to protect users if there is potential for fraud, but don’t data owners have more control over it?

Reflecting on global technology companies, some of them provide features that function to close data access utilized by third parties. Facebook and Google have released it, even though the intensity is still doubtful, but now users are given control to restrict access to their data.

Google (including YouTube)

Google’s main revenue is advertising. Last year’s advertising revenue from YouTube reached $15 billion, more than the combined advertising revenue from three private TV stations in the U.S., namely ABC, NBC, and Fox. Google claims to operate its ad network internally. However, if you want to stop Google from sharing data with its own division, there is a tool for it. This option is called “Ad personalization.” Simply slide the button to turn off the personalization.

Facebook

Whether this company does or doesn’t sell user data, this social media platform gives third parties access to a number of user information. For example, date of birth and email address. Spotify allows you to register as a user if you register through Facebook.

In order to close the access, you just have to go to the Facebook page. Then go to Settings > Apps and Websites. You will find which third parties can access Facebook data, just click which one will be disconnected.

Twitter

Twitter provides options for all users who want to leave custom personalized ads. You do this by going to the Settings and privacy page > Privacy and safety > Personalization and data and the slide button left to turn it off.

Spotify

The music streaming application claims to not so sure whether the way they share data is counted as sales when it refers to regulations in California. However, they provide a tool for users who want to stop Spotify from advertisers by turning off the “Tailored ads” toggle in the Privacy settings page. This tool allows Spotify to use any data from your Facebook account for target ads.

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Original article is in Indonesian, translated by Kristin Siagian

Visinema Receives Rp45.5 Billion Series A Funding Led by Intudo Ventures

Today (2/26) Visinema announced series A funding worth of US$3.25 million or equivalent to Rp45.5 billion. This round led by Intudo Ventures, followed by the previous investors, GDP Venture and Ancora Capital. In terms of seed, the company had a GDP investment worth of US$2 million.

Additional capital raised is to be focused on building capacity in terms of animation content production, talent acquisition, and international expansion.

“The Indonesian film industry has experienced rapid growth in recent years, both in feature films and other unique content formats, and there continues to gain significant demand for high-quality local content. With our self-produced Hollywood-caliber content, we believe that Visinema is well-positioned to convey more Indonesian stories to the audience, both local and worldwide,” Intudo Ventures’ Founding Partner, Patrick Yip said.

Bekraf, on one occasion, said, the number of Indonesian cinema audiences has grown 230% in the last five years. Followed by the number of cinema that grown rapidly in the last three years, from 800 to 1800 screens. While quoting MPAA data, Indonesia is now ranked 16th for the world’s Box Office market share. The resulting market value reaches $345 million.

In fact, with the work of local filmmakers, several films managed to seize the attention of millions of viewers. In 2016 for example, there are 30 million people acquired from the top 15 films. The data collected by Ideosource explained the well-filled value chain in the Indonesian film industry. Both in terms of production to distribution.

List of companies in the value chain of the national film industry / Ideosource

In the report published in 2017, also explained the amount of funding received by the industry. It is said that 50% of investment is targeting various companies in the film industry, not only the IP (intellectual property) owners but also the marketing and distribution channels, with the other 20% poured on filmmakers or independent producers

Visinema is to build the whole production ecosystem

The current market motion is enough for players in the industry to be optimistic. Wearing an ambitious vision, armed with available resources, Visinema wants to develop a comprehensive studio ecosystem. The aim is to help end-to-end film processes, from concept advancement, talent development, production, distribution to monetization.

The company currently has sub-organizations such as Visinema Music which produces music for films; Visinema Campus for creative recruitment and labs; and Skriptura as spaces for writers. Not only appearances in theaters or television, the produced film and serial content also began to be distributed through digital channels such as Netflix, iflix, and Goplay.

Besides being favored by consumers due to convenience, the on-demand video platform clearly provides better benefits for film creators as a fairly efficient distribution channel. Especially in the midst of cross-platform competition which now has reached over ten fingers, one of the strategies is that each player wants to present their original series. Through their work, such as Filosofi Kopi The Series, Visinema also gained profits.

The economic value produced from films is quite large – along with the increasing quality. Below listed the biggest films achievements of local studio productions based on revenue:

the highest record of local film revenue in the last two decade / Statista

Visinema’s Founder & CEO, Angga Dwimas Sasongko founded the company in 2008. Through the successful story of Nanti Kita Cerita Tentang Hari Ini and Keluarga Cemara, this studio is getting well-known by the public.

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Original article is in Indonesian, translated by Kristin Siagian

What Happens If Gojek to Merge with Grab

The rumor of potential merger between the two Southeast Asia’s giant on-demand players Grab and Gojek backs on air. After The Ken (paywall) and Tech InAsia (paywall), now The Information (paywall) also informed the “first talk” of the issue.

It was said that the management of the two companies had met over the past two years and had intensified in recent months, including news of a meeting between Grab’s President Ming Maa with Gojek’s Co-CEO Andre Soelistyo.

Furthermore, reportedly there has been no silver lining of the two companies valuations and who will be the dominant one.

The basic question is why. Aren’t they both want to win the Southeast Asian market? The answer is clear. The key to domination is a monopoly and this is not one unique case.

“Burn Money” and profitable plans

In the last 4-5 years, the battle between players in this industry has been characterized by the “burning money” strategy for the sake of a very fast market acquisition. Despite having a very large market in Southeast Asia, both have not yet reached the point of a profitable business. With investor funds wearing down, by 2020 promos have been decreased, both companies have to “change the game”. They must reach the level of profitability and satisfy the investors.

Uber has made it in China, Russia, and Southeast Asia. The sense of being unable to compete created a win-win solution through acquisition – with significant value of shareholder as one condition. Didi in China was formed as a result of the merger of two big local players.

The rule of monopoly is to create one winner. As for the investors that back the company.

Monopolize Southeast Asian market has been quite delish — Monopolizing Southeast Asian market has been quite delish

Monopolizing the Southeast Asian market, the potential merger between Gojek and Grab has been quite delish. Both have dominated the on-demand transportation market, food delivery, and online payments (GoPay and Ovo). The value may be greater than the two companies combined (more than $ 20 billion).

Imagine if both of them monopolized the market. There is no longer a price war. There is only one cost that must be paid by consumers and it will not be cheap in order to achieve economic value. There are not many choices left (except taxis, but Blue Bird and Gojek have just agreed on a strategic alliance).

Competition is good for consumers, but not for the players in it. What happens if the position is reversed. No more competition?

A concrete case is when Didi acquired the Uber business in China in 2016. After the acquisition, Didi controlled 90% of the market. In 2018, a complaint often comes from the driver’s partner as their incentive declining.

On the other hand, consumers find it difficult to quickly get a vehicle and it comes with a higher price. The survey in 2017 stated that 81.7% of respondents believed that it was more difficult to get a vehicle than the previous year (when Uber was still operating), while 86.6% considered the price more expensive.

The challenges

There are three main challenges. First, is about ego. As fellow leading players, it’s not easy to combine both companies in one direction. There must be one dominant party. Solving this issue will be a crucial key.

The second is regulatory issues. Market monopoly in Indonesia is listed in the KPPU domain. Usually, this issue is not likely to escape the KPPU examination, but reflecting from other countries’ experience and other cases, as for example Grab acquisition of Uber business in Southeast Asian countries, it all leads to fines. There are no more severe sanctions than this.

The last challenge is on the stakeholders. This is related to driver-partners and consumers. The risk to occurs when there is no longer a competition is a decreasing number of driver-partners (imagine there is only one company on the road) and the service costs in line with the economic unit (read: more expensive as without subsidies).

The bigger question is not about whether Grab and Gojek can merge. The must-asked question is, are we ready to have our various needs of services monopolized by just one company. What would your answer be?

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Original article is in Indonesian, translated by Kristin Siagian

Moka’s Five Year Journey and Its Ambition to be A Super-App Merchant

The increasing number of point-of-sale (POS) players might not be an issue, because the real enemy is the inefficient cash payment. There’s still a lot of homework for every stakeholder to solve many issues regarding business support, particularly SMEs, providing convenience transactions to all customers.

Moka is one of the players in this sector. It is known, not only as POS service but has claimed to be a super-app merchant, followed by its expansion to other verticals in order to support the ‘merchant’ business.

The super-app merchant is a new term the company aims to promote, as the public familiar with the super app term yet focuses only on the products for end consumers.

“In the first three years, we build up our POS service due to its complexity to handle small to big merchants; from POS, management, CRM, inventory. Afterward, in 2019, we scale up with new products, such as Moka Capital, Moka Pay, Moka Connect, and Moka Fresh,” Moka’s Co-Founder and CEO, Haryanto Tanjo said in an exclusive interview with certain media in the office last time (2/20).

Becoming the super app means the company is to highlight collaboration with partners to create an ecosystem. Almost every product vertical in Moka is a partnership result. Haryanto said, to acquire partners, the business has adopted an open ecosystem for seamless API integration.

Moka Capital is a collaboration with a p2p lending company to facilitate merchants for access to capital for business development. The partners include KoinWorks, Taralite, and Modalku. Since established in late 2018, it is said to distribute more than Rp40 billion for 300 merchants. They offer loans from Rp5 million to Rp2 billion with three months to 18 months tenor.

Furthermore, Moka Fresh as a marketplace to provide supply chains for culinary merchants online. The company partners with players such as Sayurbox, Blibli, Greenfields, Diamond, Unilever, Bogasari and ABC. In total, the product has owned more than 3 thousand SKUs.

“Culinary merchant spent 30%-40% on supply chain. However, as a single outlet, how you suppose to bargain with distributors. We want to support this through Moka Fresh, we aggregate order from our merchants to have the best price from the distributor.”

Next, there is Moka Pay to manage payment options in one simple cashier app. Every popular e-wallet is integrated into Moka Pay, including Akulaku and Kredivo.

MRT Jakarta partners up with Moka Connect

The latest announcement for Moka’s product vertical is the partnership with MRT as Moka Connect‘s new merchant. This is a marketplace containing various applications provided by third parties to support merchant businesses of all business scales, including the corporate level.

Examples of applications that already joined are Jurnal and Accurate Online to help bookkeeping, Eatsy to help consumers order food and beverages before arriving at the restaurants. The order will automatically listed in the Moka system, therefore, employees don’t have to re-record orders through the Eatsy application.

Furthermore, Storelogy is a platform that helps merchants create online sites, and GrabJobs is a recruitment platform to find high-risk blue-collar workers due to the high turn-over rate.

“Inside Moka Connect, we invite developers to involve and build applications on the Moka platform. The model is more or less the same as Google Play or App Store consists of many applications available for download. Thus, Moka’s will be seen as highly-recommended by merchants.”

Haryanto continued, “Enterprises have known Moka for the small merchant, it doesn’t seem so nowadays. Enterprises with their own ERP (enterprise resource planning) system, can also use Moka Connect to integrate their POS with Moka.”

Recently, MRT Jakarta announced a collaboration with Moka for this product. Moka Connect will be integrated into the merchant’s POS machine at the MRT station, even though the merchant is using another brand.” MRT can manage transactions from its SMEs, especially MRT and its merchants with its own revenue-sharing system.”

Focusing on growth

Product innovation and service expansion have become crucial things for POS players, in fact, many players in the local arena are also trying to present similar solutions. Besides Moka, there are other startups like Qasir, Cashlez POS, Pawoon, Nuta and the latest Youtap.

Haryanto said the online cashier business is still in its early stage, or yet to mature, that there are many merchants, especially micro, are yet to educate well with the benefits to their business. Business people who have been reached by the digital world are still far behind those offline businesses.

Quoting from the Ministry of Cooperatives and Small and Medium Enterprises (Kemenkop UKM), in 2017 as many as 3.79 million micro, small and medium enterprises (MSMEs) have utilized the online platform in marketing their products. This number is around 8 percent of the total SMEs in Indonesia, which is 59.2 million.

In terms of consumer, Moka noted that the percentage of transactions using cash still dominated the non-cash around 60%. “How to change the mindset of micro-merchants to get online is the hardest question. This requires collaborative efforts with all stakeholders, instead just Moka.”

Because the market is broad and yet to mature, Moka currently installing a mindset to focus on increasing growth. Although, in a business model, SaaS with b2b target consumers, naturally has a clearer unit of economics as to what the roadmap is to lead to profitability.

Another advantage in SaaS business is its higher gross margin, therefore, the income will stay without subsidies. Even if it does, the gross margin will remain large. The main income from SaaS is generally a subscription either monthly or annually, depending on each strategy.

“The question is whether you want profit now or later, whether you still have a mindset for growth. Revenue and profits we earn will be invested in more growth. However, we believe profitability is important. Because in the end, we have to take that way.”

On the same occasion, Haryanto avoids commenting further on the acquisition rumor of Moka by Gojek. He said the same statement as he responded to the public some time ago. “We do not comment on market speculation,” he said at the time, quoting from KrAsia.

He said the company is targeting 100 thousand merchants to join Moka this year, currently, there are more than 30 thousand merchants. Two-thirds of those are engaged in the culinary business, while the rest are from retail and service businesses.

With diverse business verticals, companies are confident to attract new merchants. Although, the POS business is currently Moka’s core business for it is the connecting bridge to other Moka verticals.

Since established in 2014, Moka currently has more than 800 employees and is entirely local talent.

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Original article is in Indonesian, translated by Kristin Siagian

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