Huawei has arranged to acquire a 16.83% stake in Indonesian operator Bakrie Telecom by converting some of the operator’s debt into shares.
Debt-laden Bakrie Telecom issued a 7.6 trillion rupiah ($568.1 million) mandatory convertible bond in 2016 as part of a debt restructuring. Huawei has now decided to convert its holdings of the bond into shares.
With the move, 1.23 trillion rupiah worth of Bakrie Telecom’s debt has been converted into shares.
Bakrie Telecom president commissioner Anindya Novyan Bakrie toldthat the conversion will help improve the company’s financial situation for this reason, and therefore the company welcomes Huawei’s move.
But under Indonesian trading rules, the shares to be converted will not be available for trading for one year.
While Huawei’s Indonesian subsidiary PT Huawei Tech Investment will also have the right to elect representatives on Bakrie Telecom’s board, Anindya said no decision on this has yet been made.
The possibility of a debt conversion was first floated last year but at the time it was suggested that Huawei would be taking just a 9% stake, with fellow creditors Protelindo and SUPR receiving shares of 7% and 6.8% respectively.
Amid a lacklustre housing market at home, PropNex Realty, one of Singapore’s largest real estate agencies, embarked on its first regional expansion in the second half of last year with its entry into the massive Indonesian market.
“The reasons were quite clear. We have been in existence for 17 years. The first 15 years we had no intention to go regional because the market was very much upbeat,” said PropNex CEO Ismail Gafoor in a media briefing ahead of the company’s grand opening in Indonesia next Tuesday.
“When all the cooling measures started we straightaway had a strategy … It was time for PropNex to go and stretch its wings regionally.
“Naturally, we selected Indonesia because a lot of Indonesians, wealthy investors, do have a home in Singapore and they always see Singapore as a safe haven, secure and a place for schools and financial businesses … Also, among the Asean countries it has the highest population of 260 million.”
PT PropNex Realty Indonesia, set up through a master franchise arrangement, has grown to seven offices with a sales force of 600 within a few months, said Mr Ismail, adding he was confident it will cross the target of 1,000 by the end of the year.
Affluent Indonesians continued to show keen interest in Singapore’s properties, he added.
There have been “numerous sales” with Indonesian buyers picking up mass-market condominiums, he said, noting that there will be “natural interest” among Indonesians in the higher end of the market if prices drop further.
PropNex has Vietnam next in its sights as it continues its regional expansion, but it is still in the early stages of finding a partner, said Mr Ismail.
He said there has been little immediate impact from last Friday’s easing of property cooling measures and loan curbs in Singapore.
“Over the weekend, we have not seen any push in activities or buying interest patterns. To me, these are all not the key drivers. The key drivers … would be to tweak the Additional Buyer’s Stamp Duty (ABSD) for the second and third properties for locals and foreigners,” he said.
Nonetheless, Mr Ismail welcomed the easing as a “positive step”.
Under the latest changes effective from last Saturday, the Seller’s Stamp Duty (SSD) will be payable if a homeowner sells his or her property within three years of purchase, down from four years previously.
The SSD rates will also be lowered by 4 percentage points for each tier — to 4 per cent for properties sold in the third year; 8 per cent for those sold in the second year; and 12 per cent for those sold within the first year.
In addition, the Government will no longer apply the Total Debt Servicing Ratio (TDSR) framework to mortgage equity withdrawal loans, with loan-to-value ratios of 50 per cent and below.
The Government had imposed a series of cooling measures and borrowing curbs since 2009, to rein in a steep jump in home prices as the economy emerged from the global financial crisis.
These measures included the SSD, ABSD, tighter loan-to-value ratios and mortgage servicing ratios, as well as the TDSR, among others.
From the recent peak in 2013, private home prices in Singapore have fallen 11.3 per cent, while resale HDB prices declined 9.9 per cent, reflecting the sustained impact of the loan curbs and cooling measures.
The Investment Coordinating Board (BKPM) said that South Korean investors will invest in numerous sectors in Indonesia. BKPM chief Thomas Trikasih Lembong said in this week alone, several project agreements will be signed.
“I’m expecting for several infrastructure and electricity projects to be signed this week. The value is about US$200 million (approx. Rp2.6 trillion),” Thomas said during the sidelines of the Indonesia-Korea Business Summit at the Shangri La Hotel in Jakarta, Tuesday, March 14, 2017.
According to Thomas, many South Korean factories have opened in Indonesia, such as textile and footwear factories. The factories’ operation has employed more than 500,000 people.
At the Indonesia-Korea Business Summit, the BKPM and the Korea Trade Investment Agency (KOTRA) signed a MoU as a way to promote investments between the two nations.
“We hope this will help both Indonesian and South Korean companies in developing their business,” Thomas said.
Thomas said that most of the country’s investments are in the manufacturing sector, accounting for 71 percent of their investment value from 2012 to 2016.
The investments are aimed at both countries’ leading sector, and will cover areas including information exchange, documentation, publication, and others.
South Korea is Indonesia’s third-biggest investor today after Singapore and Japan. From 2012 to 2016, South Korean companies invested a total of US$7.5 billion for 7,607 projects in Indonesia.
Former Chelsea, AC Milan and Real Madrid midfielder Michael Essien has signed with Indonesia’s Persib Bandung, the club announced today, the highest-profile player to join a team in the country for years.
The Ghanaian signed a one-year contract for an undisclosed sum to join Persib, which is one of the best clubs in the country.
The 34-year-old had not been playing with a team since he left Greece’s Panathinaikos at the end of last season.
“I will give my very best to Persib,” Essien, wearing a club shirt, told media at the team’s headquarters in Bandung.
When asked what he knew about football in Indonesia, he conceded “not very much” but added that he had visited the country with Chelsea before.
However the move to Indonesia could turn out to be a shock.
Football in Southeast Asia’s biggest nation has been wracked by crisis for years, with an explosive row between the domestic association and government prompting FIFA to ban Indonesia from international competition in 2015.
The domestic league ground to a halt for a while amid the row, but FIFA lifted the suspension in May last year and football in the country is slowly starting to recover.
Foreign players have also been badly treated by Indonesian clubs, with at least two known to have died in recent years after going unpaid and being unable to afford medical treatment.
Essien is the best-known international footballer to join an Indonesian side since the 1990s, when Cameroon World Cup star Roger Milla and Argentine World Cup winner Mario Kempes both played in the country.
The Ghanaian said he was approached by teams from other countries, including Turkey and Australia, but he had been impressed by Persib, without giving further details.
The club would not be drawn on how much they had paid for him.
“The contract value is large because he is a former Chelsea player, I cannot reveal (the amount),” said Teddy Tjahjono, one of the club’s directors.
Persib finished fifth in last year’s Indonesian Soccer Championship.
President Joko Widodo (Jokowi) received Toyota Motor Corporation executives led by the companys president, Akio Toyoda, at Merdeka State Palace here on Monday.
“In 2015, Jokowi visited Toyota in Japan, and today we have presented a report on the several commitments of Toyota in Indonesia,” PT Toyota Motor Manufacturing Indonesias (TMMIN) deputy president director Warih Andang Tjahjono said after the meeting.
He stated that Toyota has expressed its commitment to continue to participate and contribute to the development of automotive industry in Indonesia through investment, exports, manpower, and human resource development.
Tjahjono was introduced to the president as the new president director of TMMIN. He would replace Masahiro Nonami starting from April 1, 2017.
Warih would be the first local person to be in the top position of the affiliation company of Toyota Manufacturing in the Asia-Pacific region.
Nonami, who had held the post as TMMIN president director since 2010, would take over a new position in TMMIN.
The meeting between the president and Toyota Motor Corporation executives lasted around 30 minutes from 9.35am to 10.15am
The first phase of Garuda Indonesia Travel Fair (GATF) 2017 which is held on March 10-12, 2017 in 24 cities generates positive results by achieving a total transaction amounting to IDR457 billion, surpassing the target set at IDR380 billion. The largest revenue contributors come from the city of Jakarta, Lombok and Denpasar.
VP Corporate Communications of Garuda Indonesia Tbk (GIAA), Benny S Butarbutar, in remarks, Monday (3/13/2017), said successful implementation of the GATF 2017 phase-1 shows public enthusiasm in traveling needs at an affordable price is still very high.
“In addition, successful implementation of the ninth GATF is certainly not without the support and hard work of all fellow employees of Garuda Indonesia Group. We wished that the implementation of the next 2017 GATF will be more successful,” he added.
The cities which become favorite destinations for visitors are Singapore, Hong Kong, Tokyo and Seoul for international routes; for domestic destination are Bali, Jogjakarta, Surabaya and Lombok.
Implementation of GATF in Jakarta this time also showed an increase, reaching 74 thousand visitors, compared to the same period last year of 60 thousand visitors.
Sporting the theme ‘Digital Experience’, Garuda Indonesia in 2017 GATF Phase 1 introduced LINE ID ‘Official Garuda Indonesia’, which is the only LINE ID for Indonesian airlines at this time.
“By adding official account of Garuda Indonesia in LINE, users of Garuda Indonesia’s services can enjoy various promotional programs from Garuda Indonesia throughout the year,” he said.
Bank Central Asia (BCA) on Monday reported an all-time high annual net profit, as Indonesia’s key tax amnesty programme helped to lower cost of funds for the country’s biggest lender by market value.
BCA posted a 2016 net profit of 20.6 trillion rupiah (S$2.17 billion), up 14.4 per cent from a year ago. This was a record high and also slightly above an average estimate of 20.0 trillion rupiah from 21 analysts.
Indonesia’s tax amnesty scheme, launched last July and aimed at bringing back billions of dollars stashed abroad by citizens, boosted the funds at BCA’s current accounts and saving accounts (CASA) in the second half of 2016, the bank said in a statement.
“Tax amnesty funds were parked at CASA,” BCA President Director Jahja Setiaatmadja told reporters. “What’s positive is that our cost of funds is low because our interest rate is low.”
However, some of those funds were only “transitioning” at BCA and would likely be placed eventually in assets including property and government bonds, Mr Setiaatmadja said.
At the end of 2016, BCA’s gross non-performing loans (NPL) stood at 1.3 per cent, one of the lowest in Indonesia’s banking sector.
BCA’s rival, Bank Mandiri, last month reported its lowest annual net profit in five years due to an increase in provisions. Mandiri’s gross NPL of 4.0 per cent was the highest since 2008.
Indonesias tourism brand “Wonderful Indonesia” won “The Best Exhibitor 2017” title at the worlds biggest tourism exhibition in Berlin, Germany.
Indonesias tourism minister Arief Yahya hailed the award announced at around 2.30am on March 12.
“This is a pride achievement. ITB (International Tourismus Borse) Berling is the worlds biggest tourism exhibition attended by 187 countries, 10,000 exhibitors, 180,000 visitors in Messe, Berlin. All tourism industries, tour and travel agencies, airlines, cruise service, hotels, resorts, attractions, governments, associations gathered at ITB Berlin. Wonderful Indonesia has shown its class at the world level,” he said.
This is the second title after the one Indonesia won in 2016 when Wonderful Indonesia successfully came out as the Best Exhibitor 2016 beating “Imagine” of South Korea which was placed second, “Incredible of India at the third place, followed by Maldives, Sri Lanka and the Philippines.
This year Wonderful Indonesia topped South Koreas “Imagine” and Thailands “Imagine”.
Malaysia was ranked 10th out of 75 countries and 1,466 exhibitors taking part in the event.
Indonesias participation along with a number of delegations in the event from year to year has proven able to increase transactions significantly.
In 2015 Indonesia was able to record transactions worth Rp4.2 trillion and in 2016 it increased to Rp6.5 trillion. “The target for 2017 was set at Rp10 trillion,” the minister said.
Next year he wished Indonesia would be able to win the Best of the Best title and become the champion of five continents.
This year Indonesia set up a 487 square meter pavilion to present various art exhibitions including dances from Papua, Bali, Betawi and Aceh.
At the event Indonesia raised the theme of maritime and cultural diversity which was expected to be able to give the public in Europe a full picture of Indonesia.
Deputy for overseas tourism marketing I Gde Pitana said he had promoted Wonderful Indonesia more intensively at ITB Berlin by cooperating with Indonesian industry players.
“We brought a delegation consisting of 135 travel agencies, hotel and regional tourism service representatives,” he said.
The Indonesian pavilion at Hall 26 A Number 120 was storied in the form of a traditional Phinisi ship and Wae Rebo traditional house of Flores.
He said the two icons represented the theme of Wonderful Indonesia which was “Maritime and Cultural Diversity.”
Pitana hoped Indonesias tourism brand Wonderful Indonesia would become more popular following the participation in ITB Berlin to make more foreign tourists to come to the country.
CIMB Niaga Syariah, the sharia unit of PT Bank CIMB Niaga Tbk recorded a 165.5 percent increase in its net profit to Rp305.43 billion in 2016 from Rp115.03 billion in the previous year.
Director of the sharia unit of CIMB Pandji P. Djajanegara attributed the surge in profit to 40.2 percent rise in sharia financing to Rp10.21 trillion in 2016 from Rp7.28 trillion in 2015.
“An increase was recorded in all business segments,” Pandji said here on Monday.
He said the non performing financing (NPF) of the sharia unit of the bank dropped to 1.15 percent from 1.86 percent despite the surge in financing.
“The performance of the sharia unit was in line with the management adoption of prudential banking principle while expanding its financing portfolio,” he said.
In 2017, apart from expanding consumer financing, CIMB Niaga Syariah wanted to increase financing of business segment including corporation, micro, small and medium enterprises (UMKM) and commercial financing, he said.
He said the sharia business is expected to account for 10 percent of the credits to be provided by PT. CIMB Niaga Tbk.
The third party fund held by CIMB Niaga Syariah rose 40.2 percent to Rp10.63 trillion in 2016 from Rp7.58 trillion in 2015.
Pandji attributed the increase in the third party fund partly to the status of the unit as a recipient of hajj pilgrimage payments including regular hajj and special hajj pilgrimage.
CIMB Niaga Syariah has a product of hajj saving that includes hajj plan saving, and hajj pahala (merit) saving and iB Mapan Wakaf saving.
With the financing and the third party funds , the assets of CIMB Niaga Syariah rose 40.34 percent to Rp12.78 trillion in 2016 from Rp9.11 trillion in 2015.
The sharia unit contributed 5.45 percent to the total assets of Bank CIMB Niaga in 2016 , up from 3.90 percent in 2015.
PT CIMB Niaga is the countrys fifth largest bank in assets controlled by the CIMB Group of Malaysia.
Mitsubishi Motors and its new parent Nissan are studying joint production of pickup trucks in Southeast Asia as they look for savings within the broader Renault-Nissan alliance, a senior executive told.
The Japanese groups may pool technical underpinnings and production of future replacements for the Thai-built Nissan Navara and Mitsubishi Triton, Mitsubishi Chief Operating Officer Trevor Mann said in an interview at the Geneva car show.
Mitsubishi’s pickup architectures are likely to become the basis for future alliance models, said Mann, who was despatched by Chief Executive Carlos Ghosn to help turn Mitsubishi around after Nissan paid US$2.3 billion for a 34 percent controlling stake in the scandal-hit company last October.
“If you look at our cost performance in that region, we are the benchmark within the alliance,” Mann said. “Our four-by-four technology, our cost base on pickups is better than Nissan’s.”
Nissan snapped up Mitsubishi last year after the company admitted in April it had falsified fuel consumption data, triggering a sales slump and steep losses expected in the current fiscal year, which ends this month.
Mitsubishi expects sales to bounce back above 1 million vehicles next year, Mann said, almost reversing their 8 percent decline from 1.05 million before the outcry. Nissan and Mitsubishi currently produce frame-based pickups and cars – which have fundamental design and manufacturing differences – on separate lines at each of their Thai plants.
Moving to common architectures could potentially allow the Mitsubishi factory to specialize in pickups while the Nissan plant builds cars and SUVs, increasing productivity at both sites, Mann said, while stressing that nothing had been decided.
Cooperation will rapidly extend to other countries in the region including Indonesia and the Philippines, where the companies have plants, Mann said. But pickups are likely to stay based in Thailand, where they account for 40 percent of sales.
The current Navara and Triton models were launched in 2014 and are not due for replacement before 2022, which means development and production decisions may still be two or more years away. In the meantime, Nissan and Mitsubishi are already pooling car transport and other logistics while stepping up efforts to find more savings from joint purchasing.
Renault and Nissan, whose 18-year-old alliance is cemented by reciprocal minority shareholdings, are also likely to use Mitsubishi’s plug-in hybrid technologies, Mann added. “That’s an obvious opportunity.” But Renault may have to wait longer than its alliance partner for the market access and savings that their new affiliate can bring.
“What we have to do is prioritize,” Mann said. “We have the capital share with Nissan, so it’s logical to start there.” Under Nissan ownership, Mitsubishi is still “cleaning house” in the wake of the fuel-economy data scandal, he added.
“We’re introducing a proper delegation of authority, risk control and business ethics in the company,” Mann said. “If we did uncover anything (else) which was not correct, we would disclose in an appropriate manner.”
While its direct-selling model echoes brands like Avon and Tupperware, Indonesia’s MindStores gives the approach a modern twist—with augmented reality.
Recognized as the first partnership store network to use augmented and virtual reality, MindStores equips its store owners with their own unique partner cards which customers use to access the stores virtually. The whole process is relatively simple, and takes place in-person only.
A store owner, who can be located anywhere—from their living room to a public coffee shop—shows a customer their partner card. Using a dedicated app on their own smartphone, that customer scans the card to see a 3D retail store appear on their screen. From there, the customer enters that partner’s virtual store and can browse and purchase merchandise to have shipped to them. The store owner then gets a cut of the sale.
Slingshot, the Indonesian technology and media company that operates MindStores, announced this week that the store network has opened more than 7,000 stores in Indonesia since its launch last June. They estimate that they will have more than 150,000 active stores by the second quarter of 2017, with the potential to open more than 4 million new stores in the country over the next two years.
As part of the pilot program, MindStores partnered with Alfamart, a large Indonesian convenience store chain, to have their wares sold through branded Alfamind virtual stores by individual store owners. However, augmented reality gives MindStores the potential to expand their retail partnerships to other companies, with many stores appearing side by side on each scanned store owner card.
“The future will be an augmented reality city that is working flawlessly with people, with stores, with consumers,” said Daniel Surya, CEO of Slingshot and its parent company, WIR Group, in an interview with NextReality. “Now is just the first phase. We’re looking at a data-driven city using augmented reality.”
Surya noted that MindStores already has an agreement with one of the largest insurance companies in Indonesia, Astra Life, in collaboration with UK-based Aviva, as their next retail partner. Eventually, MindStores will also give its store owners the ability to sell their own merchandise and crafts—not just partner brands—like on Etsy.
The company expects to expand to China and India by the end of the year, Latin America and Africa next year and, eventually, the United States. Each expansion will require recruiting partners that resonate with consumers in those markets.
Working in emerging markets presents challenges in rendering AR and VR animations, since most consumers are equipped with lower-end phones running on processors two or three generations old.
The stores are designed to render smoothly through its Android or iOS app. To ensure consistent operation, the company built the stores on their own engine, which is compatible with more modest hardware. For instance, minimum requirements to run on Android include OS version 4.2 Jelly Bean, quad-core 1.8 GHz CPU, and 2 GB RAM.
“We need to be able to present this technology on the simplest, most modest phone available on the market,” said Surya. The app is also optimized to compensate for available connectivity in the emerging markets. According to a spokesperson, the app is designed to allow for offline browsing, though an internet connection is required to place an order.
Nonetheless, they are also testing the experience with smart glasses, namely Vuzix and HoloLens, and their research and development team maintains relationships with the leading hardware makers so that they are familiar with the next wave of devices.
Empowering Women Through Community-Based Selling
Along with the eye-catching AR and VR aspects, community-based selling has been a significant component of the company’s success.
The direct selling model appeals to mothers of single-income families as supplemental income, according to Surya. Since brand loyalty is low in Indonesia, the ability to offer goods at a discount to friends and neighbors gives store owners and their partner retailers an advantage.
Through Mindstores we’ve used innovative technology to create something as equally innovative as it is meaningful, through its proven ability to make a positive impact to empower women worldwide. Slingshot will continue enhancing the Mindstores experience, for the benefit and futures of an often-overlooked population: women in less developed regions of the world.
Compared to the cost of opening a brick-and-mortar store or securing a franchise license, the start-up cost for MindStores is relatively modest. Store owners invest a minimum fee (the equivalent of about $100) to serve as capital to purchase inventory credit from Alfamart, the partner retailer.
Their customers order products through the store and pay the customer in cash. The retailer applies the purchase towards the inventory credit and ships to the customer. Customers pay the store owners directly in cash. Store owners can purchase additional credits once the initial investment is exhausted.
The store owners receive about 15% of each sale for most of Alfamart’s product categories, such as fashion and household goods, which have 30-40% margins. MindStores takes a 2% cut, with the remainder of the proceeds going to Alfamart. Slingshot reports that participants average $900–$1,200 per month in sales.
Next Stop: SXSW
Slingshot is one of five Indonesian companies appointed by BEKRAF (Indonesian Government Agency for Creative Economy) to attend the South by Southwest (SXSW) Conference and Festival, taking place March 10–19 in Austin, Texas. The companies will exhibit in the Indonesian section named Archipelageek.
“It is a tremendous honor to represent our Country at such a prestigious event,” said Surya. “We’re proud to showcase the creative and innovative technological achievements from Indonesia, which we believe are highly relevant in today’s worldwide marketplace.”
In addition to its MindStores business unit, Slingshot also operates AR&Co., which specializes in augmented reality content development, and DÄV, an AR media placement company. Founded seven years ago as the AR Group, Slingshot has offices in New York, Los Angeles, Silicon Valley, Jakarta, Singapore, Barcelona, and Malta.
Slingshot has completed more than 500 projects in 20 countries, working with brands such as Disney, Cartoon Network, Samsung, LG, Intel, Lenovo, and Sony, to name a few.
Among their notable campaigns include AR-enabled ads for the successful Nigerian presidential campaign of Muhammadu Buhari, holographic Star Trek collectible pins, and the first AR children’s books in Spain.
“We’ve always been excited about the possibilities of augmented reality and the power it has as an engaging and immersive platform,” said Surya.
The Tourism Ministry, in cooperation with Chinese provincial tourism administrations, aims to raise the number of tourist arrivals from China by 50 percent to 2.1 million in 2017 from 1.4 million last year.
The ministry’s director for Asia-Pacific tourism promotion, Vinsensius Jemadu, said that this year’s increase would be part of Indonesia’s target to attract 10 million Chinese visitors by 2019.
“China is our strategic partner and main market for tourism. Therefore in the Tourism Ministry, China gets more than 50 percent of its budget for promotion,” he said in a meeting with Hubei tourism administration in Jakarta on Friday.
Vinsensius further said that aside from cooperation with the Hubei tourism administration, the ministry had also established cooperation with China’s Hainan tourism administration.
“Next month, Hainan Airlines and Capital Airlines can fly to Jakarta three times a week,” he said.
Citilink, a subsidiary of national flag carrier Garuda Indonesia, was expected to fly to 17 cities in China from Tanjung Pinang in Riau Islands and Manado in North Sulawesi, based on the memorandum of understanding (MoU) signed by the Indonesian tourism minister in Beijing last year, Vincensius said.
The ministry offers an incentive of US$15 (Rp200,895) or $20 per passenger to airlines and wholesalers bringing visitors to Indonesian destinations outside of Bali and Jakarta. In addition, the Transportation Ministry will provide licenses of direct flights and offer free parking and landing to aircraft from Chinese airlines.
The Indonesian Stock Exchange (IDX) has inaugurated the 250th Investment Gallery located at the Faculty of Economy and Business of Udayana University in Denpasar, Bali. The galleries are spread in 240 universities in Indonesia.
IDX President Director Tito Sulistio said investment gallery is a means to introduce the capital market to academicians. It is established in collaboration between the IDX, universities, and companies that are Members of Exchange (AB).
“It is hoped that academicians will not only know the capital market from the theoretical aspect only but can also directly implement the practice,” Tito said in Bali on Friday (10/3).
The Investment Gallery provides all publications and printed materials about capital market published by the IDX, including regulations and laws on the capital market.
Academicians can use information and the data for academic purposes and research. The materials can also be used as a reference in decision making when doing share transactions.
Tito hopes that those galleries can disseminate information on the capital market, not only among academicians but also economists, investors, capital market observers or the public in the regions.
Tito added that this year, IDX inaugurated 10 Investment Galleries this year, seven of which are located Bali and five of them are in Denpasar.
Digital media group REV Asia is on the lookout for local partners for its operations in Indonesia and the Philippines, says managing director Voon Tze Khay.
The group’s initial plan, which was to grow its market share in social media advertising revenue in those markets, hit a snag one-year into operations, leading it to seek home-grown partners.
“We thought if we could run Malaysia at such a successful pace over the last three years, why not try it ourselves? However, after 12 months, we realised that the opportunities in these markets are plenty but the right way and more strategic way to do it is through a local partner, either in the form of merger and acquisition (M&A) or joint venture (JV),” Voon told in an interview.
He said the group faced operational challenges in both markets, in terms of understanding the local business culture, dealing with local advertising agencies and brands as well as challenges in working style and expectations in the delivery of campaigns.
“Running a business in these two countries is very different to how we run it in Malaysia simply because the understanding of local and business culture is a fairly important tool. We have not seen it grow in the way that we expected,” he added.
Voon said it has identified certain players that could be potential partners but talks have not begun as it is still mapping out how to grow with a local partner. The group entered both markets in 2015 with their Says.com and 8share.com brands. These markets contribute about 5% to total group revenue and there are no plans to expand its other brands there in the immediate term.
“In the next 24 months, we are looking at international revenue (contributing about) 5-8% because our focus is going to be Malaysia. We are expecting Malaysia to grow in the double digits year-on-year in both revenue and bottom line.
“For international markets, there’s still a lot more groundwork to be done for local business understanding and a lot more research to be done from data point of view. That doesn’t mean we are not putting in efforts to grow it. But growth compared with Malaysia will be a lot smaller,” said Voon.
In 2017, the group aims to grow in terms of audience and revenue in Malaysia, through organic growth and M&As, by shifting its focus to videos and small and medium enterprises (SMEs).
Voon said consumption of videos on mobile has grown tremendously and will continue to grow. It also aims to tap into the 700,000 SMEs in Malaysia by offering them specific packages to promote their services across the group’s platforms.
In 2016, total video revenue contributed 10% while total SME revenue contributed only 2%. This year, it aims to grow contribution from these two products to 25% and 12% respectively.
In terms of M&A, Voon said, REV Asia is always on the lookout for opportunities within the three main languages in Malaysia.
“We will continue to seek out M&A opportunities but we will be selective. It has to be a digital media product with a sizeable audience already visiting the site and we will look at how that particular brand fits within the entire REV Asia set-up,” he said.
Recall that the group acquired two Chinese websites, Viralcham and Rojaklah, in 2015 and last year it acquired three Malay-language websites, namely Siraplimau.com, Myresipi.com and Kongsiresepi.com.
Meanwhile, REV Asia Bhd (holding company of REV Asia) saw its shareholding in iCar Asia Ltd diluted to 17.28% in September last year and in November shareholders approved the transfer of its shareholding into a special purpose vehicle (SPV).
“The process is underway, we are waiting for the finalisation of a court order to reduce the share capital and to fully formalise the transfer of the shares of iCar Asia out from REV Asia Bhd into an SPV. We hope to complete the transfer by first quarter this year,” said Voon.
President Joko Widodo has revealed that global competition in the furniture and handicraft industry is increasingly rapidly. Moreover, changes in mode of creative industries are on the rise, as well as providing an alternative for its own market.
The President also claimed to have become more satisfied with the changes that occur in the furniture and handicraft industry in Indonesia to move the industry forward. However, he added that this time, the toughest competitors in the international furniture industry for Indonesia are Vietnam and Malaysia.
“If we do not follow, then we will be left behind. The furniture and handicraft products’ design are good enough. What needs to be done now is on how to market the products so we can compete internationally,” he said at the Jakarta International Expo (JIExpo) in Kemayoran, Jakarta, on Saturday (3/11).
He stressed that if the domestic furniture industry is not able to adjust to global challenges that exist today, then Indonesia’s furniture industry will be undermined by other countries’ furniture products.
“The designs of existing products from rattan, wood, bamboo, and metal have been changed. These are the changes that need to be done, because the world changes rapidly,” President Joko Widodo added.
“Our toughest competitors are now Vietnam and Malaysia. I think with good designs like these we can improve,” he continued.
