Tag: Indonesia

  • iFashion Group reels in Megafash

    iFashion Group reels in Megafash

    Singapore fashion and lifestyle platform iFashion Group has acquired independent designer brands marketplace Megafash in a S$3.15 million (US$2.23 million) cash-and-shares deal.

    This follows iFashion’s purchase of lifestyle and fashion brands Dressabelle and Nose, as well as real-estate booking platform Invade.

    Megafash was launched in December 2015 with an eCommerce platform and three stores, and now has more than 15,000 sqft (1393.5 sqm) of retail space across seven stores. It also has a presence in Indonesia and Thailand and stocks more than 2000 international indie brands, with 30 per cent of its in-store brands being exclusive.

    Its annual revenue last year was reported to be $8 million.

    “In times of economic downturn, we are pleased to say our revenue grew five times from 2015,” says Megafash CEO/co-founder Jiawen Ngeow. “In December we received as many as 2000 orders a day.”

    iFashion has appointed Dressabelle CEO/founder Jeremy Khoo as new CEO, who will be responsible for driving the company to the next level.

    “Our acquisition of Megafash completes our line-up of brands for our IPO,” says iFashion Group VP of corporate affairs Jeneen Goh. The company is looking at going public at the end of April or May.

  • HGC launches iBizCloud in Indonesia

    HGC launches iBizCloud in Indonesia

    Hutchison Global Communications (HGC) has teamed up with Indonesian ISP PT Centrin Online Prima to launch a cloud service tailored for the Indonesia market.

    The launch of ibizCloud in Jakarta aims to provide a one-stop global cloud service that meets the infrastructure and speed requirements of local and international enterprises.

    HGC is providing cloud technologies and service design, as well as international connectivity, while Centrin Online provides local connectivity for the service. This launch aims to help the latter meet increasing demand for data exchanges from corporations operating in Indonesia.

    Offered as a total solution, ibizCloud aims to enable Indonesian businesses to access reliable cloud storage without having to make hefty upfront investment in infrastructure.

    The service grants access to a cloud environment via infrastructure-as-a-service (IaaS), bandwidth-as-a-service (BaaS) and dedicated bandwidth-as-a-service (DBaaS).

    Customer organizations can also choose to use on-demand Virtual Leased Line (ODVLL), which facilitates end-to-end data transmission over a secure network. ibizCloud comes complete with virtualised infrastructure such as virtual machines, CPU cores, RAM and storage.

    “Making ibizCloud available in Jakarta represents a great start to 2017 for HGC,” commented Andrew Kwok, Limited president of international and carrier for HGC parent company Hutchison Telecommunications (Hong Kong).

    “The new cloud site strengthens ibizCloud’s market position in Asia, following launch of the service in Hanoi last December. HGC works tirelessly to enhance ibizCloud features in order to meet ever-rising demand from multinationals. One of the value-added features to look out for in early 2017 will be a resource pool arrangement by which customers can allocate additional resource promptly, without having to go through a subscription process.”

  • Korean firm enters Indonesian credit card market

    Korean firm enters Indonesian credit card market

    Shinhan Indo Finance Ltd (SIF), a subsidiary of South Korean credit issuer Shinhan Card, has launched its first credit card on the Indonesian market.

    The “ShinhanIndo Card Hi-Cash” comes in four different types to reach consumers from all segments, especially the millennials.

    In developing its credit card business, SIF is cooperates with Indo-Pack, merchants under Indomobil Group, and K-Pack, merchants from South Korean companies, the company’s vice president Tan Kim Piauw told a press conference after the launching event on Monday.

    SIF was established in December 2015 as a multi-finance joint venture between the Korean credit issuer and two Indonesian firms, Indomobil Group and Asuransi Central Asia (ACA).

    The joint venture obtained permits to issue credit cards from the Financial Services Authority (OJK) and Bank Indonesia in December last year.

    In its initial stage of operation, Indomobil’s 20,000 employees and those of ACA were SIF’s main market target, Tan said, adding that this year the number of credit card holders was expected to reach 80,000.

    “We hope to book Rp 500 billion in transactions in 2017,” he said.

    Speaking at the press conference, Shinhan Card CEO Wi Sung Ho said that with its growing middle class, Indonesia was a market with quite a bit of potential for the credit card business. He said that the number of credit card holders totaled only 17 million despite the country’s large population, far below the South Korean market with 22 million cardholders.

  • Pakistan boosts orange exports to Indonesia

    Pakistan boosts orange exports to Indonesia

    Indonesian fresh fruit importers say Pakistan will face tough rivalry from China. Pakistan hopes to see an increase in exports of its famous Kinnow oranges to Indonesia, as it has started to infiltrate the market through giant retailers.

    A press statement from the Pakistani Embassy made available to The Jakarta Post states that consignments of the Pakistani Kinnow have started arriving in Jakarta, and are currently being sold in many major grocery chains, including Carrefour, Ranch Market, Hypermart and Giant.

    The Kinnow is a larger orange, touted to be extremely easy to peel and is cited as having a unique flavor as a result of the soil and climate in which they are grown.

    “The Pakistani Kinnow made its entry into the Indonesian market at New Year and the Chinese New Year, to make them more joyous occasions. Last year, Pakistan’s exports of Kinnow oranges to Indonesia amounted to US$23 million and this figure is expected to grow significantly in 2017,” the press statement read.

    Indonesia has a preferential trade agreement (PTA) with Pakistan, which began in 2013, and Pakistan’s Kinnow oranges are allowed access through the country’s main port in Tanjung Priok, North Jakarta.

    In exchange, Pakistan exempts Indonesia, the world’s largest crude palm oil (CPO) producer, from paying 10 percent import duty on that commodity.

    Following the PTA, imports of Kinnow oranges from Pakistan reached $19.3 million in 2014, from $3 million in 2013.

    However, Indonesian Fresh Fruit and Vegetables Exporters and Importers Association chairman, Kafi Kurnia, said that it was unlikely Pakistan could significantly boosts its exports of Kinnow oranges because of fierce competition from similar oranges from China.

    Kafi noted that since existing regulations limited the size of imports of certain fruits, importers tended to be choosier.

    “The Kinnow imports arrived during a very good time, at around Chinese New Year. However, they have a lot of fierce competition, mostly from Chinese exporters. If my importing quota was limited, especially during this time, I would definitely prioritize oranges from China,” he told on Monday.

    Even so, the Kinnow orange will remain a major competitor for locally produced oranges, as there was a lack of research and development that could help raise the quality of local fruit and vegetables.

    Indonesia is also home to many other tropical fruits such as mangosteen, rambutan, snake fruit, jackfruit, soursop, breadfruit, guava and starfruit, but they are not exported in great quantities or even consumed heavily at home.

    The government aims to boost tropical fruit production by expanding land for fruit plantations while also improving infrastructure and transportation systems to reduce high distribution costs, as part of efforts to become the biggest tropical fruit producer in Southeast Asia by 2025 and in the world by 2045.

    Meanwhile, National Agriculture Council chairman Benny Kusbini concurred that a lack of uniform quality among locally produced fruit was an obstacle when it came to competing with imported fruit sold in Indonesia.

    He also noted that poor infrastructure remained a problem as some fruits were cheaper to import than to transport from regions in Indonesia.

    “The Kinnow, for example, can be very cheap to import from Pakistan to Indonesia. Sometimes 10 kilograms of Kinnows can be imported for only $5 to $6. Compared to oranges from Medan, for example, it is difficult to compete with those prices,” he told the Post.

    Indonesia imported $666.37 million worth of fruit and $558.08 million worth of vegetables in 2015, according to data from Trade Map.

  • How Indonesians Became Richer than Filipinos

    How Indonesians Became Richer than Filipinos

    An Indonesian boom sparked by growing economic stability and falling corruption and debt levels has helped Indonesians catch up and become better off than Filipinos in per capita income in recent years.

    That hasn’t surprised those following emerging markets closely, though the Philippines’ equity market has outperformed Indonesia’s in the last ten years. Nor has it been a surprise seeing the Philippines leave behind the old glory days of the 1960s, and be bypassed by the one Asian country after another in per capita GDP.

    “There was a time when the Philippines was seen as an Asian trendsetter, and fashionable young Malays would sport the barong, the formal embroidered shirt favored by Filipinos, to look cool,” writes Ruchir Sharma in Breakout Nations. “But that was back in the 1960s, when the Philippines had the second highest per capita income in Asia, behind only Japan. The nation’s fortunes shifted since then.

    By the 1970s South Korea and Taiwan had passed the Philippines in per capita income terms. Malaysia and Thailand followed in the 1980s and China in the 1990s. Then in 2009, in a moment the Manila elite thought it would never see, Indonesia’s boom made Indonesians richer than Filipinos for the first time in history.”

    That’s a trend that continued beyond 2009. In 2016, Philippines per capita GDP was close to two-thirds of that of Indonesia’s; the gap is even bigger in ppp. What has Indonesia done right that Philippines’ hasn’t?

    To begin with, it has managed to shake off the economic and political instability that came with the breaking of the Asian financial crisis – a crisis which hit Jakarta hard, with GDP falling close to 20 percent over the 1997-1998 periods.

    Moreover, Indonesia managed to bring its government debt down, which accounts roughly for 60 percent of that of Philippines. Then there’s the battle against corruption and cronyism, big killers of emerging market growth, though it still remains high compared to that of China and India.

  • Garuda Indonesia axes first class on London routes

    Garuda Indonesia axes first class on London routes

    Garuda Indonesia will no longer be offering first class seating to London from June 20 onwards as it looks to switch from a three-class to two-class Boeing B777-300ER.

    The configuration change for flights GA086/87 on the carrier’s Jakarta-Singapore-London Heathrow route will increase the overall number of seats from 314 to 393 at the expense of its first class cabin.

    While airlineroute.net reported the change on Friday, February 3, at the time of writing Garuda is still offering first class seats on the route on its website.

    Garuda currently operates the route three times weekly, with its Tuesday, Saturday and Sunday schedule not expected to change.

    Full details for the Jakarta (CGK)-Singapore (SIN)-London Heathrow (LHR) route are as follows:

    Flight No. From To Departs Arrives Days
    GA086 CGK SIN 0745 1035 Tue, Sat, Sun
    SIN LHR 1200 1855
    GA087 LHR SIN 2110 1730+1 Tue, Sat, Sun
  • AXA Financial Indonesia seeks new customers from digital platform

    AXA Financial Indonesia seeks new customers from digital platform

    Life insurer AXA Financial Indonesia, part of the AXA Indonesia Group, launched a digital tool to expand its customer base on Monday.

    The tool provides easy access to information for several purposes, namely creating a children’s education fund, retirement fund, business capital and tourism or pilgrimage fund.

    AXA Financial Indonesia chief agency officer Nina Ong said the tool and products were directed at modern dynamic citizens, ages 25 to 45 years old.

    The company expects the tool to help attract 20 percent to 30 percent of such citizens as its new clients and expand its customer base, which is now served by about 14,000 agents.

    AXA Financial Indonesia’s move is part of an overall strategy by the insurance industry, which has continued to report low insurance penetration despite Indonesia’s status as the largest economy in Southeast Asia.

    Data from the Financial Services Authority (OJK) shows that the insurance penetration ratio stood at 2.63 percent only, as of September, below the ratios in Malaysia, Singapore and Thailand at over 5 percent.

    AXA Financial Indonesia booked Rp 1.44 trillion (US$108.03 million) in total revenue in the first nine months of 2016, a more than sixfold increase compared to the same period in 2015, supported by positive results in its investments.

  • Indonesian Tourism Industries Support Visa-free Policy

    Indonesian Tourism Industries Support Visa-free Policy

    Indonesian tourism industries have expressed support to the adoption of visa-free policy by the government so far, citing positive impact on the tourism sector.

    The general chairman of the Association of Indonesian Tourism Industries (GIPI), Didien Junaedy, said here on Saturday (Feb. 4) that the adoption of the policy is essential to boost tourism in the country.

    He said that the policy has been proven to significantly increase the arrival of foreign tourists in their countries.

    Through Presidential Regulation Number 21, 2016, the Indonesian government has provided visa-free facility to visitors from 169 countries for a short visit.

    The regulation was produced in March 2, 2016, and so it is not yet a year old. According to me, the evaluation should be done after two years of its implementation,” he said, adding that it would take several months to familiarize.

    Junaedy added that tourism industrialists grouped in GIPI have seen and felt the positive impacts of the policy.

    He stated that consistency in the implementation of the policy would be needed with regard to building public trust in foreign countries.

    Supervision on the other hand, however, is also needed to minimize possible violations of the regulation, he noted.

    “GIPI has planned to gather tourism industrialists eight times in the first semester this year to strengthen its support for the implementation of the Presidential Regulation Number 21,” he asserted.

    Junaedy admitted that there had also been negative excesses coming from the policy, such as visa overstay problem and illegal worker problems.

    “Their number however is relatively small compared to millions of foreign tourists visiting Indonesia legally, like in other countries that implement the same policy,” he added.

    He also said that the negative impacts of the policy must be overcome, and solution to the problems must be found through joint efforts.

    “We must not blame each other over trivial problems but must cooperate to overcome them,” he stated.

    He said that the visa-free policy has so far been one of the strong factors that has played a major role in meeting the target of foreign tourist arrivals, which was set at 15 million this year and 20 million by 2019.

  • Time International introduces Sweet Monster

    Time International introduces Sweet Monster

    Korea’s popcorn soft-serve ice cream brand Sweet Monster has arrived in Indonesia as the first F&B retail venture of Indonesian brand group Time International.

    It has launched stalls in Project X Plaza Indonesia and Pondok Indah Mall 2 in Jakarta, featuring its range of characters, EggMon, CookieMon, BlueMon, LeMon, PinkMon, OrangMon, ChocoMon and PopMon.

    SM_IG_Photo Product

    Inspired by confectionery sold at American carnivals and festivals, the brand attracted queues when it opened outlets in China, Hong Kong, Singapore and Thailand.

    Sweet Monster’s offerings are based on its ice cream, made fresh daily at each store from its own formula of milk powder. The flavour line-up includes Popcorn Ice Cream and Signature Ice Cream in Real Deep Milk, Original Tiramisu, Peanut Butter Pretzel, Caramel Macchiato, Cookie Mountain and Green Tea Mountain.

    There is also the full-cream Monster Shake, inspired by American milkshakes made only from ice cream and milk. Flavour options include Pure Milk, Cookie & Milk, Caramel Cafe au Lait, Strawberry Cake and Ferrero Nutella.

    Using only non-GMO corn, Sweet Monster’s popcorn is popped by air. It does not contain trans or saturated fats or artificial colouring, but does have dietary fibre.

    The PopMon characters represent the flavours of the popcorn: salt caramel, combination, strawberry, chocolate or tangerine.

    sweet-monster-project-x-2

  • Does your fish burger contain mercury-tainted shark meat?

    Does your fish burger contain mercury-tainted shark meat?

    A study of shark meat in Indonesia – the world’s largest shark fishery – has found dangerously high levels of mercury build-up in catches bound for overseas fish markets.

    Research conducted at the Seafood Inspection Laboratory in Bali found that mercury concentrations in processed, export-ready shark tissue exceeded twice the commonly accepted safe consumption limit.

    This is the first time that mercury levels have been tested in Indonesia-caught sharks bound for markets overseas, where importers and consumers are unaware that the fish that goes into fish burgers and fish and chips meals is shark.

    Bull shark meat tested on 26 January 2017 was found to contain 2.431 parts per million (PPM) of mercury. The consumption limit for predatory fish species in key Indonesian export markets such as Australia, Singapore and New Zealand, and also Indonesia, is 1.0 PPM.

    Bronze whaler meat – commonly sold as “flake” in Australia and cooked in batter for fish and chips dish- tested a week earlier was found to have a mercury concentration of 1.829 PPM.

    Bull shark meat sourced from the same location just a year ago was found to contain a significantly lower concentration – 1.368 PPM.

    Green School of Bali taking shark samples at Jimbaran fish market, Bali, Indonesia. Image: Bali Shark Rescue Center

    “Consumers are being deceived and are unaware of the type of fish being sold and ultimately ingested,” commented Paul Friese, founder of Bali Shark Rescue Center, whose non-government organisation partnered with sustainability college Green School of Bali to conduct the study.

    In Indonesia, most sharks are harvested for their valuable fins and liver first, and those parts sold to specialist buyers. The animal is then skinned, beheaded and the meat is filleted and moved back into the fish market unmarked.

    Shark fin can fetch up to IDR 2,500,000 (US$200) for a set, but locally sold shark meat sells for as little as IDR 25,000 (US$2) per kilo, and is used in street foods such as sate, fish cakes and meat balls. Overseas, shark meat is typically breaded and deep fried as fish burgers or used in the classic fish and chips dish.

    The sale of shark meat is also masked by transshipping, the process of transferring fish caught at sea from ship to ship, which makes the source harder to trace.

    Shark is particularly risky to eat because mercury bioaccumulates – the concentration of the heavy metal increases as it passes along the food chain, from plankton to shellfish, to small fish and onto larger predatory species.

    Mercury has entered marine ecosystems as a result of discharge from coal-fired power stations, residential heating systems, waste incinerators and mining, and also from volcanic activity.

    The main health risk from mercury consumption is damage to the nervous system. Unborn babies are particularly at risk from mercury pollution and, if exposed, may suffer impaired cognitive thinking, memory, attention, language, and fine motor and visual spatial skills in childhood.

    Meanwhile, shark populations in Indonesia have been under increasing pressure, as more than three million sharks are killed every year for their fins alone. Sharks are a tempting target for fishermen, particularly in remote island areas where the fins of the predators can bring lucrative returns.

  • Email Users in Indonesia Check Inboxes Hoping for a Retail Promo

    Email Users in Indonesia Check Inboxes Hoping for a Retail Promo

    Email has long served as a reliable beast of burden for marketers —a bankable but unexciting way for brands to tap into a dedicated audience that has opted-in to communication. The same holds true in Indonesia, but on steroids.

    A survey of email users in the country conducted by research firm JakPat in January 2017 found that a significant portion were interested in receiving marketing communications. Interestingly, 30.6% of respondents named receiving shopping promotions as one of the main reasons they used email.

    Marketers looking to craft messages for email users in Indonesia should be aware that the vast majority of respondents, more than 80%, primarily used mobile phones to check their email, according to the survey. That means that to effectively reach consumers in Indonesia, mobile-optimized email design is a must.

    Mobile phone email users also overwhelmingly relied on a dedicated email app over a web browser. Fully 86% of respondents used an app, compared with just 14% who checked email on a browser.

    A March 2016 survey of mobile device owners in Indonesia from Experian Marketing Services underscores how effective email ads can be. It found that 57% of respondents had been influenced to make a purchase by an email ad—more than had been swayed by either website banner ads or search ads.

  • Indonesia`s Rice Production Experiences Surplus after 9 Years

    Indonesia`s Rice Production Experiences Surplus after 9 Years

    Agriculture Minister, Andi Amran Sulaiman, claims that Indonesia has experienced a rice production surplus in 2016 after nine years past. “After nine years, 2016 was the moment when Central Java, East Java, and West Java, sent rice supplies to Kalimantan,” he said on Thursday, February 2, 2017.

    Minister Amran explained that rice supply warehouses in Central Java and West Java are currently in full-stock. “Warehouses in Central Java and West Java are full. The supplies keep increasing while the warehouses are full, last year it was empty. This is great progress,” he said.

    Other than rice supplies, according to Amran, garlic prices have also declined due to over stock. Therefore, the government plans to export garlic. “We’ll prepare the export earlier.”

    Based on the report from farmer’s association dubbed Kelompok Kontak Tani Nelayan Andalan, prices of rice in seven districts are below Rp3,700 per kilogram. “We had a coordination meeting until late at night, we’ll move quicker for the farmers. We won’t let them experience a loss,” the Minister said.

    In May, the Agriculture Ministry will hold a National Week (Penas) for Farmers and Fishermen in Aceh for six days; on May 6-11, 2017. President Joko “Jokowi” Widodo will inaugurate the event and it will be participated by 35,000 participants consisting of farmers, researchers, instructors representatives, and other stakeholders.

    A number of events will enliven the National Week which opens the opportunity to develop partnerships and open an agricultural product trade among ASEAN farmers.

  • Garuda Indonesia Announces Change in Citilink Director Board

    Garuda Indonesia Announces Change in Citilink Director Board

    PT Garuda Indonesia Tbk (GIAA) changes the composition of board of directors of its subsidiary, PT Citilink Indonesia.

    The change in the composition of board of directors was made after Chief Executive Officer (CEO) of Citilink Albert Burhan submitted resignation at the end of December 2016.

    Albert resigned following the case of Citilink airline’s pilots who allegedly drunk when he was about to fly Surabaya-Jakarta plane on Wednesday (12/28/2016).

    In a public expose before the Indonesia Stock Exchange (IDX), Thursday (2/2/2017), the company reported that resignation of Citilink’s CEO or President Director Albert Burhan and Operation Director Hadinoto Soedigno was approved by the company.

    The Annual General Meeting of Shareholders (AGM) of PT Citilink Indonesia approved the change in the composition of Citilink’s board of directors by January 30, 2017.

    Additionally, PT Citilink Indonesia’s current Director is Mega Satria.

    “General Meeting of Shareholders of Citilink Indonesia has approved the change in Citilink’s Board of Directors, which is effective as of January 30, 2017,” the public expose said.

  • RoRo To Connect Indonesia-Philippines As Part of ASEAN Connectivity

    RoRo To Connect Indonesia-Philippines As Part of ASEAN Connectivity

    New economic and trade opportunities are in sight with the opening of the Davao-General Santos-Bitung (D-G-B) Shipping Service, which is one of the target priorities for the Philippines Chairmanship of the ASEAN in 2017.

    Philippine Ambassador to Indonesia Maria Lumen B. Isleta and members of the Philippines and Indonesia Inter-Agency Task Force for the Operationalization of the D-G-B Roll-on/Roll-off (RoRo) Route gathered in Jakarta on Jan 17, 2017, to discuss preparations for the maiden voyage of the RoRo, which will connect Davao and General Santos City to Bitung in North Sulawesi, Indonesia, the Philippine embassy said in a statement here on Thursday.

    The D-G-B RoRo Route under the ASEAN RoRo Initiative aims to enhance maritime connectivity in ASEAN and maximize the use of regional sea lanes.

    The opening of the route is a more cost and time-efficient alternative to the usual Manila-Jakarta-Bitung route, which would take about three to five weeks of shipping time.

    In contrast, direct shipping through the D-G-B route will take only one day and a half of sailing (excluding port stay).

    The route is also expected to spur trade between Mindanao and the Sulawesi provinces in Indonesia. It is also expected to provide greater access for local businessmen to engage in international trade, as well as stimulate other areas of development such as joint tourism promotion, establishment of direct linkages, and increase in investment inflows, among others.

    On Jan 18, Isleta and leaders of the RoRo project task force paid a visit to Manado and met with North Sulawesi Governor Olly Dondokambey to discuss the maiden voyage of the RoRo.

    Meanwhile, The Philippine News Agency (PNA) reported that Philippines President Rodrigo R. Duterte and Indonesian President Joko Widodo will launch the ASEAN RoRo Project on April 28, 2017.

    New economic and trade opportunities are in sight with the opening of the Davao-General Santos-Bitung (D-G-B) Shipping Service, which is one of the target priorities for the Philippines Chairmanship of the ASEAN in 2017.

    Philippine Ambassador to Indonesia Maria Lumen B. Isleta and members of the Philippines and Indonesia Inter-Agency Task Force for the Operationalization of the D-G-B Roll-on/Roll-off (RoRo) Route gathered in Jakarta on Jan 17, 2017, to discuss preparations for the maiden voyage of the RoRo, which will connect Davao and General Santos City to Bitung in North Sulawesi, Indonesia, the Philippine embassy said in a statement here on Thursday.

    The D-G-B RoRo Route under the ASEAN RoRo Initiative aims to enhance maritime connectivity in ASEAN and maximize the use of regional sea lanes.

    The opening of the route is a more cost and time-efficient alternative to the usual Manila-Jakarta-Bitung route, which would take about three to five weeks of shipping time.

    In contrast, direct shipping through the D-G-B route will take only one day and a half of sailing (excluding port stay).

    The route is also expected to spur trade between Mindanao and the Sulawesi provinces in Indonesia. It is also expected to provide greater access for local businessmen to engage in international trade, as well as stimulate other areas of development such as joint tourism promotion, establishment of direct linkages, and increase in investment inflows, among others.

    On Jan 18, Isleta and leaders of the RoRo project task force paid a visit to Manado and met with North Sulawesi Governor Olly Dondokambey to discuss the maiden voyage of the RoRo.

    Meanwhile, The Philippine News Agency (PNA) reported that Philippines President Rodrigo R. Duterte and Indonesian President Joko Widodo will launch the ASEAN RoRo Project on April 28, 2017.

  • Grab rides up Indonesia with $700M investment

    Grab rides up Indonesia with $700M investment

    Grab has announced plans to invest US$700 million in Indonesia over the next four years, as part of efforts to increase its footprint in a market where it has seen growth.

    The Southeast Asian ride-sharing operator said Thursday the new investment would support the Indonesian government’s ambition of becoming the region’s largest digital economy by 2020. It would include plans to set up a research and development (R&D) facility in the capital city of Jakarta, focused on developing technology innovations for the local market.

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    A US$100 million funding initiative also would be introduced to support startups and entrepreneurs keen on driving “financial inclusion” in smaller communities.

    Grab added that its investment followed “a strong year of growth” in the country, with its GrabCar and GrabBike businesses each clocking more than 600 percent growth in 2016. Its range of ride-sharing services were available in several Indonesian cities, including Bali, Bandung, Medan, and Surabaya.

    According to Grab, one in three of its customers in the country used more than one of its services. It said its drivers earned 40 to 70 percent more per hour than the average transport or delivery driver in Indonesia, where it helped generate more than US$260 million in income for its driver partners.

    Indonesia’s Minister of Communication and IT Rudiantara said: “We want all Indonesians to benefit from IT to improve their lives, develop new skills, and build the next wave of global leaders in technology. Grab’s investment to train and hire more ICT professionals and mentor young entrepreneurs will accelerate the growth of Indonesia’s digital economy. This kind of app has to be positioned as a tool to spur and empower people and the economy.”

    Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan added that Indonesia’s growth would require the continued development of its infrastructure, including its public transport network. Stressing the role of technology, he said services that tapped data analytics would better enhance the efficiency and reliability of the national transportation infrastructure.

    According to Grab, the R&D facility in Jakarta would hire 150 engineers over the next two years and focus on developing localised services, including algorithms to support new road regulations as well as a bike-pooling service for nearly 1.4 million commuters in the city. Engineers also would be offered training in Grab’s other R&D centres in Singapore, Beijing, and Seattle.

    By pumping up to US$100 million into the investment fund, Grab said it hoped to nurture Indonesian startups and technopreneurs focused on mobile and financial services, with the aim to better serve smaller cities and communities that had yet to experience the digital economy.

    The ride-sharing operator also would be looking to launch mobile services to bolster access to mobile payments across Indonesia, expanding its own mobile payment services through GrabPay Credits.

    This would further build on its announcement last July to extend its partnership with Indonesian consumer services company, Lippo Group, and enable the payment of retail goods and services its mobile app. With more than 50 million customers between the two companies, the new e-payment platform would allow these consumers to tap their mobile phones or the Grab mobile app to pay for goods and services under Lippo’s retail network, which included department stores, hypermarts, cinemas, coffee shops, and e-commerce portals. Nobu Bank also was participating in this initiative.

    Grab currently operated a network of more than 630,000 drivers across the Southeast Asian region.