InnovationDeloitte

Innovation Ecosystem in Southeast Asia

SEA Internet economy market size (GMV, $B)

SEA internet economy market size (GMV, $B)

Indonesia largest ($27B) and fastest growing (49% CAGR) will be a $100B internet economy by 2025

Percentage of internet users who bought something online via any device in the past month (survey-based)

M-Commerce use amongst internet usersPercentage of internet users who bought something online via a mobile phone in the past month (survey-based)

Digital payment service adoptionAdoption of digital payments increasing, yet usage remains low; lack of widely accepted solutions

SEA unicorns fund-raising ($B) 2016-H1 2018

Most funding went to SEA’s 9 unicorns ($16B since 2016); Grab 1st decacorn($10B+ valuation), less than 20 globally

2015 2018

2025 CAGR

MY5B

8B

21B

19% 16%

PH2B

5B

21B

30% 25%

SG7B

10B

22B

16% 13%

6B

TH 12B

43B

27% 22%

VN3B

9B

33B

35% 25%

ID8B

27B

100B

49% 28%

SEA E-commerce market size (GMV, $B)

Indonesia market hits $12B at 94% CAGR, accounts for more than $1 in $2 spent in the region

2015 2018

2025 CAGR

MY1B

2B

7B

27% 21%

PH0.5B1.5B

10B

42% 34%

SG1B1.8B

5B

22% 18%

0.9B

TH 3B

13B

49% 30%

VN0.4B

2.8B

15B

87% 43%

ID1.7B

12.1B

53B

94% 41%

E-commerce consumer ARPU vs. GDP per capitaAverage amount spent on e-commerce purchases of consumer goods by each e-commerce user in 2018, vs GDP per capita

Credit card ownershipThe percentage of adults aged 15+ who possess a credit card

Penetration of mobile bankingPercentage of internet users that accesses banking services via a mobile device

Use of ride-hailing appsPercentage of internet users that use taxi booking or ride-sharing apps each month (survey based)

ID

86%

76%

2.3%

2%

61%

51%

MY

75%

58%

1.6%

21%

66%

48%

PH

70%

57%

0.6%

2%

54%

40%

SG

73%

54%

1.8%

49%

64%

52%

TH

80%

71%

1.5%

10%

74%

20%

VN

77%

62%

1.9%

4%

50%

45%

W

75%

55%

18%

N/A

41%

30%

WORLDWIDE

Internet economy GMV as % of GDP (2018)

SEA

2.8%

Indonesia

2.9%

Malaysia

2.7%

Philippines

1.6%

Singapore

3.2%

Thailand

2.7%

Vietnam

4.0%

Source: we are social 2019 report

Source: e-Conomy SEA 2018, Google-Temasek report

GMV: Gross Merchandise Value

SEA Trivia

0

10

20

30

40

50

60

46% 45%39%

25%21%

52%

ID MY PH SG TH VN

Multiple players offering digital payment services

Ride HailingGo-Pay (ID)GrabPay (SEA)Ovo (ID)Kudo (ID)e-CommerceAirPay (SEA)

TechApple PayGoogle PayPaypalBanksDBS PayLah! (SG)Mandiri e-Money (ID)

TelecomTelkomsel t-cash (ID)Globe GCASH (PH)TrueMoney (TH)

2.8B

7.1B

2.9B6.5B

2016 2017 H1-2017 H1-2018

2X

$

InnovationDeloitte

E-commerce GiantsMoving into SuperAppsBoth unicorns are Indonesian online market places enabling merchants to set up an online presence on their platforms, selling a wide range of goods and serving a huge range of consumers. Both have since branched out into other services, including ticket sales, payment solutions, and other financial services. Bukalapak also announced expansion plans in May 2019, with the

launch of BukaGlobal to serve overseas markets.

2009

108,487,091

4 Million

Series G - US$2.45B

Alibaba Group, Softbank Vision Fund

2010

81,626,008

4 Million

Series D - US$50M

Mirae Asset, Naver Asia Growth Fund, GIC, Emtek

Year founded

Reported number of merchants

Known funding

Notable funders

Monthly visits to website

Both unicorns started out as ride-hailing companies, but are now on the path of being the “superapp” for Southeast Asia, that will serve all of our everyday needs, from commutes to food delivery to logistics and payments. Grab has had a headstart in expanding to various SEA markets, while Gojek has had a headstart in providing a multitude of services for their users.

2012

144 million

Series H - US$9.1B

Yamaha, Microsoft, Softbank Vision Fund, Toyota

2010

142 million

Series F - US$3.1B

Mitsubishi, Google, JD.com, Tencent Holdings, Visa

Year founded

Known funding

Notable funders

Reported number of app downloads

What do they do

?

Where’s the Innovation

?By pooling together merchants and related services, users enjoy a wide range of shopping categories. With users congregating, more merchants would find it beneficial to come on board.

NETWORK EFFECT

From Tokocash to TokoSwipe to BukaDana, the retail platforms are finding ways to provide e-wallets and other financial solutions for their users, to complement their popular marketplace services.

NEW PRODUCTS & SERVICES

From rides to massages to payment solutions, Gojek has had a headstart in introducing a multitude of services for their

users, keeping them engaged beyond just ride services.

ECOSYSTEM / SUPERAPP EFFECT

From GrabPay to GoPay, both platforms are also finding ways to provide financial solutions for their users, to

complement their retail offerings.

NETWORK PRODUCTS & SERVICES

Moving beyond e-commerce, both platforms also run partner apps that allow offline kiosks to sell their digital products and select products.

NEW CHANNELS

Innovation Ecosystem in Indonesia

The startup funding trends

A breakdown of deals in Indonesia

As investors and corporates alike begin to realise the vast potential of the Indonesian market, investment into startups saw a sizaeble growth between 2016 and 2017, followed with a spike from 2017 to 2018.

Gojek and Tokopedia took a large piece of the pie in 2018, seeing US$1.5B and US$1.1B respectively in investments, followed by Traveloka at US$500M.

*2019 numbers not final

The e-commerce category leads Indonesia's startup investments by a considerable margin, both by percentage of deals and by investment value.

Gojek leads the way in the transport sector in Indonesia, which accounts for a lower percentage of overall deals conducted but holds a considerable chunk of total investment value.

Other sectors account for many of the other deals, but appear to be relatively low value investments.

2015 2016 2017 2018 2019

1.9B

104

104

100

167

127*

1.65B

2.75B

16.6B

10.3B*

Number of Rounds

Funding amount by year in bil (USD)

Source: TracxnSource: Google & A.T Kearny Study

E-commerce Transport Finance Classified Payment Others

Breakdown of number of Deals by %

Breakdown of % of total investment value

42 4 8 10 5 31

58 37 1112

"Source: News, Crunchbase, Tracxn"

"Source: News, Crunchbase, Tracxn"

Innovation Ecosystem in Indonesia

Did You Know?

nes to Watch

Akulaku is an Indonesian financial services provider offering installment plans and loans to users who do not have credit cards. Outside of Indonesia, it is now present in other parts of Southeast Asia like Malaysia, Vietnam and the Philippines. Founded in 2014, it is currently a Series D startup, and has reportedly raised US$220M.

Chinese interest in Indonesia’s fintech and beyond?

Akulaku was founded by two Chinese entrepreneurs who were formerly with Ping An Insurance. With 15 million registered users and 2 million active users, they have managed to garner interest from Chinese investors, including strategic investments from Ant Financial.

Did You Know?Alfamind – Indonesia’s first retail network of augmented reality stores

Powered by MindStores, Indonesia’s leading retail chain store Alfamart has rolled out its partner sales programme in the form of virtual storefronts. Aspiring micro-entrepre-neurs get to customise their stores and choose products that they wish to carry, and Alfamind will handle all the logistics for them when orders come in.

Akulaku has devoted resources into Artificial Intelligence and Big Data to strengthen their risk controls, screen credit applicants and assign risk profiles.

IMPROVING TOOLS AND PROCESSES

With much of Southeast Asia unbanked or underbanked, fintech startups play an important role in promoting financial inclusion through their products and services.

SOCIAL IMPACT

While Akulaku is better known as a prominent online consumer financial service provider in Indonesia, it has also launched other related business streams, like its own e-commerce platform.

NEW PRODUCTS & SERVICES

Warung Pintar is a retail tech company that aims to transform the ubiqui-tous mom-and-pop stores, warungs, into digitally-enabled smart (pintar) kiosks. They were founded in 2017 and has since raised Series B, with total

funding reportedly amounting to US$35.5M.

With more warungs on their platform, it becomes easier for Warung Pintar to offer centralised product distribution services for merchants and also collect data from them.

This gives insights into general trade patterns, which have been difficult to track previously.

NETWORK EFFECT

It’s a captivating story of a young startup trying to uplift society through digitalisation. While Warung Pintar has captured the imaginations of a lot of us, there are many other

retail digitalisation initiatives and partner (mitra) selling programmes targeting the micro-SMEs, helmed by startups of all sizes from Geraiku to Bukalapak, and Alfamart.

SOCIAL IMPACT

Offering merchants a pre-fabricated kiosk clad in a striking yellow, the warung pintar comes fitted with technologies such as digital Point of Sale systems, free

WiFi, digital displays, phone charging points and more.

BRANDING & EXPERIENCE

Financial Services

Agriculture

Retail & Distribution

Healthcare

akulaku Warung PINTAR

Where’s the Innovation

?

What do they do

?

Where’s the Innovation

?

What do they do

?

Others to watch:

Did You Know?

TaniHub is an agritech startup that connects farmers to markets and customers, and also allows farmers to run crowd-funding campaigns through its TaniFund platform to raise money to plant new crop . Founded in 2015, it is currently a Series A startup with a known funding of US$10M.

Finding new possibilities through acquisitions and partnerships

Warung Pintar acquired Limakilo, a platform linking farmers directly to markets and customers, in March 2019. This not only helps farmers reach more customers, it helps warungs sell better by offering a diversified selection of goods.

Given the financial difficulties faced by most small-holder farmers, peer-to- peer lending offers a way out for farmers trying to make a living but do not have that small amount of capital required to do so.

NEW CHANNELS FOR FINANCE

Agriculture is one of the key sectors in Indonesia. In a discussion about Industry 4.0 during the recent presidential elections debate, President Joko Widodo had mentioned Tanhub’s role in revolutionising the agriculture sector.

Farmers in Southeast Asia tend to hold small plots of land that are inefficient and are often impoverished. The proliferation of agritech startups like Tanihub in Indonesia and elsewhere in this region promises to uplift the farmers and help them attain a better livelihood.

SOCIAL IMPACT

Tanihub aims to simplify a farmer’s supply chain and provide them access to markets and finance. Cutting out the middlemen, their platform directly connects smallholder farmers to over 400 small businesses and 10,000 customers.

SIMPLIFYING THE SUPPLY CHAIN

TaniHub

Others to watch:

Superapps want a piece of the healthcare market

Both Grab and Gojek have stepped out to indicate their plans to serve the healthcare sector. Grab had announced in 2018 that they would be entering a joint venture with China’s Ping An Good Doctor. Meanwhile, Gojek has not only partnered Halodoc for GO-MED, they had invested into Halodoc’s Series A round.

Halodoc is a health tech platform based in Indonesia that connects patients with doctors, pharmacies, insurance and more in a single app. Launched in 2016, it is currently a Series B startup, and has reportedly raised US$65M.

Halodoc has identified gaps in the industry (lack of info and inconvenience) and has managed to solve them through online channels. Users can now enjoy a

simple and straightforward experience in a typically stressful process.

WHOLE NEW EXPERIENCE

With more than 22,000 and 1,200 pharmacies on their platform, spanning across 25 cities in Indonesia, Halodoc provides unrivalled access to licensed medical professionals. Users can communicate via chat , video or voice call with these medical professionals on the platform. After consultation, Halodoc

even has your medication delivered by Gojek (under GO-MED)!

END-TO-END SERVICE

halodoc

Others to watch:

Others to watch:

InnovationDeloitte

Did You Know?