The countryside encircles the city: the sinking story of Indonesian countryside

The needs of cities and “sinking” areas are not the same, and new localized services are emerging.

Jakarta is a “parallel” city, and many very different things exist side by side in people’s lives.

Parallel to the mosque is a vibrant nightlife, although many neighborhoods are closed after dark. About five years ago, if you wanted to be treated as a ” late night canteen “, the options at hand were very limited-be creative in your own kitchen, or hungry until dawn. But things are changing. Nowadays, you only need to tap on your mobile phone, you can eat the food delivered to your door at any time. Smartphones and stable Internet connections have fundamentally changed our expectations and the way we spend money. Especially urban residents, they are “spoiled” by the convenience brought by food delivery and express delivery.

A similar shift is now taking place in areas with lower population densities in Indonesia. With the continuous construction of new infrastructure, digital development is showing an accelerating trend in emerging economies. According to reports released by Google , Temasek Holdings and Bain & Company, in 2020, about 40 million people in Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand will go online for the first time. This is much higher than the 10 million people in 2018. According to the report, the economies of seven metropolitan areas including Jakarta account for more than 50% of Southeast Asia’s Internet economy, but areas outside the major cities are likely to grow twice as fast.

With the start of these new developments, the people of Southeast Asia than ever more closely in together . So, what exactly do new players in the Internet industry expect from Southeast Asia?

Social media is king

In 2019, Amalia, who worked in a government agency, was transferred to Papua, the easternmost province of Indonesia. For her who was born and raised in Jakarta, moving house means many changes. She told KrASIA: “The Internet connection (in Papua Province) is fairly stable during the day, but it often breaks suddenly at night.”

In the second quarter of 2020, the number of Internet users in Indonesia reached 196.7 million, accounting for 73.7% of the total population. According to a report by the Indonesian Internet Providers Association, from 2019 to 2020, 25.5 million people in Indonesia will go online for the first time.

The countryside encircles the city: the sinking story of Indonesian countryside

According to the report, Java has 56.4% of new Internet users, followed by Sumatra (22.1%), Sulawesi (7%), Kalimantan (6.3%), Bali and Nusa Tenggara. Gala Island (5.2%), and Maluku-Papua (3%).

Just like in other emerging economies, many Indonesians skipped the PC Internet era and used their smartphones to surf the Internet. Most of them used social media, instant messaging applications, and news and entertainment content for the purpose of surfing the Internet.

The countryside encircles the city: the sinking story of Indonesian countryside

Amalia said: “There are some public WiFi options in the urban area. In order to surf the Internet for free, many people spend their time in the public WiFi zone. The Internet is mainly used for entertainment (such as using music streaming) and accessing social media platforms. During the epidemic, People are also beginning to use online learning tools a lot.”

Consistent with Amalia’s observations, East Ventures partner David Fernando Audy said that the needs of new Internet users are definitely different from those of tech-savvy people in metropolitan areas . Often, new users seek to obtain new information and “chew” text and images through search engines before joining a social media network.

“Once they have a high enough internet speed to search and share pictures, they will become active users of social media platforms such as Facebook or Instagram. They will also want to consume content on platforms such as YouTube. In proficient use of the Internet and social media Later, they will go further and contact e-commerce services.” Audy said.

However, digital service providers tend to design and create products based on the needs of urban communities , because they are often pioneers with higher disposable incomes, and cities have denser markets and larger scales. For example, information about restaurants in Jakarta is often easy to find. However, once you leave the metropolitan area, this is no longer the case.

Amalia said: “We have Gojek and Grab here, but they are not as pervasive as in Jakarta. In order to get the latest information, we usually follow the accounts of local communities, such as Info Jayapura on Facebook and Instagram-Facebook and Instagram are us Two must-have apps for .”

Outside of big cities, even though people are no longer unfamiliar with online shopping, they still prefer to use Facebook instead of Tokopedia or Shopee. “According to my experience and observations, people like to use Facebook as a medium to trade goods online because they have a lot of local products to choose from and it is easier to contact local sellers.” Amelia added. In general, social media is the first portal for small, medium and micro enterprises to conduct business online. They started with Facebook and WhatsApp, and may eventually transition to e-commerce platforms to expand market coverage.

Service customization: born for new Internet users

The most competitive market will be super localized services for second- and third-tier cities. Super localization services may focus on group buying and social e-commerce. As far as group buying and social e-commerce are concerned, social networks make people’s consumption habits online, and locals usually act as group leaders or representatives of group buying services. This kind of humane arrangement thus eliminates the potential hesitation of some people in online transactions.

Investors are already increasing the funds given to super localization service providers because they expect the hockey-stick effect to exist: even if the initial sales are low, there will be a sudden increase in sales in the later stages. For example, social e-commerce provider Super recently raised $28 million in a Series B financing led by SoftBank, and KitaBeli raised $10 million in April from AC Ventures and East Ventures. Both platforms sell fast-moving consumer goods in areas outside of major Indonesian cities, and often serve users who have never had an online shopping experience. In Indonesia’s “sinking” areas, social e-commerce is still a new industry. Several e-commerce platforms have emerged in recent years, such as Singapore’s WeBuy and Vietnam’s Mio, which raised seed funding in May.

In addition to the massive demands of consumers, the digitalization of small businesses will also reshape Indonesia’s business landscape. East Ventures predicts in its Digital Competitiveness Report that next year all regions of Indonesia will be connected to the Internet, and by the end of 2022, 18.4 million SMEs will be digitized.

A few start-up companies have already achieved this goal. Startups such as BukuWarung and BukuKas are also on the rise, and they have recently raised huge sums of money. Both companies claimed to have helped the country’s smaller cities millions of SMEs to achieve a number of digitized. At the same time, Mitra Tokopedia, Mitra Bukalapak, GrabKios by Kudo, Warung Pintar and Ula have developed digital management platforms involving inventory and orders for store owners. So far, many digital services are limited to the island of Java, but Audy of East Ventures believes that as the handover of small and medium-sized enterprises is handed over to young people who are “indigenous on mobile phones,” the scope of digital services may expand beyond Java. Area.

Audy said: “Small businesses like community kiosks and restaurants are usually owned by families. As millennials manage these small businesses and become more open to using digital services, there is a resurgence of small businesses. More Small and medium-sized enterprises are willing to sell online, but they often face the challenge of managing several online stores at the same time, especially when most small and micro enterprises lack employees. Therefore, small enterprises’ demand for e-commerce-enabled enterprises will be further amplified. For example, Sirclo, it can empower small business owners to conveniently open and manage multiple online stores.”

Technology changes destiny: digital transformation opportunities in rural areas

The sudden acceleration of digital transformation during the epidemic has brought about multiple impacts-people can receive education better and participate more in social affairs . However, even though people in “sinking” areas now have new information exchange paths, they still need higher internet speeds, stable connections, and localized services.

Indonesian President Joko Widodo said in a speech last year that the new crown epidemic is a catalyst for the transformation of the rural economy. He promised that the government will provide more technology and capital access opportunities. One of the government’s public plans is the construction of the optical cable network Palapa Ring, especially in eastern Indonesia.

The epidemic caused companies and public organizations to allow employees to work from home. Many available productivity tools and collaborative office tools, coupled with higher internet speeds, make it possible to work from home. Many people who live and work in cities return to their hometowns to save rent and living expenses. If this office system continues in the post-epidemic era, urbanization may slow down, and people living in small towns will be able to remotely work for companies anywhere in the country. This provides new opportunities for residents of second- and third-tier cities, and may even change the way offices and corporate headquarters operate in the near future.

Text | Yuan Haoyan

Editor | Zhao Xiaochun

Picture|Original picture

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-countryside-encircles-the-city-the-sinking-story-of-indonesian-countryside/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-07-13 04:36
Next 2021-07-13 04:40

Related articles