Monetizing the Indonesian Internet and Mobile Market

Andi S. BoedimanPlasa.com@andisboedimanandisboediman@gmail.com

Andy ZainMobileMonday@andyzainandyzain@gmail.com

67% of the world population is

on mobile

Mobile is BIG

Source : Tomi Ahonen (Nov 10, 2009)http://communities-dominate.blogs.com/brands/2009/11/the-digital-divide-in-numbers.html

CarPC

TVRadio

Mobile Phone

Mobile is BIG

4x PC ownership

3x TV ownership

Source : Tomi Ahonen (Nov 10, 2009)http://communities-dominate.blogs.com/brands/2009/11/the-digital-divide-in-numbers.html

In IndonesiaMobile

is even a much

BIGGER deal

There will be estimated

210 millions mobile phone

subscribers by end of 2009

(5 times Internet users)Internet Mobile

Source : BMI Report 2009

80% of new phones sold in Indonesia are Internet

enabled.

There are more than

10 millions

3G users in Indonesia.

(5 times broadband users)

Source : BMI Report 2009, inMobi

Indonesia is among the HIGHEST in the world in

consuming mobile advertising

Estimated

over 4 billions ad impression served each month

Indonesia ranks among the HIGHEST in the

world for mobile browsing intensity

661 pagesper month/person

175

350

525

700

Vietnam UK USAChina South Africa RussiaIndonesia

Source : Opera, September 2009

Young Indonesians, aged 8 - 24 years old

have the highest level of mobile phone ownership in the region,

at 80% penetration.

Internet Users in Indonesia

20

40

60

80

2006 2007 2008 2009 2010 2011 2012 2013

in m

illio

n

Internet Users Mobile Internet

In less than 5 years,

half

of Indonesian population will use Internet from mobile access.

What So Big Deal About Indonesia?

The 4th largest country in the world (240M population).

The 5th largest Internet market in Asia (after China, Japan, India and S.Korea).

150M mobile phone users.

What So Big Deal About Indonesia?

Facebook :3rd largest market worldwide (24M users)

Opera Mini :2nd largest market worldwide (after Russia)

Twitter :#1 market for Asia.

Why Mobile is Big in Indonesia?

Infrastructure

Culture

Price

Choices

The Power of FruitPlastic

The Power of FruitPlastic

In emerging market, the usage often driven by bottom of the pyramid

I don’t have Internet on my phone, I only use Facebook.

:)

The Power of FruitPlastic

In emerging market, the usage often driven by bottom of the pyramid

Dangdut vs iTunes

Overkill vs Functional

Embrace Local

Think Outside The Box

The Monetization ModelLooking into monetization potential in Indonesia

bundling commodity & value added

work with Telco/handset for quick

win

advertisingwill grow bigger in a

later stage

epayment & ecommerce

is coexist to grow together

Monetising Model

Digital AdvertisingMobile and Internet Advertising market potential

0

1

2

3

4

5

6

7

1 2 3 4 5 6 7 8

UKGermanyUSAJapanIndia

Percentage of Internet Ad Spend out of Total Spend

0.1%0.2 - 0.5%

0.5 - 0.8%

Adoption of Digital Advertising

Adoption is slow! In Year 3, percentage of Digital Ad Spend

<1%

informationdetik, kompas,

kapanlagi, vivanews, etc

search & portal

google, yahoo, etc

mobile channel

Telkomsel, Indosat, XL, etc

communityFacebook, Kaskus,

etc

Indonesia Estimated Digital Advertising Market(Internet + Mobile)

US $20-30 million

targeting/segmentation

reach to a specific target market

reachmaximum

exposure toreach

awareness

rich mediastimulate

interest forthe product &

servicesadvertised

engagementinteractivity to get

consumer insight &loyalty

consumercore target

market

Value for the Brand

Media Publisher

content & community

Brand

Media Aggregation

reach/segmentation

MediaReseller

price bundling/media mix/CRM

AdvertisingAgency

insight/marketing strategy

value proposition

Advertising Value Chain

Bundling Commodity & Value AddedValue added can be created in various ways to create an attraction factor to commodity products or services

Telkomsel51%

Indosat19%

XL18%

Hutch5%

Axis2%

Mobile 82%

Smart2%

Sampoerna TI1%

Flexi60%

Esia36%

Mobile-82%

Starone2%

Mobile Market Share in Indonesia

GSM Market Share

CDMA Market Share

Cellular45%

Data, Internet & Infotech26%

Fixed Line14%

Interconnection12%

Network2%

Others1%

Telkom Revenue Contribution

Fixed line will be declined and replaced by the growth in fixed broadband. Telco has every intention to grow its digital businesses.

total: 3-4 million users

almost 2 new million

users/quarter

Smartphone

mobile community

user profile & personalization

cheap call & sms

credit

chat & messenger

friends update & microblog

photo sharing

a complete ecosystem

+ =

Commodity Value Added Result

BroadbandContent

SubscriptionContentConnectivity

Commodity + Value Added

+ =

Commodity Value Added Result

Feature PhoneContentHandset

Commodity + Value Added

Bundling with Telco & Handset

By bundling value added service (content/community) with telco & handset will provide a quick win for Internet players.

Unless we have a strong value proposition such as Google, Twitter or Facebook, it’s easier to work on a short term exclusive deal with Telco and handset in order for them to have the benefit to promote your content/community/platform.

Value Proposition

EpaymentEpayment provides the infrastructure for online transaction and ecommerce

• Total credit card from 20 banks: 11.5 million in 2008

• 45% growth in credit card transactions

from 2007 to 2008• USD 10 billion in credit card transactions

in 2008• Major credit card issuers typically set

aside 0.5% funding to be awarded to

customers as points• It is estimated that USD 27 million is set

aside for redemption in 2008 (50% of

issuers)

Credit card in Indonesia

ecommerce and epayment needs each other to become widely

adopted

Ecommerce & epayment Adoption

belibarang.com

Case Study: Plasa.com

Reach a broader market by Internet & mobile

plasa.com m.plasa.com

Provide digital content as well as physical products

mobile plasa.com

Key Takeaway

Work both on quick win monetization by bundling them with the telco/handset as well as long term branding on the Internet for advertising monetization model. Ecommerce & epayment is shaping its way to offer future monetization model.