PRecious Communications together with our partner, BOI Research, have published a joint report revealing the startup scene in Indonesia based on a survey of 23 startup CEOs and managers all over Jakarta, Bandung, and Denpasar.
The report focuses on issues in the Indonesian startup ecosystem, along with the challenges and opportunities the startups in Indonesia are facing. You can download the full report on “The Current State and Future Outlook of Startups in Indonesia” here.
Lars Voedisch, Managing Director of PRecious Communications, pointed out, “The start-up scene in Indonesia is thriving and dynamic. While Singapore provides a comprehensive support system, start-ups in Indonesia become major successes in spite of infrastructure and business environment challenges within the country.”
E-commerce, education and healthcare can be promising industries in the upcoming years as the government has allocated a huge budget in these sectors. Investments are expected to grow in the future as investors and venture capitalists will get tax incentives of up to 100% for a maximum of ten years if they invest in the small-medium enterprise. This is an opportunity for startups development in the country.
However, starting a business in Indonesia is still more difficult and takes more time than neighbouring countries, but startups have understood this and usually hire professionals to deal with setting a company. Spending 2 to 3 months or more for setting up a company is seen as a given.
Another challenge faced by startups is that they still don’t plan the financial aspect thoroughly and rely on private money. Many startups don’t survive because they can’t find financing needed to run the business. Majority of local startups still rely on friends/family for financing.
All companies mention that their sales have been growing, but the majority of them are still not profitable but expect to meet the BEP 3 to 5 years after they start the business. The low brand equity and high competition are the main factors of slow sales performance.
Getting the needed talents is difficult as Indonesian graduates are not the most workforce ready. Indonesian universities don’t provide enough practical skills that will be useful in the workplace.
More than half of the companies provide training to their employees, mainly focusing on technical skills. Meanwhile few companies are unable to arrange regular capacity building due to limited time and lack of people available.
For more information, please contact
PRecious Communications Indonesia