Equity Research Technology See important disclosure at the back of this report www.danareksa.com Technology Thursday, 19 August 2021 OVERWEIGHT Oiling the flywheel Foundations are in place with solid GMV in ecommerce despite ups and downs during Covid-19, and the sector is projected to grow due to attractively low penetration and favorable demographics. New start-ups and digital enablers empower merchants to sell more and add velocity to blooming ecosystems. Players venture expansion in new attractive markets to embed on their platforms. GMV growth offers the basis for positive profitability dynamics which can support the new expansion and add spin to one’s ecosystem flying wheel. A new horizon by hitting capital markets. Internet players like GoTo, Bukalapak and Traveloka have laid the foundations with relatively quick market acquisitions in e-tailing commerce (C2C, B2C, B2B), transport, F&B, Media, and Travel. They hit the capital markets to seek funds and this signals a new horizon in our view, whereby players gather new ammunition, shareholder diversification, and room to forge business alliances. More penetration, digital enablers and new markets. In the new horizon, we expect greater e-tailing penetration from 21% by onboarding merchants and sellers in online platforms to drive larger GMV. Ridehailing and last-mile logistics will seek new geographic coverage in non-tier 1 cities and deeper penetration to support GMV growth. Moreover, logistic improvements will support the growth of e- groceries. We expect BNPL to support ecommerce and greater traction on fintech solutions. We also expect more virtual products and investment products such as mutual funds which are less than 1% in Indonesia. Digital penetration in Healthcare and education offer bundling prospects and tap attractive population segments. Gluing the ecosystem by nurturing brand awareness. Current competition requires an omnichannel presence, making an online marketplace, O2O inseparable at this point. Investments will continue to flow to improve the brand and platform awareness, improve its capabilities and security, drive personalization with Cloud data and AI to safeguard GMV market share. A competitive brand will incentivize merchants & UMKMs to onboard and stay with the platform. All-commerce with a focus on B2B and cost management. Ecommerce players lay more focus on merchants/agents to improve supply and enhance GMV by using O2O schemes. Quick wins can be realized with the supply of chain gains, cutting costs, while a) more same day deliveries b) access to merchants and consumer lending support turnover growth. Cloud computing & analytics, digital engagement and advertising should be more effective with larger penetration and more big data. This elaboration is crucial to drive consumer digital demand, which in return boosts the supply of products/services effectively adding velocity to ecosystem’s flying wheel. The flying wheel is an autonomous function, rendering cash burning less of a priority. GMV expansion with new coverage. GRAB ridehailing in SE Asia projects to soon be positive EBITDA, but we understand e-payments service are a financial drag, including Gojek as well, due to a lack of customer loyalty. But they are important in onboarding users to more sophisticated fintech services. Both injected capital to Linkaja with a view to support their digital campaigns in non tier 1 and ex-Java coverage expansion. We also understand that Covid-19 will offer lasting tailwinds for contactless activities. Lastly, though we believe social commerce has strong roots, more micro business will eventually be enticed to onboard more formal platforms. Initiate with Overweight. We start our coverage with Bukalapak, which addresses supply inefficiencies by empowering the end-seller, expecting to fuel GMV growth from the backbone of Indonesia’s society. x Niko Margaronis (62-21) 5091 4100 ext. 3512 [email protected]
Transcript
Equity Research Technology
See important disclosure at the back of this report www.danareksa.com
Technology Thursday, 19 August 2021
OVERWEIGHT Oiling the flywheel
Foundations are in place with solid GMV in ecommerce despite ups and downs during Covid-19, and the sector is projected to grow due to attractively low penetration and favorable demographics. New start-ups and digital enablers empower merchants to sell more and add velocity to blooming ecosystems. Players venture expansion in new attractive markets to embed on their platforms. GMV growth offers the basis for positive profitability dynamics which can support the new expansion and add spin to one’s ecosystem flying wheel.
A new horizon by hitting capital markets. Internet players like GoTo, Bukalapak and Traveloka have laid the foundations with relatively quick market acquisitions in e-tailing commerce (C2C, B2C, B2B), transport, F&B, Media, and Travel. They hit the capital markets to seek funds and this signals a new horizon in our view, whereby players gather new ammunition, shareholder diversification, and room to forge business alliances. More penetration, digital enablers and new markets. In the new horizon, we expect greater e-tailing penetration from 21% by onboarding merchants and sellers in online platforms to drive larger GMV. Ridehailing and last-mile logistics will seek new geographic coverage in non-tier 1 cities and deeper penetration to support GMV growth. Moreover, logistic improvements will support the growth of e-groceries. We expect BNPL to support ecommerce and greater traction on fintech solutions. We also expect more virtual products and investment products such as mutual funds which are less than 1% in Indonesia. Digital penetration in Healthcare and education offer bundling prospects and tap attractive population segments. Gluing the ecosystem by nurturing brand awareness. Current competition requires an omnichannel presence, making an online marketplace, O2O inseparable at this point. Investments will continue to flow to improve the brand and platform awareness, improve its capabilities and security, drive personalization with Cloud data and AI to safeguard GMV market share. A competitive brand will incentivize merchants & UMKMs to onboard and stay with the platform. All-commerce with a focus on B2B and cost management. Ecommerce players lay more focus on merchants/agents to improve supply and enhance GMV by using O2O schemes. Quick wins can be realized with the supply of chain gains, cutting costs, while a) more same day deliveries b) access to merchants and consumer lending support turnover growth. Cloud computing & analytics, digital engagement and advertising should be more effective with larger penetration and more big data. This elaboration is crucial to drive consumer digital demand, which in return boosts the supply of products/services effectively adding velocity to ecosystem’s flying wheel. The flying wheel is an autonomous function, rendering cash burning less of a priority. GMV expansion with new coverage. GRAB ridehailing in SE Asia projects to soon be positive EBITDA, but we understand e-payments service are a financial drag, including Gojek as well, due to a lack of customer loyalty. But they are important in onboarding users to more sophisticated fintech services. Both injected capital to Linkaja with a view to support their digital campaigns in non tier 1 and ex-Java coverage expansion. We also understand that Covid-19 will offer lasting tailwinds for contactless activities. Lastly, though we believe social commerce has strong roots, more micro business will eventually be enticed to onboard more formal platforms. Initiate with Overweight. We start our coverage with Bukalapak, which addresses supply inefficiencies by empowering the end-seller, expecting to fuel GMV growth from the backbone of Indonesia’s society.
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The low hanging fruits of Data Connectivity with online services saving customers money & precious time. Digital Internet companies offer efficiencies in the procurement and fulfilment of goods/services for the mass population. Marketing, Procurement, fulfilment, Transport/Delivery of goods and services is improved for the supplier while they can be now available on-demand for the consumer.
Ecommerce Mothership. The Ecommerce marketplace is the birthplace and mothership platform for internet companies while adjacent sectors can foster alongside on strong foundations.
Exhibit 2. Diagram: disruption creates value transfer and creation with platform integration
Source: BRI Danareksa Sekuritas
Value Transfer & Creation with platform
integration
Traditional Brick Mortar retail stores
O2O physical stores
Modern convenience stores. Mini markets are nimble for
expansion, sophisticated, penetrating dense areas
Warungs.Smaller than mini
markets, less sophisticated, very attractive footprint
Large brick mortar /Supermarkets
Most impacted from Covid19, adapt to
new economy
Traditional financial intermediaries
Threat from branchless banking, lower cost of funds
Travel agents Tend to be replaced by online
bookings (OTA). Disruption accelerated with Covid19
Transport OwnersPositively disrupted as
business vol grows, monetizing vehicles faster
Healthcare companiesModernization accelerated, more private investments and healthcare availability
Education systemOpportunities for diverse learning, and tap young
demographics
Ecommerce platforms & marketplaces
Fintech Platforms
Entertainment / social Platforms
Media Production houses Competition in Adex from
sophisticated SosMed, digital channels. Room for SVOD for
local content
Media aggregatorsCollect crème de la crème
content, and negotiate favorable terms
Last mile transport platforms
F&B sectorPositive overall impact on consumer experience, with elevation of food delivery
service & awareness
FMCG distributors / Wholesalers
Will continue being disrupted, as ecommerce
players exploit inefficiencies
On-demand food delivery
BRAND DISTRIBUTION CENTRE
BRAND/MANUFACTURER
GT DISTRIBUTOR
WHOLESALER
RETAILER / (Warung)
STREAMLINING DISTRIBUTION
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Exhibit 3. E-tailing core players
Comp General Info + Matrix Affiliations Features Key Shareholders Valuatio
n
Bukalapak
90 million users Average daily transactions: 2 million GMV: $4.93 bn (2020) TPV: Rp 4.29 bn (2020) Employees: 2000+ Launched: January 2010
FMCG: Unilever, Danone, CocaCola Amatil, Heinz ABC Indonesia, Garudafood, Suntory Garuda, UltraJaya Gaming: itemku Tech: Microsoft, Google Financial services: Standard Chartered Bank, Bank Mandiri, Bank BRI, Bank Syariah, DBS, Tanamduit Insurance: Igloo Singapore Groceries: HappyFresh Janio 6.9mn Mitra warungs
Online marketplace, blog, Cellular top-ups and packages, bill payments, investments, loans, transportation ticketing, social services. - Bukalapak listed on the Indonesian Stock Exchange on August 6th 2021, at a price of Rp 850 per share, for approx. Rp 21.9 trillion in proceeds.
PT Kreatif Media Karya (23.93%), API 9hong Kong) Investment Limited (13.05%), Archipelago Investment Pte. Ltd. (9.45%), Achmad Zaky Syaifudin (4.32%), Muhammad Fajrin Rasyid (2.64%), New Hope OCA Limited (3.16%). Batavia Incubator Pte. Ltd (2.47%), Mirae Asset-Naver Asia Growth Investment Pte. Ltd (1.80%), UBS AG, London Branch (1.86%), Willix Halim (1.40%), Others (37.32%)
Softbank (35.35%), Alibaba Group (28.25%), Radiant (10.6%), Sequoia India (8.05%), William Tanuwijaya (4.66%), Anderson Investments (3.28%), Leontinus Edison (1.9%), Google (1.64%), East Ventures (1.08%), DreamFund (1%)
Blibli Number of users: 18.52 million Founded: 15 August 2011 Owner and founder: Djarum Country: Indonesia
DANA, Maybank Finance, garasi.id, Hypermart, BCA, Galeri Indonesia, Marriott Business Council Indonesia, OVO, Foodcycle, Pertamina, CARRO, Samsung, Monstore, Jangkau, Indodana, Walt Disney, Unilever, Central Department Store,
Online marketplace, Blibli Hasanah, Blibli Paylater, Blibli Mitra. In 2020 starts its 1st offline store Bliblimart Collaborated with BCA Digital to integrate Blibli with the digital banking application "Blu".
Djarum Group, GDP Ventures
N/A
Shopee
users: 93 million (2020) Avg. daily transactions: 2.8 million GMV: $14.2 bn (2020) Employees: 20,000+ Countries: Singapore, Malaysia, Indonesia, Thailand, Taiwan, Vietnam, Philippines, Mexico, Brazil, Chile, Colombia Founded: 5 February 2015
PGN, Pertagas, Badak LNG, Danone, Bank Syariah, Sekolah Ekspor, Snack Video, Kadin, SMESCO, Bank Mandiri, Pegadaian, Unilever, Abbott, Kickfest, Suzuki, Hypermart, Traveloka, JCB, J&T Express
Online marketplace, cellular package top-ups, bill payment, transportation ticketing, Shopee supermarket, Shopee Food - Integration of ShopeePay with QRIS will be beneficial to support MSME Shopee has in-house Logistics: Shopee Express
Subsidiary of Sea Group. Sea Group shareholders is Tencent: 39.7% Blue Dolphins Venture: 15% Forrest Li: 20% Gang Ye: 10%
Last quoted valuation: USD 120 billion - Sea Group
Lazada
Number of users: 30.52 million GMV: $4.5 bn (2020) Countries: Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam Founded: 27 March 2012 Owner: Alibaba Group Founders: Rocket Internet Employees: 10,000+
Grab, OVO, Telkomsel, Lion Parcel, UC Browser, IDexpress, Mastercard, Pakuwon Group Jakarta, Bhinneka, L'Oreal, GoSend, EVOS, Chilibeli, Taobao, JNE
Online marketplace, LazMall key strengths: e-commerce, technology, and logistics. Lazada has also partnered with the government in Kakak Asuh UMKM in attempt to provide a mentoring program for SMEs to digitalise.
Number of users: 300,000 (Jan 2021) GMV: $600 Mn (Jan 2021) NMV: $6 bn Countries: Indonesia (500 cities) Launched: January 2019 Founder: Stevensang Employees: 322 Merchants: 100,000+
Bank OCBC NISP - Online marketplace where wholesale and retail goods, specifically in FMCG, Point-of-sale system, order management, logistic tracking, and payments. - GudangAda partners with banks to provide working capital for SMEs, With their latest $100 million Series B funding to develop AI-based tools that can provide personalised recommendations for merchant customers.
Asia Partners Fund Management, Falcon Edge Capital, Sequoia Capital India, Wavemaker Partners, Pavilion Capital, Alpha JWC Ventures
$135.9 million
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Acommerce
Clients: 173. Notable clients: Adidas, Samsung, L'oreal, Unicharm, Ray Bann Staff: 705 Fullfilment centers: 8 Countries of operation: 5 HQ: Bangkok, Thailand
Amazon web services, Adobe solutions partner, Brand IQ, Salesforce, DHL, DKSH, Azure, Google Analystics, Magento, Facbook Blueprint, Lazada, Shopee, Amasty, Kerry Express, Line, crieo, ShopifyPlus Invested in Floship in 2015
Ecommerce enabler helps businesses acquire, activate & retain customers; store & deliver products; manage orders & data. Services: Ecommerce strategy consulting, Webstore development, Brand Store operations, Performance Marketing, Warehousing & Fulfilment, Shipping & Delivery, Customer Care Solutions, IQ Suite
Emerald Media, MDI Ventures, DKSH, January Capital, Sinarmas, Kohlberg Kravis Roberts, Indies CApital Partners
Last quoted valuation: EUR 55-82 Mn 2020 est.)
JD.ID 14 Categories Areas: 365 Cities in Indonesia Launched: 2015 Number of products: 100,000 SKU (2016) Employees: 1,001 – 5000 (Techinasia) Warehouses: 12 in Indonesia
Online marketplace, cellular top-ups and packages, bill payments, accommodations, flights, Buy Now Vacation Later, Google Play Vouchers, loyalty membership, JD Life, JD affiliate, Wellio by JD.ID, JD HUB, JD.ID X JD.ID has launched its newest O2O store (online to offline), Wellio. Opened JD.ID X in 2018, followed by JD HUB.
JD.Com, Gojek, Provident Capital
Last quoted valuation: EUR 909 Mn 2020 est.)
Source: BRI Danareksa Sekuritas
Exhibit 4. Mitra networks in the e-commerce market
Mitra providers Founded Investors Number of mitras Notes
Mitra Bukalapak Jan-18 Owned by Bukalapak 8 million (offline) + 6 million (online)
Mitra Tokopedia Dec-18 Owned by Tokopedia 9.9 million
GrabKios Kudo started in
2015; rebranded as GrabKios in July 2019
Acquired by Grab 2.8+ million (Q4
2019) Kios acquired by Grab to form
GrabKios for $100 million
Warung Pintar Dec-17
Investors: East Ventures, Vertex Ventures, Jerry Yang, Triputra Group, OVO Fund, Pavilion Capital, Digital Garage, SMDV, LINE Ventures, Insigna Ventures Partners
500k (2021)
Owners: Agung Bezharie, Harya Putra, Sofian Hadiwijaya
- Acquired Limakilo in 2019 (farming/agriculture startup) and
Bizzy Digital (logistics company) in Feb 2021 for $45 million
SRC Jan-19 Owned by Sampoerna 120k (Nov 2020)
Mitra Kami Jul-19 Owned by Nestle Indonesia N/A
GudangAda Jan-19
Investors: Asia Partners Fund Management, Falcon Edge Capital, Sequoia Capital India, Wavemaker Partners, Alpha JWC Ventures, Pavilion Capital
150k (Aug 2020) Owner: Stevensang
Mitra Shopee Feb-20 Owned by Shopee 3+ million (Q4
2019)
Warung Pangan 2020 Initiated by Kementerian Koperasi dan UKM &
Kementerian BUMN 31k (Jul 2021) Developed by PT BGR Logistics
Other initiatives: Djarum Retail Partnership (partnered with Mitra Blibli), Gudang Garam Strategic Partnership
Source: BRI Danareksa Sekuritas
We understand there will be competition of customers onboarding onto the formal market.
E-commerce has blossomed in Indonesia predominantly based on 2 key pillars. First is the social commerce that grew by riding on the proliferation of the social media. Sales of goods can be conducted with/without the support of sosmed/platform enabler that can save costs for the merchant.
Second, is the growth of horizontal internet players, the e-tailers who can provide online platform to conduct sales on a massive scale, selling volumes of the smallest to the largest value size items.
E-tailers have more localized focus, whilst social media can propagate effects of digital marketing better at this point in our view.
E-tailers have the innate ability to disrupt and raise the efficiency in retailing. This is possible thanks to their key assets of technology and human capital needed to continue innovate and improve their capabilities. In that respect, they appreciate the qualities of omnipresence in consumer experience and therefore seek partnerships via Online to Offline (O2O) with disrupted retailers who have relied on their physical stores as a point of sales to generate turnover till now. One key trait of brick mortars, is their unique prominent locations in dense areas that makes them attractive for showcasing goods. However we think they have also fulfilment capabilities that can be realized.
Most recent example, is when Gojek bought stake in Matahari Prima (MPPA IJ) recently. Moreover, Amazon has ~503 Whole Foods physical stores currently, and Alibaba runs 232 HEMA physical stores, while Americanas (AMER3 BZ) has 2,155 physical stores. Those are some examples that emulate a form of O2O to serve omnipresence objectives. We do not however expect Gojek owning significant stake in MPPA in near future, primarily based on the principles of sharing economy.
Exhibit 5a. E-tailing and Social commerce coexistence Exhibit 5b. Forms of Social Commerce
Source: McKinsey Source: Redseer
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Exhibit 5c. Traditional retailing moving to forms of e-commerce
Source: BRI Danareksa Sekuritas
The early digital foundations:
➢ Early tangible and quick wins on a mass scale: Internet companies have the upper hand sticking to core principles of sharing economy – light capex models without the commitment of a long capex cycle, making them resilient, adaptive while building sustainable ecosystems. Moreover, they have the ability to empower existing sector structures and practices, and onboarding them into new digital processes.
➢ The technology ecosystem is made possible thanks to improved data connectivity for on-demand services and platforms to flourish. This is a massive disruption in the way business sectors are affected across the board. E-commerce players create value by addressing several fulfilment innovations: a) last mile ridehailing & logistics and b) payment services. Data connectivity was a major factor in democratizing platform benefits to internet users on a mass scale. Moreover, on-demand service creates a new level of competition in the online consumer space.
➢ The sharing economy expands the reach and impact of platform economics. Unbundling the value chain process allows merchants, enterprises and even SMSEs theoretically to address and sell for all ticket size needs and for an unlimited number of users and unlimited use of the platform and interface without uncontrolled IT and marketing spending.
➢ With a sharing economy. IT budgets do not carry long periods of capex cycle either. The velocity to go to market is greater with a tech company. This further expands to entire society as it unlocks more value creation for every economic unit in the market.
Exhibit 6. Cost comparison of cloud computing and traditional hardware
Source: AWS Amazon Indonesia
Warungs, Mom & Pop stores
Distributors / Subdistributors
Supermarkets
Convenience stores:
Minimarkets
Wholesaler
E-commerce
Online Marketplace
Physical stores
Vertical playersE.g. Zalora &
Sephora
General Trade
Modern TradeBrick & mortar
Social CommerceSales made
through Social Media
Wholesale & Retail Trade (~64% of
MSMEs)
Warungs, Mom & Pop stores → O2O
Supermarkets → O2O
Minimarkets → O2O
Direct selling
Backend enablers
Community based selling
Influencer aided selling
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Transportation and Logistics sector; the key enabling ecosystem sector
Last mile businesses like ride-hailing so far works as a supporting function for ecommerce and other adjacent services. The controlling shareholder of UBER was forced to exit due to intense competition and challenging economics and was acquired by Grab.
We relay here the thoughts of our logistics analyst, Ignatius Prayoga The change of transportation has been rapid since the digitalization era, starting with online motorbike ride hailing. This national trend was started by Gojek followed by other transportation companies such as Grab and Uber. Then, these companies expanded their services to car ride hailing which ran head-to-head with transportation businesses in Indonesia, especially in Jakarta. More expansion to other businesses went more rapidly given integration of payment services to the business which taps more markets such as ecommerce, food and beverages, home services, shopping services and other initiatives, with the goal to be a SuperApp in Indonesia. We believe that vast service coverage of business that relies on transportation and a large number of ecosystem drivers will benefit start-ups.
Exhibit 6. Contribution of Gojek to Indonesia Economy in 2019 Exhibit 7. Gojek business coverage
Source: FE UI, BRIDS Source: Company, BRIDS
Digitalizing the transportation industry. In the past 6 years, we observed that transportation companies are making their way to digitalize their business to better reach their targeted customers, fleet optimalization and find optimum pricing schemes through an App. We see exponential growth of digital transportation use as it is affordable, easy to order and customize. As for the supply side, motorcycles have been a good choice since they are affordable and easy financing for the driver and more agile for short-medium distances. Furthermore, the partnership formed between digital transportation companies and the driver is relatively flexible so that the driver can work at their own pace. Currently, ride hailing services such as Gojek have 2mn partners while Grab has 2mn partners and is available in 167 cities across Indonesia. We think tapping the transportation sector is the key for creating an ecosystem that connects other means of businesses, especially for merchants.
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Source: APJII, BRIDS Source: Nielsen, BRIDS
Creating an ecosystem of customers and drivers. A digital transportation company now aims to be a super app that can serve all customers needs. Therefore, we think the prevailing company can reach customer engagement as much as possible by fulfilling their daily needs to maintain active use through an ecosystem. A digital transportation company is not only building a client base ecosystem but also the drivers. This large group of drivers is a great enabler to deliver many types of services to customers. Moreover, the initiative creates more job alternatives
Exhibit 10. Number of Gojek Drivers Exhibit 11. Gojek partner monthly income average, 2019
Source: FE UI, BRIDS Source: FE UI, BRIDS
Connecting merchants and customers instantly. As ecommerce has been showing rapid transaction growth in the past 5 years, digital transportation companies started to provide instant and same day services that allow customers to obtain purchased goods on the same day. The same initiative is also applied in food and beverage merchants which allows customers to get fresh meals right in front of the door. According to Nielsen Research, more people tend to purchase food from delivery platforms than dining in which indicates a new trend of ordering food, especially in urban areas. Furthermore, we notice a significant amount of new SMEs that operate in the food and beverage business. We think these initiatives improve SME capability to deliver their goods to customers. Besides instant transportation, food and beverage merchants can get more benefits from promotion in the platform which enables SME to grow rapidly, especially during the pandemic. According to research conducted by McKinsey, 34% of respondents used food ordering applications more often during the pandemic. Furthermore, 65% of Gojek respondents use Gofood more frequently compared to before the pandemic. A report from Momentum Works suggests that Food delivery platforms reach GMV of USD 3.7bn in 2020 with 53% of market share dominated by Grab food and the rest by Gojek.
Exhibit 12. Food delivery market share in Indonesia in 2020 Exhibit 13. Food and beverage order method in a week
Source: Momentum Works Source: Nielsen, BRIDS
-
0,50
1,00
1,50
2,00
2,50
3,00
2015 2016 2017 2018 2019 2020
Mn
Dri
vers
0,01,02,03,04,05,06,07,0
No
n-
Jab
od
etab
ek
Jab
od
etab
ek
No
n-
Jab
od
etab
ek
Jab
od
etab
ek
No
n-
Jab
od
etab
ek
Jab
od
etab
ek
Go-Ride Go-Car Go-Life
IDR
Mn
/mo
nth
1,96 1,74
Gojek Grab food
0 0,5 1 1,5 2 2,5 3
Phonecall
Takeaway through restaurant…
Takeaway with phone order
Dining in
Takeaway
F&B app (GoFood, GrabFood, etc)
Times per week (x/week)
9
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Ecommerce boom – Logistics sector game changer. As Ecommerce improves rapidly in Indonesia, the demand for fast and cheap delivery service increases significantly. Last year, the total parcels served from digital orders reached ~5mn parcels based on several logistics company estimates and BI digital payment. Furthermore, the pandemic changed the playing field whereby people changed the mode of transaction to online. According to Gojek, ecommerce delivery increased by 42%yoy during Lebaran. Meanwhile, Anteraja’s parcels per day delivered grew by 2x in Jun21 vs Mar21 even in the pandemic. This resilient growth shows a strong correlation between ecommerce growth and expedition growth in the new economy.
Consolidation and alliances are starting to form. As competition gets tougher, more alliances and consolidation are seen in transportation services. For example, Blue Bird put its services on the Gojek platform to boost orders and awareness. On the other hand, Gocar, a car ride hailing business from Gojek, needs more cars to fulfil customers’ orders. Furthermore, Anteraja is now collaborating with Gojek and Grab to improve its last-mile delivery service which involves developing an ecosystem to improve services to customers. Ecommerce platform starts to build its own fulfilment center. To ensure the deliverables of goods and seizing opportunity in the logistics industry, several ecommerce companies are establishing their own delivery services. For example, Shopee formed Shopee express that integrates its automated warehouses and delivery service. We also observed several retailers already utilize this service and third-party fulfilment service which may cut their logistics costs. Several independent fulfilment companies are seen to be operational offering a wide range of additional services such as an order and chat management system, quality control service, inventory and packaging management system, return service and many others. Ecommerce companies can incorporate delivery fees to merchandise prices and state zero delivery fees which might be a threat to other logistics companies. This marks the need to expand to other businesses such as C2C and serve other start-ups.
Exhibit 16. Fulfillment service diagram Exhibit 17. Independent fulfillment company in Indonesia
Exhibit 14. Ecommerce delivery method in Jakarta, 2019 Exhibit 15. Anteraja’s parcels per day growth
Source: BPS DKI Jakarta, BRIDS Source: Company, BRIDS
Online courrier
31%
Post Mail23%
Direct delivery by
seller22%
Pick up in designated
area22%
Others2%
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Source: BigCommerce Source: Google first page, BRIDS
Light assets and operational excellence are keys with archipelago characteristics in Indonesia. The Indonesian region comprises of scattered islands, although most economic activity is still centralized in Java. The existence of ecommerce and expansion of cellular signals has enabled SME across regions to participate in the market which increased the need for the availability of delivery in particular regions. Therefore, logistics companies should have wide coverage and systems that are reliable enough to meet client expectations. We think that logistics companies that have the lightest assets and can maintain operational excellence will be best placed to seize the opportunities. Price competition can be intensified. Like what we have seen in the telco and transportation industry, services of the same quality will lead to a price war. This may also be the case for logistics companies. Currently, capital is being burned to promote delivery services to build the customer base of logistics companies in ecommerce platforms through free of charge services or discounts. However, we think customers may not be loyal to certain companies as they are elastic to the price changes. As such, we think the logistics company that can survive this imminent challenge is a company that is able to maintain its operation quality such as service punctuality, safety of the goods and reasonable price. According to interviews with several logistics companies, Indonesia still needs more delivery capacity to meet ecommerce’s rapid demand. More coverage expansion and new players are needed to serve this developing new economy. Thus, we think that the price war would not happen in the short term, as the industry is still developing.
Exhibit 19. Delivery fee comparison
Source: Ecommerce platforms, BRIDS
Jakarta utara to Jakarta Selatan Bandung to Jakarta Selatan
Signite Partners, STIC Investments, TIS INTEC Group, Mitsubishi UFJ Financial Group, Invesco, Experian Ventures, Softbank Group, Tokyo Century Corporation, Microsoft, Kaskornbank, Booking Holdings, Kia Motors Company, Hyundai Motor Company, Yamaha Motor Ventures, All-Stars Investment, Lightspeed Venture Partners, Sino-Rock Investment Management, Mirae Asset Financial Group, Macquairie Capital, Oppenheimer Funds, Ping An Capital, Vulcan Capital, Finch Capital, HSBC, Toyota, Uber, SK Group, Didi Chuxing, Emtek Group, Honda Motor Co., China Investment Corporation, Coatue Management, 500 Accelerator, Qunar, Hillhouse Capital management, Vertex Ventures SE Asia, GGV Capital, Tiger Global Management, 500 Startups.
USD 11.856 Bn Last quoted valuation: USD 39.55 Bn (2020)
J&T 3PL
J&T operates in Indonesia, Philippines, Singapore, Cambodia Founded: 2015 HQ: Jak, Indonesia 100 gateway centers 4000 operating points 30,000 Employees 8,000 vehicles, 10,000 collection points
Crewdible, Titipaja, Shipper, This Is April, CuMart, Jet Commerce, PT ACT Technology, Oppo, SHopee, Tokopedia, Bukalapak, Hijabenka, Berrybenka, Datascrip, Sunchila, Janio, ShopeePay, Trigana Air
EZ: 2-3 days delivery Eco: 5-14 days delivery, to Sumatra, Kalimantan, Sulawesi, Bali J&T Super: 1-2 days delivery, covering JABODATABEK - J&T received USD 2 Bn from a private equity round led by Boyu Capital. to have its IPO in the US, potentially raising USD 1 Bn. - Started its airline cargo operations, and is expanding overseas. covid-19 tailwinds. Reported to generate 70% of its business comes from foreign markets.
Private Equity Rounds: Sequoia Capital China, Boyu Capital, Hillhouse Capital Group
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SiCepat 3PL
730 locations in Indonesia Founding year: 2014
Tokopedia, Shopee, Bukalapak, Blibli, Jakmall, Zalora, Zilingo, Heavenlights, Even white, Lights. cio, Macadamia house, Klamby, Mayoutfut, Feulis, Ocla, Vanilla Hijab, Male, Kami., Livehaf, Metamorv, Dompet Dhuafa, Alfamart, Volta Indonesia, DigiResto, MCAS Comments: Launch DigiResto, a food delivery chat system and SiCepat Drop Points with MCAS, a parcel drop point solution system. With 940+ parcel drop points.
SiUntung: 15 hour shipping for JABODATABEK and Bandung BestL 1 day shipping for all big cities in Indonesia Gokil: 1-3 day shipping, min 10 kg, for all big cities in Indonesia Halu: Starting from IDR 5,ooo, 1-3 day shipping, for all big cities in Indonesia COD: Cash on Delivery for E-commerce purchases, 8 hour shipping for JABODATABEK, Bandung, Yogyakarta, Solo, Semarang, Surabaya SiCepat Syariah: 2.5% of of shipping fee is donated through Dompet Dhuafa, for non-marketplace transactions H3LO: 1-3 day shipping, discounted price SiCepat Go!: International shipping from JABODATABEK, Bandung, Yogya, Semarang, Surabaya, Denpasar, Medan, Makassar, Max. 30 Kg SiCepat Klik: Tracking system
SeriesB: Indies Capital Partners, Trihill Capital, Falcon House Partners, Daiwa Securities Group, KFF DEG, Pavilion Capital, Kejora Capital, MDI Ventures Funding rounds: Series B: USD 220 Mn led by Falcon House Partners and MDI Ventures Series A: USD 50 Mn led by Barito Teknologi and Kejora Capital Seed round: USD 3.5 Mn led by Kejora Capital
Last quoted valuation: USD 744 Mn (2021)
Waersix 3PL
Cities: 211 Trucks: 50,339 Warehouses: 418 (available in 34 provinces, 100 cities) Founded: 2017 HQ: Jakarta, Indonesia
Transport Warehousing Comments: Waresix expands the first-mile logistic, to complete its mid-mile logistic segment. Waresix opens new transportation routes to improve Indonesian archipelago network. Acquired Trukita along with its 10,000 trucks.
MDI Ventures, EV Growth, Jungle Ventures, East Ventures, Monk’s Hill Ventures, Redbadge Pacific, Softbank Ventures Asia, Pavilion Capital, Emtek Group
Shipping, Financing for vendors (allow vendors to receive payment within 3-5 working days deducted with a facility fee/interest ) .
10100 Fund, Coca-Cola Amatil Indonesia, Sequoia Capital India, Tenaya Capital, Convergence Ventures, Southeast Asian Fund, Alter Global, AC Ventures, January Capital, Agaeti Ventures, Zhen Fund, Innocen Capital, Intudo Ventures, ATM Capital
Last quoted valuation: EUR 113-169 Mn
Purpose of use the funds was altered due to Covid19. funds as a relief fund for its trucking partners so that they can survive financially util company operations return to pre pandemic figures. In addition, the company plans to invest its funds for infrastructure and technology improvement, as well as increasing its workforce with local talents
Shipper
161 warehouses network: 30 cities 25,000 sellers/users (2019) 10 fulfilment centers across Indonesia (2019) Shipper is a shipping & warehousing aggregator
Grab, DPEX, SiCepat Expressm J&T Express, Lion Parcel, GoSend, Indah Lagistic Cargo, SAP Express Center, Alfatrex, Ninja Express, Tiki, Wahana, WooCommerce Plugin, Magento, PORTER, Pakde, JNE, POS Indonesia, Grab Express
Shipping Aggregator (concierge) Warehousing rentals API Integration (Business to shipping/warehousing integration) (2020) series B funding to develop technology and expand its logistics network. Acquired Pakde, - warehousing solutions company, and Porter, local delivery startup so Shipper can process shipping orders themselves.
Prosus Ventures, Insigna Ventures Partners, Floodgate, AC Ventures, DST Global, Y Incubator, Sequoia Capital India, Lightspeed Venture Partners
Last quoted valuation: EUR 229-344 Mn (dealroom Apr 2021)
Nestlte, Unilever, Japfa, Lotte, NPCT1, Prima Jaya Motor
Transporter, Shipper, Ritshop (trucking marketplace collaboration with Prima Jaya Motor), and retail deliveries. Comments: Expanded to Singapore in 2019. Future expansion plan into ASEAN network, with priority to Malaysia, Philippines or Thailand. Focus on FMCG industry in Singapore. New product, RitSea, to focus on maritime transportation. work together with Tanjung Priok Terminal (NPCT1) to digitize an integrated trucking haulage system with the port.
ZWC Partners, Insignia Ventures Partners, JAFCO Asia, Skystar Capital, Golden Gate, Patrick Cheung, Mitsubishi Corporation, Pegasus Tech Ventures, BEENEXT Funding rounds: Seed Round: USD 3Mn led by Insigna Ventures Partners Corporate round: USD 1.6 Mn Series A: USD 8.5 Mn led by Golden Gate
Transporter and Shipper services. Provides financing to partnered transporters.
Monk's Hill Ventures, SeedPlus, Convergence Ventures, Genesia Ventures
Last valuation: EUR 22-33 Mn (Dealroom Nov 2020)
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Comments: Aims to optimize efficiency in the trucking industry, as they report that only 40% of trucks are utilized in Indonesia. Plans to increase transporter partners to 1,000 transporters. And expand and acquire 1,000 shipper (customers) partners. - 2019 In 2021, partnered with Bank Jago to provide financing for Logisly vendors. This will help Logisly increase its available capital for working capital purposes and enable the company to receive more orders. Eximku (Andalin)
95% fullfilment rate Connected to 100+ ports worldwide
Air Cargo & Air Courier, Ocean FCL & LCL, Project Shipment, customers Clearance, Alibaba Gold Supplier (Alibaba partnerships for businesses) Focuses on import and export activities. To boost its GMV to USD 100 Mn by 2021 (Techinasia).
partners: AGM Fullfiment Center, BEST Whs, Weikenn WHs, Citra Whs, Duri Utara Whs, JB Whs, Junior Persada, Gudang Industries Label, Whs Dutamas, Gravity Whs, etc.
- Integrated storage and warehousing facility: provides inventory mgmt, sales report, packaging, return mgmt - SME inventory and storage mgmt. - Introduced micro cold storage facility, which includes freezers, chillers, and cold room storages to customers. Aims to expand this service into 200 points in Indonesia. - Received a USD 1.5 Mn funding from Global Founders Capital. Funds to be used to expand its presence in big cities in Indonesia. Aims to expand operations to be able to complete 20k to 100k transactions per month.
Global Founders Capital USD 1.5 Mn Last quoted valuation: EUR 508 Mn (dealroom oct 2020 est.)
SAP Express Satria Antaran Prima
204 branches (2020) 600 hubs (2020) Fleet: 138 blind van, 43 CDE, 25 CDD, 120 others (2020) No. couriers: 2010 No. of deliveries: 21,747,557 Shipment volume (kg): 33,291,033 Founded in 2014
City and Domestic Couriers, International Express Shipping and Cargo, Waerhouse Management, Mailroom Management Service, Ecommerce, Land transportation, Ocean and Air Cargo, Dedicated Courier, Last mile delivery, retail agent, expeditions, Wood Packaging. First logistic company that Launch COD feature. Payment can be completed with QRIS technology.
In 2018, SAP Express went public. 62% of the funds to pay debt, while 38% working capital. Budiyanto Darmastono (47.76%) Gdex Sea Sdn Bhd (18,00%) Gd Express Carier Bhd (16,50%) Gd Valuegard Sdn Bhd (10,00%) Public (7,74%)
Last quoted valuation: Market Cap IDR 891.666 Bn
PAXEL On-demand
Users: 1.7 Mn+ Completed Deliveries 8.5mn+
1.4 Mn + partnered UMKM (Kontan)
Sameday delivery, PaxelBox, PaxelMarket, PaxelBig, Instant Delivery Targets to expand partnership with UMKM to 2Mn partnerships. Also plans to add more lockets nationwide.
Johari Zein, Susquehanna International (SIG), East Ventures, SMDV, MDI Ventures, Centauri Fund
USD 17 Mn+
Lockets: 230 (2020, katadata) Couriers: 1.5 K couriers (2019, techinasia) Area: JABODETABEK, Cikarang, Cimahi, Bandung, Cirebon, Tasikmalaya, Purwokerto, Yogyakarta, Magelang, Solo, Semarang, Ngawi, Sidoarjo, Jember, Madiun, Kediri, Surabaya, Malang, Banyuwangi, Denpasar, Makassar, Medan
Ninja Express 3PL
Part of Ninja Van (HQ in Singapore) Customers: 88Mn+ Coverage: SouthEast Asia Deliveries: 1.5Mn + deliveries per day
Last mile deliveries, COD, pick up at drop-off points. Lite account: up to 125 parcels per month. Prepaid. Pro Account: up to 125 parcels per month. Postpaid service. receive dedicated account manager, API and Webhook management, schedule pick ups. Comments: Focuses on providing last ile delivery services for businesses: Enterprises, small businesses, and social media seller, etc.
DPD Group, Grab, Geopost, Golden Gate, Intouch Holdings PCL, B Capital Group, Carmenta Capital management, Bangkok Bank, Zamrud Sovereign Wealth Fund
Last quoted valuation: EUR 682 Mn - Ninja Van (Dealroom May 2020 Est.)
Anteraja
Founded: 2019 ASSA Same day, Next day, & regular deliveries Adi Sarana Armada (ASSA) N/A
Drivers: 80K drivers Partners: 5K business partners
Notable customers: Re Juve, EdenFarm, Printerous, MOKA
Courier service, COD, multi stop delivery Sequoia Capital China, Hillhouse Capital Group, Virtruvian Partners, D1 Capital Partners, Boyu Capital, Tiger Fund
Lastvaluation: EUR 9.1 Bn Jan2021
Source: BRI Danareksa Sekuritas
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Exhibit 21. Ride Hailing market shares in SE Asia
Source: TechinAsia
Exhibit 22. Fare relationship between distance and margin gain
Source: Bloomberg Intelligence
The entertainment sector; creating more attachment
Content and entertainment (OTT, gaming, education) itself sees its own secular online growth, with the sunrise of linear TV inevitably due. Linear TV predominantly focuses on FMCG products advertising. With the use of Short Videos, on-demand content - video, music, gaming, educational content and even OTT - advertising expenditure is more efficient and targeted. The Indonesian population is fairly young with solid millennials & younger generation groups.
Moreover, ecommerce fuels digital advertising resilience. This is a two way street with digital social and search advertising fuelling GMV. Cloud analytics can drive precise targeted advertising and create advantages.
➢ The ability for online content to engage is greater, and able to build distinctively separate ecosystems among viewers. Scale is developed with freemium models and where providers can monetize content based on 2 distinct models; advertising and subscription based. We believe content production costs can be contained, as media houses and apps source more content from uploaders and influencers and look for talent who can enrich the experience of viewers.
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Exhibit 23. OTT & Gaming Market players
Comp General Info Affiliations Features Key Shareholders Valuation
Vidio.com
No. of users: 1.1 million (subscribed) per Jan 2021. Founded: October 2014. Operating Region: Indonesia. HQ: Jakarta, Indonesia.
PT XL Axiata Tbk Series, Movies & Entertainment Shows, Sports Shows, International TV, Watch Ad-free
PT Surya Citra Media Tbk (SCMA) - 99.99%
N/A
Disney+ Hotstar
No. of users: 2.5 million (subscribed) per Feb 2021. Founded: February 2015, Acquired by Disney in 2019; integrates with Disney+. Launch in Indonesia: September 2020; Telkomsel as Release Partner. Operating Region: India, Indonesia, Malaysia, Thailand. HQ: India
Telkomsel TV Shows and Movies available in English and Regional languages, Seamless Video Playback, Smart Search, Friendly User Interface, Hot Content Catalogue, Accessible on Google Play and Apple App Store.
Novi Digital Entertainment Private Limited
N/A
Amazon Prime
No. of users: 200 million+ (subscribed) as of Jan 2021. Founded: April 2005. HQ: Seattle, Washington, USA. Operating Countries: Austria, Australia, Belgium, Brazil, Canada, China, France, Germany, India, Italy, Japan, Luxembourg, Mexico, Netherlands, Saudi Arabia, Singapore, Spain, Turkey, UK, USA.
SHOWTIME, STARZ, A+E Network, AMC, Gaia, RLJ Entertainment, DramaFever, Tribeca Short List, Cinedigm, Smithsonian, IndieFlix, Curiosity Stream, Qello, FlixFling, BroadbandTV, DEFY Media, Gravitas, Ring TV Boxing.
Prime Early Access, Prime Exclusive Deals, Day Exclusive Deals, Unlimited video streaming of latest movies, award winning Amazon originals and TV shows from India and around the world, Unlimited, ad-free access to playlists, stations, and millions of songs and albums at no additional cost.
Amazon.com Inc: Mutual fund holders (32.33%), Other institutional (26.64%), Individual Stakeholders (10.88%).
N/A
Viu No. of users: 45 million monthly active users (2020). 1.5 million subscribers in Indonesia (2021) CAGR: 26% over next 3 years. Launched: Oct.2015. HQ: Hong Kong. Operates in : Hong Kong, India, Singapore, Malaysia, Thailand, Philippines, UAE, Bahrain, Egypt, Indonesia, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Myanmar, South Africa.
Mediacorp, GMM Grammy (One 31 Channel, GMM 25)
Unlimited Downloads, Access to all dramas, variety shows, movies and kids animation, TV access via TV app or casting, Full HD (1080p), No video ads.
Media Prima, Celcom Leading internet video streaming service: Highly popular original content, comprehensive library of professionally-produced, professional user generated, and user-generated content. Premium content: user engagement, monetization opportunities.
Other institutional (64.74%), Mutual Fund Holders (14.15%),. Top owners: Baidu (56.2%), Hillhouse Capital Advisors Ltd. (10.21%), Credit Suisse Securities (6.88%), UBS Securities (5.35%).
Last quoted valuation: Market Cap: USD 16.4 Bn (2020)
WeTV 100k users (2019), Launched: 2018. HQ: China. Regions: China, Philippines, Thailand, Indonesia, Malaysia, India.
Xtreme Appliances Video streaming service, supports video-on-demand and television broadcasts
Tencent Video, Tencent
iflix Users: 25 Mn active users (2020). Founded: 2014. HQ: Kuala Lumpur, Malaysia.
Memberships (iflixFREE, iflixVIP), movie of the day, premium TV series (international and local), ad-free premium access to hundreds of movies and TV shows from local and international studios (iflixVIP membership).
www.danareksa.com See important disclosure at the back of this report
RCTI+ Founding year: 2019 MNC Group, Global Mediacom (BMTR)
OTT service, stream movies, series; watch live shows and live events; news media platform. Comments: The company is targeting to reach 40Mn MAU in 2021
MNC Group N/A
Mola TV Founding year: 2019 Polytron, Djarum Group Stream movies and series; live events; sports liveb stream Mola recently switched its strategy to include OTT service due to the Covid-19 pandemic, to cope with the cancelation of football matches.
Djarum Group N/A
Goplay Founded: September 2019. HQ: Jakarta, Indonesia.
TVN Movies (South Korea), Astro (Malaysia)
Live streaming feature (Goplay Live) covering concerts, webinars, talk shows and reality shows, Video on Demand Shows, Pay-per-view (PPV) service, cast feature on Android and Airplay on Apple to watch shows on big screen televisions.
PT Aplikasi Karya Anak Bangsa (Gojek) , Cool Japan Fund
Undisclosed
MAXstream
No. of users: 8.2 million monthly active users (2020) Founded: 2016. HQ: Jakarta, Indonesia
beIN Sports, Vidio.com, WarnerMedia Entertainment
Domestic and foreign films, Live TV Channels (Local and International), TV Shows, Subscription Packages, MAXstream Quota
PT Telekomunikasi Seluler (Telkomsel)
N/A
Noice No. of users: 180k active users (March 2021) Launched: June 2018 as radio streaming platform, added music and podcasts in October 2019. HQ: Jakarta, Indonesia.
PT Quatro Kreasi Indonesia
Podcasts, Music, Radio, Content. Multiple Audio and Content in 1 App, Available to Listen Anytime and Anywhere. Comments: MARI is looking to launch Noice 3.0 by the end of 2021 to monetize the business, enable extra content creators to share podcasts in the app and integrate with other platforms.
PT Mahaka Radio Integra (MARI) - 75%, Alpha JWC Ventures and Kinesys Group - 25%
N/A
Garena No. of users: 80 million daily active users globally. Founed: May 2009. HQ: Singapore
Tencent In Game Features (Smart Ping, Colorblind Mode, Chat Commands, Emotes), Ranked Play, Social (Guide to Clubs), Rewards (XP System Breakdown).
Sea Ltd, indirect shareholder Tencent
Dunia Games
No. of users: 4 million monthly active website visitors (Dunia Games Website). Founded: 2013. HQ: Jakarta, Indonesia
Source for All Gaming (Tips, Guides, Reviews), Latest Gaming News Portal, Purchase Game Vouchers Online (Steam Wallet, Garena, Gemscool, Lyto, Megaxus)
PT Telekomunikasi Seluler (Telkomsel)
N/A
Source: BRI Danareksa Sekuritas
➢ Content and Gaming entertainment, nourishing the digital crowd. Relatively high developing costs to produce titles, and royalty fees. The gaming developers in Indonesia are still at the nascent stage. Gaming and music on the other hand rely on the freemium models, which are largely price competitive in our view and thus need to create a large base. A classic example is Tencent creating a large entertainment ecosystem, whilst Garena of SEA still monetizes on the highly popular Freefire with positive EBITDA subsidizing the EBITDA losses in SEA’s ecommerce biz. We believe local players may benefit from gaming/music as supporting services in a larger ecosystem. Gaming aggregators and voucher resellers is the best fit model in Indonesia so far. Gaming is highly adoptive for mobile/smartphone users apart from game consoles and desktops, to become increasingly engaging with increasing data upload/download speeds and lower data latency improving the gaming experience. Moreover, E-sports, gaming events, influencers, and Twitch-like viewership is adopted by millennials and younger age groups, who may have low financial capital but they are the next consumption decision makers in households. Music aggregators, on the other hand, have the power to create their own content with podcasts addressing current trends finding resonance with users, who may also enjoy live taped content on demand vs. linear supply.
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➢ Social networks and short video drive strong engagement. Their adoption and growth has been rampant and is an essential service. Examples are messaging apps and short video aggregators like YouTube, Facebook & Instagram, TikTok, Vidio.com, MNCN+. SoSMed has the greatest appeal in young age groups. The digital frontrunner China sees unparallel advertising spending on e-commerce as well as on short videos.
➢ Moreover, technology investments such as Facebook Oculus are expected to drive new dimensions on digital content and the gaming experience.
➢ IM messenger services in Indonesia are heavily driven by foreign players such as Whatsapp, Facebook, LINE, Instagram, Viber, Telegram, and Google Duo messengers. Their communication channels can be highly disruptive by introducing fintech and peer-to-peer lending and introducing their own digital wallets and currencies.
➢ WABA whatsapp business accounts also offer support to merchants making available business catalogs and creating shopping carts. DIVA IJ and DMMX IJ of Kresna group adopt and make use of those functionalities to help business traction for their merchants.
➢ OTT will continue to offer paid content services with plenty of room for content differentiation. It is a great supportive service to be part of a larger experience ecosystem to drive engagement. The market is dominated by large deep-pocketed international players: Netflix, HBO, Disney, Amazon Prime, iQiyi, Viu etc. The rise of local champion Vidio.com is an unmistakable bet that relies on local content, sports and taste with own production houses that resonate with local users. MNCN+ and Vision+ are also strong contenders for digital local content with their own production and short videos.
Exhibit 24. Online advertising methods in China: rising of short video share
Source: Bloomberg Intelligence
Travel sector: In anticipation of a rebound. Similarly travel sector saw major disruption easily on a very fragmented market. Despite witnessing major drop in travel turnover, Traveloka itself undertook new directions shifting to food delivery Traveloka Eats and possibly ecommerce.
Exhibit 25. Travel/Ticketing Market
Com General Info + Matrix Affiliations Features Shareholders Quoted Valuation
Traveloka
60 Mn+ app downloads Users: 40 Mn (2021, investor.id) Reach: 8 APAC nations Merchants: 66k+ Accommodations: 60k+ direct-contract accommodations in Southeast Asia, 1 Mn+ worldwide accommodations (including 17k+ villas, 25k+ apartments), available in 100 different
Payment partners: BBCA, BMRI, BBNI, BBRI, Visa, martercards, JCB, ATM Bersama, Alto, Prima, Alfamart, Alfa midi, Indomaret, BCA KlikPay, Mandiri Debit, CIMB Clocks HOtel Partners: L Accor hotels, Aerowsiata, Amazing Hotels & Resorts Indonesia, ARCHIPELAGO, artottelgroup, AZANA, Best Wester, D'primahotel, DHM, Golden Tulip, Horison,
20+ products Transportation: flights, flights + hotel, trains, JR Pass, Bus & Shuttle, Airport transfer, car rental, airport train, flight status, price alert Accommodation: Hotels, Flights + Hotel, Buy Now Stay Later, Villas, Apartments Things to Do: Xperience, Eats, Healthcare Bills (payment): data top up and packages, mobile post-paid, PLN, BPJS Kesehatan, Telkom, PDAM, game voucher, multi finance, cable tv & internet, credit card, PBB, electronic money Others: pay later, gift voucher, insurance, city guides, budget planner, Traveloka Corporates Insights: In April, news that Traveloka is planning to list
EV Growth, Qatar Investment Authority, GIC, Expedia, Hillhouse Capital Group, JD.com, East Ventures, Sequoia Capital, Global Founders
Last quoted valuation: USD 3 Bn (krasia), with potential valiation of USD 5 Bn with SPAC listing. Claimed its near profitable. hotel transaction reached 70-
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countries. Flights: 200k routes, 150+ airlines, 950 airport destinations worldwide Experience: 18k+ things to do SKU's, 1000+ merchant partners across SEA Loans: 6 million+ loans Founded: 2012
Kahum Hotels, Sheraton, Sahid, Terra Hotels, Omega, Parador, Horsion, IHG, Swiss-nel hotel, red planet, Tauzia, Topotels, W house, Marriott, Initiwhiz, Pesonna hotels, Santika Indonesia, SAS hospitality Investments: Member.id, KiotViet, PouchNATION, PasarPolis, Mytour, Pegipegi, Travel Book TREX Ventures: JV with Siam Commercial Bank Pcl - SCB10X) Others: West Java Provincial Goverment, BBRI and BMRI to create designed credit cards, Lalamove
in the US stock market through SPAC, Bridgetown Holdings Ltd. This deal may potentially boost the company's valuation to USD 5 Bn and raise USD 500-750 Mn. -Set up a JV with Siam Commercial Bank to create TREX Ventures, a fintech company to provide financial products to its 16 Mn users in Thailand. In 2018 Traveloka started Buy Now Pay Later facility and created the Paylater Credit Card - Expands through Traveloka Eats with delivery services partnering with Lalamove (both companies are backed by Hillhouse Capital). It is reported that Traveloka Eats charges a lower fee of 15% of each order, compared to 20% from GoFood and GrabFood.
Capital
75% pre pandemic level.
-Covid 19
effect: lowest business rate, refunds increased by 10x since february (1 Mn flight refund worth USD 100 Mn), 100 employee layoffs (10% of workforce) (Jul. 2020)
Agoda HQ: Singapore Founded: 2005 Owned by Booking Holdings (NASDAQ: BKNG) Focus on APAC region Operation in Thailand Listings: 2.5 Mn+ propoerties in 200+ countries. 200+ Airlines 27 Mn+ reviews Agoda member users: 1 Mn+ (2009)
Accomodations (hotels, homes, private stays, monthly stays), Ground Transportation (airport transfers and car rentals), Flights, Activities, loyalty membership (Agoda Reward and AgodaCash) - Agoda actively improve user experience, lower
acquisition costs, and expand products. Agoda spends USD 4.96 Bn on online marketing annually. Introduced flights aggregator feature in 2019. - In 2021, Agoda sees domestic tourism returning
activity in Thailand, Vietnam, and Taiwan. Waiting for vaccination programs to be completed so international travel recovers. Agoda records higher domestic travel even before pandemic levels.
Owned by Booking Holdings (100%)
N/A
Pegipegi
- 9 Airline partners - 25 k flight routes - 25k+ hotel options - 2.8 k train routes Founded: 2012
Airlines: Citilink, Lion Air, Sriwijaya Air, Garuda Indonesia, Air Asia, Batik Air,, Winfs Air, NAM Air, Scoot Other: BMRI, BBCA, BBNI, BBRI, LG, TLKM, EXCL, LINE, CGV, Samsung, Blibli, Tripadvisor, Wego, Trivago, wonderful Indonesia, etc.
Hotel, Airline, Train, Bus & Travel bookings PegiPegi claims to run its operations independently even after acquired by Traveloka
Train: PT KAI Airlines: Air Asia, KLM, ANA, Citilink, expressair, United Arilines, etc Hotels: Marriott, Hilton, IHG, Best Western, etc. Car rentals: Express, TRAC, Tritama, etc. Activities: Funland, Java Jazz, Waterbom, etc.
Airline ticketing, Hotels, Train tickets, car rental, Event ticketing/booking Flexi ticket: purchases can be redeemed/used within 1 year Instalment payment Comments: Plans to go public through SPAC that will value the company at USD 2 Bn and raise USD 200 Mn.
Undisclosed Angel Investor: USD 1 Mn
Last quoted valuation: EUR 4-5 Mn (dealroom oct 2011 est.)
Source: BRI Danareksa Sekuritas
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GMV latest standings of E-tailers
So far ecommerce customer loyalty is still a working project we believe.
According to GMV data gathered, it appears there is high volatility in market share for Indonesia and the root cause of that is the heavy marketing campaigns run frequently. A great deal of effort is spent on the consumer front to mold stickiness and loyalty of the user.
The rivalry between SE Asia's online retailers has intensified again. According to iPrice, Tokopedia outpaced Shopee in 1Q to be the No.1 e-tail platform in Indonesia, where 40% of ASEAN's digital consumers are located. Tokopedia's monthly web visits jumped to 135.1mn, 6% higher than Shopee's.
Exhibit 26. GMV standings of E-tailers
Source: Various media, disclosures & daily press
E-commerce competition on SE Asia scale. ➢ SEA controls the no. 1 e-tailing commerce player and is armed with a cash-
rich balance sheet. It recently launched its own food-delivery service ShopeeFood with a digital wallet Shopee Pay which is already dominating the peers. This may well challenge Grab and Gojek's food delivery market dominance, particularly in Indonesia, where over 40% of the region's digital consumers reside, according to Google, Temasek and Bain & Co.
➢ U.S. and China have 21% in food delivery penetration, vs. 11% in SE Asia. The sector provides SEA a large opportunity to expand its user base and lastmile logistics network through its ShopeeFood, which in turn could have synergistic effects in adjacent offerings such as e-commerce and financial services. SEA also owns Now, a leading food delivery app in Vietnam.
➢ SEA can keep leveraging its highly lucrative gaming business and prominent e-commerce brand to penetrate the food delivery market.
➢ Gojek exited Thailand’s ride-hailing operations in return for 4.76% of Air Asia shares, as part of a realignment of its SE Asia strategy. Gojek instead increased investment in its Vietnam and Singapore operations, having identified these markets as strong sources of growth for the business going forward. This includes increased driver and merchant acquisition initiatives, enhancements to user experience as well as launching new products and services.
2018 2019 2020
E-commerce GMV
Indonesia E-commerce GMV (Google
Temasek Bain)$12.2bn $21bn $32bn
Indonesia E-commerce GMV by Frost
& Sullivan $11.6 bn $17.9 bn $30.6 bn
Bukalapak $1.81bn $3.73bn $4.93 bn
Shopee $8.2bn $5.6bn $14.2 bn
Tokopedia $5.1 bn $1.3 bn (May) /
$15.6 bn (Q4) $14 bn
Lazada N/A N/A $4.5 bn
MAU
Bukalapak 50mn 70mn 90mn
Shopee 34.5mn 72.9mn 129mn
Tokopedia 80mn 67.9mn 100mn
Lazada 58.2mn 28.3mn 36.2mn
MERCHANTS
Bukalapak - online 4mn 5mn 6mn
Bukalapak - offline 2.5mn 7mn
Shopee 1.6 mn (Q1) 3 mn 3.7+ mn
Tokopedia 5 mn 7 mn (Nov 2019) 9.9 mn
Lazada N/A N/A N/A
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➢ Tokopedia's merger with Gojek in 2021 to create GoTo, may see Tokopedia expand outside Indonesia for the first time, into Vietnam where Gojek has already rolled out its ride-hailing service. However, Shopee still has the upper hand, given its 64% market share by user traffic, and a highly profitable gaming business Garena that can subsidize Shopee market share expansion.
➢ Shopee continues to be SE Asia’s largest e-tailer with 228mn monthly web visits, more than double Lazada’s 110mn. Tokopedia, Alibaba's Lazada and Amazon may eye Vietnam for its growth potential too, while Shopee is gunning expansion in Latin America to capture opportunities.
Exhibit 27. Actual and forecast SE Asia total GMV by country
Source: Google, Temasek, Bain & Co.
E-payment services is a financial drag but a vital element for fintech and ecosystem adoption.
The Ecommerce, ride-hailing and food delivery biz were the driving forces for e-payments. Thus, epayment services integrated into those forces have the advantage in driving usage and GTV in comparison to diversified players OVO and Dana.
Moreover, we believe epayments are also key to driving financial inclusion in Indonesia, by onboarding users to more sophisticated fintech services.
Even if the Covid19 new daily cases recede, the authorities will promote contactless transactions to avoid spikes in Covid19 new cases, and therefore the use of e-money & digital wallets.
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DANA 30 million MAU Rank - 3, 35Mn 1.5k merchants, 87.5k MSMEs
OVO 110 Mn MAU rank - 2 180k MSMEs
Link Aja 40 million MAU Rank - 4 250k merchants, 380 e-commerce, 2.5k filling stations (SPBU)
Shopee Pay
Jenius 1.6 million
Gopay 115 Mn MAU Rank - 1
GTV: USD 6.3 Bn/IDR 89.5 T
320k MSMEs
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DANA 50 million 180k merchants, 120 MSMEs
OVO 950k MSMEs, 1.5million merchants
Link Aja 61 million 315k merchants, 5k e-commerce, 5.5k filling stations (SPBU)
Shopee Pay 10 Mn
Jenius 2.5 million 29 Jenius Pay merchants
Gopay 420k merchants in 370 cities
20
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DANA 70 million (Sem I 2021) 13.5 Mn 3k online merchants
OVO 115 Mn 20.8 Mn 1.5 Mn+ merchants
Link Aja 66 million 7.2 Mn 350k merchants, 680 traditional markets, 6k online marketplace, 1.6k mosque.
Shopee Pay 10 Mn
Jenius 3.1 million
Gopay 900 business partners
Source: BRI Danareksa Sekuritas
Exhibit 28a. Digital Payment Gross Transaction Value (GTV USDbn) in SE Asia
Exhibit 28b. Method of payments
Source: Google, Temasek, Bain & Co Source: Google, Temasek, Bain & Co (A2A are transfers)
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Exhibit 29. Embedded vs. Independent E-wallet have different focuses
Source: Momentum Works
Pricing, promos, discounts and outlook. The pricing of goods and services is an important aspect, and key determinant for adoption. Start-ups will have to compensate the subsidies for purchasing goods and services with benefits that technology brings and its adoption thereof. Moreover, since we are still in the phase of adoption, stickiness and loyalty is paramount to have clients revisiting the platform and repeat/expand purchases, effectively bringing down cash costs. We have reached 21% ecommerce penetration in retail, and beyond the aforementioned balancing act, internet players would need to defend their market positions and we may see some more discounts, free shipping offers etc. Nonetheless, facilities like 0% instalment payments, cashbacks for future purchases, point rewards to encourage loyalty may be subsidizing payments but have a positive effect for future turnover. Lastly, there is widespread offerings Buy Now Pay Later, which emulates the functionalities of credit cards for users who have limited credit records, that should positively affect business turnover.
Exhibit 30. Payment promotions by Grab
Source: Grab
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New Horizon: Expansion enabled by big data processes in the cloud. Unconnected pools of big data waiting to be connected and provide insights for consumer behaviour. From now and into the future, several businesses will pass the low hanging fruits of data connectivity and digital platform and accelerate the very process of needs discovery through personalization. .
Internet players have many opportunities in terms of:
a) additional coverage
Internet economic growth is very versatile. When other sectors slow down, others step up and make an impact.
Exhibit 31. Indonesia sectoral GMV projection Exhibit 32. GMV sectoral comparison in SE Asia
Source: Google, Temasek, Bain & Co 2020 Source: Google, Temasek, Bain & Co 2020
Exhibit 33. Number of districts with Tokopedia & Gojek presence Exhibit 34. Metropolitan vs. non Metro ecommerce coverage
Source: LPEM, University of Indonesia Study Source: LPEM, University of Indonesia Study
Exhibit 35. Presence of Tokopedia across Indonesian districts, 2019 Exhibit 36. Presence of Gojek across Indonesian districts, 2019
Source: LPEM, University of Indonesia Study Source: LPEM, University of Indonesia Study
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Exhibit 37. E-tailing spend was projected beyond tier-1 cities
Source: Mckinsey
Exhibit 38. Indonesian E-commerce GMV projection
Source: Frost and Sullivan, Bukalapak
b) Additional online penetration Covid19 has altered the outlook and consumer behaviour to adjust to new lifestyles in line with mobility restrictions, WFH, SFH. But the core attributes of the demographics remain.
- Indonesian consumers have been the main growth engine for economic growth, with an aspiring middle class for improved lifestyles throughout Indonesian islands. We expect Indonesian consumers to dictate those aspirations through higher purchases online.
- Secondly, we understand the aspiring class has high smartphone adoption at circa 65% smartphone penetration.
- Thirdly, the rate of Indonesian urbanization increases with the population relocating to city centres with higher economic activity.
- Equally important, we expect that precautions for Covid19 will not dissipate. Rather, lifestyles will adapt to include more contactless activities with 3D/hologram communication enabled by 5G, online transactions and e-money/digital currency transactions.
Upside seen at higher digital penetrations The graphs below depict that older cohorts will tend to generate more volume as digital penetration increases. This is because either the ecommerce has become mainstream, or other alternatives to purchase goods are no longer meaningful. We understand that ridehailing companies and e-payment services subsidize fares and offer a great deal of promotions, which along the way, can be removed at a steady state, or when the service becomes mainstream.
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Exhibit 39a. Grab monthly transacting users split by number of offerings (%). Users are using more offerings
Exhibit 39b. Shopify Canada: Order growth from previous loyal users
Source: Grab 2021 Source: Shopify 2021
c) data cloud enabler Tech companies can help fuel their longer-term growth with Cloud computing supporting services. Users include tech start-ups, financial institutions, telecommunications, enterprises and SOEs who already store and process data in public/hybrid cloud. We expect big data and machine learning across digital internal platforms of entities. They will use AI to identify abnormal behaviour in their value chain, and machine learning for customer profiling to serve consumers more efficiently and create more opportunities to upsell/cross-sell. Early adopters of e-Commerce have matured over the years and tend to demand more differentiated product/service offerings.
Exhibit 40. Cloud spending forecast by functional market
Source: IDC, Bloomberg Intelligence
Internet companies approach from 2 ends, supply & demand: focus on the consumer (Amazon, Alibaba), and focus on the merchant (Shopify way) depending on penetration levels. In an environment where there is stronger online penetration and purchasing power, we expect internet companies to empower consumer experience. In an environment where infrastructure, logistics is still relatively limited and under long development, the focus may shift on empowering the supply side and the merchants.
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Exhibit 41. Consumer profiling: digital heatmap
Source: BRI Danareksa Sekuritas
Diversified Product Supplies to meet Indonesia’s consumers’ demand.
➢ Acceleration of Product and service Development and go-to-market. Feet-on-the-Street Customer Input, a thing of the past. Feet-on-the-street, sales force, and call centers may gradually become redundant. R&D processes may become more efficient too. Companies would build products/services based on the feedback they get on the one size-fits-all scenario and try to generate sales. This process is accelerated with private/hybrid/public cloud for data capture and processing. Internet companies will study the behaviour based on the data and tailor products, pricing, credit lines & account management to meet the individual needs & wants of each customer.
➢ Amazon and Alibaba are mastering this process saving customers money
& precious time. Moreover, through personalization, they have accelerated the very process of discovery for each individual, helping the consumer to reach a full level of utility/satisfaction in a very limited time.
Mothers / Children,Large population
factor to drive groceries, school
items, apparel
Households
Baby boomers, Lagging adopters
Women population, decision makers buying
& buying beauty products and apparel
Millenials, decision makers mid level human capital, low mid financial capital
CONSUMER TARGET GROUPS
Working class, Environment driven,
decision maker
Early Adopters, Tech lovers, data/
internet savy population. Average
human/financial capital
Convenience Seekers
Aspiring middle class, consumption enabler
Generation X, heavily influenced
by SoSMed
Generation Z, heavily influenced
by SoSMed
Men population, Less influential decision
making. Hobby, job related
consumption,can be data savvy
CONSUMER DIGITAL HEATMAP, greener the more intense
Intense
consumer
profiling on
the cloud
Cloud
Cloud
Cloud
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Artificial Intelligence, the beginning of a new consumer experience cycle. Data and personalization are the drivers to achieve the highest consumer satisfaction. Data will be the big data as only cloud machines have the processing power to manage the data collection, customer relationships, optimizing the data to make personalized offers. Artificial intelligence steps in to automate the process of personalization efficiently to provide even more tailored outcomes based on consumer preferences (AI re-runs the process millions of times to achieve the best outcome for the consumer).
Data analytics process….
…… several functions rerun millions of times with AI
Exhibit 42: Data analytics effectiveness in consumer experience and personalized offers
Source: Amazon
They Collect Data… Understand Customer Wants & Improve Business Processes Increase Customer Input / Improve Products Manage Direct Customer / Subscriber Relationships Improve Consumer Decision Making …Manage Connections… Organize Internal + External Communication Communicate with Customers via Multiple Channels Organize Customer Data Across IT Systems …Optimize Data Improve Analytics / Recommendations / Personalization Respond To Customer Events at Scale Discover Business Insights + Optimize Fulfilment Manage Data Growth & Eliminate Inefficiencies
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International experiences Alibaba creates an Omnichannel presence to enhance the consumer experience through Interactive entertainment, recommendation feeds, live streaming (Taobao) and variations of O2O experiences. Exhibit 43: Including O2O for Omnipresence by Alibaba
Source: Alibaba, Mckinsey
Alibaba has the most comprehensive ecosystem of commerce platforms, logistics & payments to support the digital transformation of the retail sector. The O2O variation in China is described as 'New Retail', a term introduced by Jack Ma. Hema is a subsidiary of Alibaba, founded in 2015 growing rapidly, merging online and offline grocery shopping experiences that integrates supply chain considerations. Overall, Hema represents a fusion of the centralised distribution model and store fulfilment model in the typical online grocery distribution. Each Hema store doubles as a distribution centre through an overhead conveyor system, which enables a 30-minute delivery time for customers within 3km of the nearest store. Hema's approach to transform online grocery demonstrates new possibilities in the future of grocery retail. Ant Financial / Alipay is not only China's #1 mobile payments platform, but it is also a provider of financial services such as loans, wealth management & insurance products to hundreds of millions of consumers & millions of small businesses on the Alibaba platform. Ant Financial’s Yu’e Bao money market fund is the largest money market fund in the world, with more than 300 million investors and $30 billion in assets. Tsai noted their robust technology platform as the key to the instantaneous settlement of several million transactions a day, which brings down the cost structure. He also highlighted their use of artificial intelligence (AI) to predict daily liquidity demand. The Amazon flywheel business model. The flying wheel of Amazon is based on the underlying basis that the larger selection of goods and services, helps lower costs and helps lower prices which is essential to the Customer Experience. Subsequently, increased customer satisfaction leads to increased traffic and turnover which then feeds back to the initial process of production of goods and services. The Tencent flying wheel. The value generation in Tencent’s flying wheel is again founded on the consumer experience fulfilled with social media, games, OTT, and search engines that creates an ecosystem where services such as banking can be cross-sold to users.
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Exhibit 44. Amazon flywheel – autonomous growth Exhibit 45. Tencent self-sufficient business process
Source: 4weeks MBA, Amazon Source: Tencent
Data enablers for merchants. Given that Alibaba and Amazon have come a long way to providing business extensions to empower further their business partners.
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Exhibit 48. Digital enablers - Technology heatmap
Source: BRI Danareksa Sekuritas The bulk of Shopify's sales momentum has come from smaller merchants embracing its software and expanding over time. However, as consumers' buying habits continue to shift toward ecommerce, many large retailers have transitioned to cloud-based software providers such as Shopify to meet growing demand for online retail and to upgrade legacy commerce systems. This enables them to quickly optimize local delivery, add features such as curbside pickup, or utilize integrated marketing channels accessible to a broader audience. Recent enhancements to Shopify's checkout, such as international pricing and faster speeds capable of handling higher volumes on the platform, could also aid in adoption among larger merchants, given their global customer base. Shopify growth is driven by enabling new entrants to launch digital stores within hours.
DIGITAL ENABLERS for MERCHANTS To reach consumer and digitize
Improved Infrastructure: Business efficiency & automation
Road network
Smart cities
Port logistics
IT Management Systems
CRM
ERP
Music/Podcast platform
TECHNOLOGY HEATMAP, Dark green → Heavy digital influence
Lighter green → early digital penetration
Linear TV
Merchants alternative Online channel
(warungs, convenience stores, UMKMs)
Online channel for large brick-mortars
E-sports
Metaverse environments
Enabling larger data consuption
5G use case of hologram communication more meaningful in Covid19
Insurance
Inventory mgmt
Strong cloud connection for
storage/processing In the cloud
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The new horizon includes higher penetration in adjacent services Fintech, more groceries, Healthcare, and education. Fintech sector: Branchless banking & lower costs We believe there is a massive opportunity to drive customers up the affordability ladder and provide working capital support to SMEs with the democratisation of financial services. Asymmetric information between intermediary lenders and borrowers can be significantly improved with dynamic data collection and monitoring, and thus reduce risk for moral hazard. The first steps have been taken, with the introduction of digital wallets to perform routine transactions. The Buy Now Pay Later BNPL facility is already widespread on offer by fintechs increasing room for financial support. Nonetheless, fintech startups can leverage way more on the human capital and prospects of each of the users and monetize their future performance when users start opening bank accounts and obtaining loans. Bank Jago, affiliated with GoTo, already offers users the ability to debit directly their bank accounts bypassing the digital wallet. This way, GoPay avoids commission fees for digital wallets top-up from 3rd party bank accounts. There is a significant number of people who are still unbanked and a large number of UMKMs that are underbanked too.
Exhibit 49. BNPL benefits vs. credit cards
Source: Momentum Works Herewith we relay the thoughts of our banking analyst, Eka Savitri. The COVID pandemic has led to more structural changes in the banking industry due to mobility restrictions. Currently, several small banks have claimed to have become digital banks given the plentiful growth opportunities. This is reasonable given that the small banks have fewer physical outlets and relatively small balance sheets that allow them to shift their existing business to the new digital bank model. Nonetheless, we also need to acknowledge that only three digital banks worldwide are already posting positive bottom lines, namely WeBank and MyBank from China and KakaoBank from South Korea. As such, we expect the digital banks in Indonesia to follow a similar trajectory and book net profits by 2023 at the soonest. While do not forget that the conventional big banks are digitalizing their products and services as well as the back-end business processes mainly to improve productivity and efficiency aside from generating higher fee-income. It is worth noting that these banks also have a higher number of customers. Hence, the challenges are more towards how to shift the customers’ behaviour to utilize the digital platforms (mobile and internet banking) from the traditional method, i.e. branch and ATMs. And most of them also plan to launch the super apps platform in the near term, leading to more options and flexibilities to the customers, particularly the tech-savvy ones.
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The regulator, in this case the Financial Services Authority (OJK), fully supports the digital bank initiatives as this would help its goal to increase financial inclusion in Indonesia. Given the geographic aspects, we assume that the banks with a strong presence in rural areas are still in a better position to expand their business. We view that the digital banks will focus more on the informal sectors in big cities and the surrounding areas as their main target as most of them already own smartphones and know how to use them. We believe for digital banks to succeed they will need to have the right digital ecosystem and a definitive database. With the massive and aggressive e-commerce platforms, many digital banks are looking to tap into these ecosystems. This is reasonable in our view as the platforms have sizable databases, both for customers and merchants, that can easily be used as the first screening process for potential borrowers. Nonetheless, the bank would also need to select which data can be used for credit scoring. This requires decent data analytics with the right personnel in place along with a knowledgeable management team as the approval time is a crucial factor in the mass-market segment. The c.62.0mn micro and small business owners in Indonesia is the low hanging fruit target market for the digital banks. Most of the digital banks have emphasised the need to utilize the supply chain approach to provide loans to their merchant borrowers (PO-based). By doing so, there is minimal risk of higher NPLs in the future. While for the consumer loans, the lending product would usually be short-term and of a small ticket size. Given the short-term tenors in both segments, the number of potential borrowers is another vital factor to ensure sustainable business growth for digital banks. On the funding side, meanwhile, most of the digital banks would depend on the stickiness of merchants and customers in the respective ecosystem as most of them already maintain a certain amount in their e-wallets such as GoPay, ShopeePay, Ovo Cash, etc. Despite the current strong capital position, most of the digital banks are willing to offer savings rates similar to TD rates at the conventional banks (ranging 3-5% rate), purely to grow their deposits base. Going forward, once the lending grows, the banks will need to gradually rearrange the funding structure more towards customer deposits instruments. Additionally, the banks would likely cut the superior savings rate to similar levels as other banks’ saving rate (below 3% rate) when the banks view that the stickiness of the CASA deposits’ customers are already in place. All in all, digital banks with unique value propositions supported by a proper digital ecosystem and experienced management team should be the main winners in this era. The potential downside risks are the execution, less-than-expected acquired customers both in lending and funding and technical glitches.
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Exhibit 50. Fintech Market
Comp General Info + Matrix Affiliations Features Shareholders Valuation
DANA No. of users: 70 million (2021) Transaction Frequency Avg: 6 per month (2020) Founded: Dec 2018 HQ: Jakarta, Indonesia. Average Daily Downloads 2020: 11
Online affiliations: BPJS Kesehatan, Bukalapak, Tix ID, Mobile Legends, Lazada, UniPin, UC Browser, Parkee, U Point, Google Play, Bluebird, Coda Shop, ItemKu, Vidio, Tiketux, Laku Emas, Razer Gold, Meeber.
Wallet (Premium, Top Up, Store Debit Card, Withdrawal, Payments), Send and Request Funds via DANA/Bank.
PT Elang Sejahtera Mandiri (99%), Ant Financial Services Group.
Undisclosed
Offline affiliations: Ramayana, KFC, Hokben, Bakmi GM, Kopi Kenangan, Sour Sally, Gulu Gulu, Mister Baso, Rice-Bowl, Cuppa Coffee Inc, KyoChon, Ce Wei Lamian, Moka, Beau, Dairy Queen, Domino's Pizza, Rejuve, Quiznos, Bio Medika, Kedai Kopi Kulo, Mor, Walao-Eh, I-ta Suki, Kafe Betawi, Fore. Channel: Alfamidi, BCA, Alfamart, Maybank, BNI, Bank BTPN, Mandiri, ATM Bersama, Dan+Dan, Artajasa, Bank BRI, Bank Bukopin, Bank Sinarmas, Danamon, Blue Mart, HSBC, Standard Chartered, Permata Bank, Visa, CIMB Niaga, Alto, Mastercard.
OVO No. of users: 115 million (2021) Transaction Frequency Avg: 8.6 per month (2020) Founded: Sep 2017. HQ: Jakarta, Indonesia. Average Daily Downloads 2020: 18
4 Fingers Crispy Chicken, ACE Hardware, Agoda, Advance Life, Aryaduta, Auntie Anne's, Angkasa Pura, ArenaTiket, Bata, Batik Danar Hadi Solo, Bengawan Solo Coffee, Berita Satu, Betawi Kitchen, Bolt Ultra LTE, Books and Beyond, Boston Heal and Beauty, BPJS, Grab, Tokopedia, 3(Three), Hypermart, Food Mart, Lippo Cikarang, Prudential Life
OVO Invest, Bill payment (insurance, phone, internet, electricity) & phone credit top up, OVO Premier, Top Up OVO Cash via ATM, m-Banking, Internet Banking, Debit Card, and selected merchants, donations, 60k+ outlets. PRUTect Care - Hospital Cash: In collaboration with PT Prudential Life Assurance, provides a digital-based sharia insurance
Grab (44%), Tokopedia (41%), Tokyo Century Corporation (7%), Lippo Group (7%)
Last quoted valuation: USD 2.9 Bn (2020)
Link Aja
No. of users: 71 million (2021) Transaction Frequency Avg: 5 per month (2020) Founded: Jun 2019 HQ: Jakarta Indonesia
Pay merchants with QRIS and Token, Buy phone credit and internet data, Online shopping, Send money, Top up balance through BNI, BRI, BTN, Mandiri and other banks through the ATM Bersama service. - LinkAja collaborates with
Tokko to educated MSMEs in digitizing their business through the creation of an online store channel/free website feature provided by Tokko.
Telkomsel - Controlling Shareholder (~25%), Bank Mandiri (17%), BRI (14%), BNI (11%), Jasamarga (10%), Dana Tabungan dan Asuransi Pegawai Negri (10%), Pertamina Retail (8%), Kereta Commuter Indonesia (2%), Jiwasraya (1%), Danareksa (1%). GRAB, Gojek
USD 100 Million
Shopee Pay
Established: 2018 Transaction Frequency Avg: 14 per month (2021). HQ: Singapore. Operating Countries: Indonesia, Malaysia, Philippines, Singapore, Vietnam, Thailand.
Hypermart, SiCepat Express, Gramedia, JNE, J&T, Citilink, Alfamart, Alfamidi, Ace Hardware, Smartfren, Optik Seis, Circle K, Guardian, Family Mart + 3.7 million QRIS merchants.
Top up of up to IDR 2 million for unverified accounts and IDR 10 million for verified accounts, Online transactions in the Shopee app, Transactions at any Shopee Pay merchants, send funds to another Shopee Pay account, withdraw funds from Shopee Pay
Indigo Trading - Sitorus Family (51.1%), Sea Money Ltd (48.89%), Gang Ye (0.01%)
N/A
Jenius No. of users: 3.1 million (2021) Founded: Aug 2016 HQ: Jakarta, Indonesia Regions: Asia Pacific (APAC), Association of Southeast Asian Nations (ASEAN), Southeast Asia.
Bisnis and BisnisKit Account, Moneytory, Jenius QR, Flexi Saver, Top up BNI TapCash Balance, Jenius Pay in JD.ID,
Sumitomo Mitsui Banking Corporation (92.43%), PT Bank Central Asia Tbk (1.02%), PT Bank Negara Indonesia (Persero) Tbk (0.15%), Public (5.23%), Treasury Stock (1.17%)
N/A
Gopay n/a Bank Jago, Link Aja, MRT Jakarta, Kitabisa.com, Tokocrypto, 500k+ merchants
PayLater, Send Gopay Balance, Transfer to Bank Account, Complete Payment Services ( GoCar, GoRide, GoFood, GoMart, GoBox, GoSend), Bill Payments (GoPulsa, GoBills), payments at any Gojek partners
PT Aplikasi Karya Anak Bangsa - Gojek (71%), Others (29%)
N/A
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Comp General Info + Matrix Affiliations Features Shareholders Valuation
Akulaku
Users: 20 Mn+ cumulative registered users (Jul 2019), 5 Mn+ monthly active users. 40 Mn+ limit applicants. 150 Mn+ platform transactions. Established: 2014, Went online in 2016
Akulaku All-in-one app, Shopping installment BNPL, Cash loan, Akucicil, Digital Banking Solutions - Akulaku to take over Bank Neo Commerce and become the controlling shareholder in October 2021. Akulaku is currently the largest shareholder with a portion of 24.98% in BBYB.
Online marketplace, Funding (loans, government retail bonds, mutual funds) starting from IDR 1 Mn, easy process and secured by insurance.
Kejora Ventures, SBI Holdings
Last funding USD 24 Mn
Kredivo
Users: 4 Mn (2021). Founded: 2016. HQ: Jakarta, Indonesia. Operating Regions: Jabodetabek, Bandung, Surabaya,Semarang,Samarinda, Palembang, Medan, Yogya, Solo, Makassar, Malang, Sukabumi, Cirebon,Balikpapan, Batam, Purwakarta, Padang, Pekanbaru, Manado, Kediri
Tiket.com, Blibli, Bukalapak, Tokopedia, Lazada, JD.ID, Ikea, Erafone, iBox, Samsung, Xiaomi, Electronic City, Best, Alfamart, McDonalds, and 1000+ other merchants
Buy Now, Pay Later (BNPL) Platform, Digital Credit App (5 minutes to register, 2 clicks to shop or apply for a cash loan, 30 days to 12 months to repay. With instant approval confirmation) - Kredivo plans to conduct IPO in US next year. After merger the pro-forma equity valuation will reach US$ 2.5 bn
FinAccel, Victory Park Capital, Reiventure
Last funding USD 310 Mn Last valuation: USD 2.5 Bn (2021))
Blu by BCA Digital
Users: 25k customers (Jul 2021). Released: July 2, 2021 (for Android users on Google Play Store)
Blibli bluAccount, bluSaving, bluGether, bluDeposit, money transfer, withdraw cash without a card at ATM BCA, buy credit & pay post-paid bills, Internet/TV Cable payments, Top up OVO & GoPay, Payment using QRIS, balance history. - PT Bank Digital BCA to IPO in IDX in next 1-2 years. Blu's develops the digital BCA platform.
BCA Digital, BCA Group, Djarum Group
N/A
Koinworks
Users: 600k+ active users. Established: 2016 as Peer-to-Peer Lending Company (P2P). HQ: Jakarta, Indonesia
Pefindo, Gadjian, Global Elektrindo, Zaapko, 100k digitalMSMEs.
Funding & Investment (KoinP2P, KoinRobo, KoinGold, KoinBond), Loan (KoinGaji) - Cooperates with PT Cashlez Worldwide Indonesia Tbk.. becoming super financial app licensed and registered with OJK. Cashlez members can apply for financing of up to Rp.2bn, tenor of up to 24 months at competitive rate.
Benedicto Haryono, Mandiri Capital, EV Growth, Quona Capital, Saison Capital
USD 72.1 Mn
Bank Jago ARTO
No. users: 500k Founded: 1992. 2020 becomes PT Bank Jago Tbk. 2021: GIC Private Limited commits to injecting funds IDR 8 trillion. HQ: Jakarta. Regions: APAC, ASEAN, SE Asia.
GoTo (Indonesia), Bibit
Start Living Now: Pay and Send, Contact, Personalization, Shortcuts, VISA Debit Card. Guarantee Your Tomorrow: Pocket, Plan Ahead, Locked Pocket. More Convenient Together: Shared Pocket, Giveaway Pocket, Request Money. Safe in Your Hand: Security and Control - Bank Jago plans to integrate transaction data with GoTo to run in Q3 2021. Aims to record profit in 2021.
PT Metamorfosis Ekosistem Indonesia (29.81%), PT Dompet Karya Anak Bangsa - Gojek (21.40%), Wealth Track Technology Limited (11.69%), GIC (9.12%), Public (27.99%)
Market Cap: IDR 210 trillion
Bank Harda (Allo Bank)
Founded: 1993 as Bank Harda. HQ: Jakarta, Indonesia. Acquired by Mega Corp in 2021, change of name to Allo Bank.
Launched: June 2021. Operating Countries: Indonesia, Thailand, Taiwan. Jakarta Branch Head: Mangkuluhur City Tower One
Hana Bank, Line Corporation, Line Financial Asia, Tokopedia, Shopee, Blibli, JD.ID, DANA, Indomaret, Alfamart
Savings, Deposit, Payments (electricity bills, top up mobile phone credits), Debit Card (to be used at any Line Bank partners) Comments: After Indonesia, Thailand, and Taiwan, LINE Bank's next step is to enter Japan, as one of the largest LINE user base countries.
KEB Hana Bank (69.01%), LINE Financial Asia (20%), International Finance Corporation (9.98%), Bambang Setijo (0.85%), Biantoro Setijo (0.16%)
Source: BRI Danareksa Sekuritas
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More ecommerce penetration with retail and groceries. Consumer utility can be further improved continuing from platforms that can be extended to include grocery needs for households. There are distinct market segments in F&B that are attractive. Addressable markets are distinct based on time availability, convenience, home vs. 3rd party cooking. Cloud data analytics can identify the target profiles for each of the segment, and the digital player will prepare the appropriate offerings.
Exhibit 51. Hybrid (F&B + Delivery) value creation Exhibit 52. Large F&B opportunities between home cooking and RTE
Comp General Info Affiliations Features Shareholders Valuation
GoFood
Available in 74 cities in Indonesia Merchants: 750k (2021, katadata) Menu: 20mn items launched: 2015 GMV: USD2.5bn/2n in 2018/2020
750k merchants (2021)
Delivery, Pickups, Gofood Plus (membership) Part of Gojek N/A
GrabFood
70 Grabkitchens (excl. Vietnam, Cambodia) Grabkitchens in 28 cities in Indonesia Launched: 2018 GMV: USD 5.5 Bn 2020, 203%
CAGR GMV 2018-20.
Paypal, OVO Food delivery service, self-pick-up - Leading food-delivery service in Southeast Asia, leading food-delivery platform in Indonesia in 2020. (dailysocial) Grow 39% CAGR to GMV USD14.7bn in 2023
Part of Grab N/A
ShopeeFood
Launched: 2020 merchants: 500 Operations: JABODETABEK, Bandung, Surabaya, Yogyakarta 500+ merchants 50,000+ ShopeeFood driver app downloads (Google Play only)
Shopee, SEA Group, Garena, SEA Money
Food delivery on Shopee app/website. - Shopeefood started in early 2021. SEA group acquired Foody Corporation in 2017, a food delivery platform in Thailand, performing well 42% share of the total food delivery GMV in Thailand (Asiatechdaily).
Part of Shopee N/A
Digiresto
2,300+ merchants (dailysocial) Launch in 2020
Known merchants: holycow, ninety-nine, Hokben, Denny's, Old Chang Kee Whatsapp, GoSend, MCAS, SiCepat MOKA
Whatsapp (chat) based food delivery platform. Integrated with GoSend platform for delivery purposes. Food delivery, pick-up, dine-in orders Comments: Expand its distribution network and create an integrated supply chain system with SiCepat Express and MCAS
SiCepat Express (51%) PT M Cash Integrasi Tbk (MCAS) (49%)
N/A
Traveloka Eats
available in 19 cities in inodnesia.
Partners with Yoshinoya, Fish n Co, Sour Sally, Steak 21, Krispy Kreame, Shihlin, Excelso, Breadlife, and Mcdonalds
A digital F&B directory page that identifies and reviews multiple F&B spots in different locations. Provides vouchers to certain merchants.
Part of Traveloka N/A
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Warung Pintar
- 500k+ warungs - 500+ brand and suppliers - 600+ Smart Groceries - avalable in 200+ cities and kabupaten - 52 warehouses and 5 Depos
Acquired Bizzy and Limakilo
Integrated digital solutions for MSME's (warung and grosir/wholesaler), brand suppliers, and suppliers. 1. Warung Pintar: Connects warungs with partnered wholesaler, suppliers, and distributors. Also includes discounts, inventory, and billing management. 2. Gorsir Pintar: Connects wholesalers with buyers. Integrated with logistic and sales support, and cashbacks. 3. Distributor FMCG: Provides digitally integrated logistics, inventory, saleman, payment, trucking, and analytics management. 4. Brand Supplier: connects brand suppliers with buyers. Includes market analysis reports, distribution management, and promotion management.
EV Growth, LINE Ventures, SMDV, Digital Garage, Pavilion Capital, OVO Fund, Triputra Group, Jerry Yang, East Ventures, Vertex Ventures
USD 41.5 Mn Last quoted valuation: EUR 154 Mn (2021)
Happyfresh
Operates in 11 major cities within Indonesia, Thailand, and Malaysia Founded in 2015 1 Mn+ app downloads (2020, dailysocial)
29 Partners: Grand Lucky, Papaya Fresh Gallery, The Foodhall, Giant Express, Frestive, Vines, Re.Juve, Natural Farm, and Red & White, Jakaichi mart, Sake+, Tiara Gatzu, Hokky, Market City. etc. Bukalapak, OVO Partner with Grab to introduce GrabFresh.
Provides orders to partnered merchants, as well as its own shopes, namely Happyfresh Hub and FreshBox Comments: Selective expansion. look at long term profitability strategy for expansion by carefully curating merchant partners. Recently expanded to Bali in 2020.
Samena Capital, SMDV. Singha Ventures, Mirae Asset-Naver Asia Growth Fund, Vertex Ventures, Vertex Ventures Southeast Asia & India, LINE Ventures, Grab Ventures, Naver, Endeavor Catalyst
USD 30 Mn Last quoted valuation: USD 100 Mn (2020)
Tanihub
46k+ farmers available in 12 cities 2k+ products 350k+ orders executed Launched in 2016 Tanifund data: IDR 309.86 Bn disbursements, IDR 191.96 Bn paid out loans, IDR 177.9 Bn outstanding loans GMV: IDR 1 Tr (2020, marketeers)
N/A Tanihub - E-commerce platform TaniFund - P2P platform to finance farmer's working capital TaniSupplu - Integrated supply chain system from upstream to downstream Tanuhub Patriot - partner with over 1,500+ agents to sell Tanihub produce. Recorded increase of 250,000 new users from March 2020 to December 2020.
Cities available: JABODATABEK, Bandung, Solo, Yogyakarta, Semarang, Surabaya, Malang, Bali, Makassar, Medan, and Palembang Max. spending per order is IDR 2 Mn Launch: 2015
Partners: Hypermart, Foodmart, Pasar Mitra Tani, The Foodhall, Pasarjaya (jakmart), Hero, Circle K. Prima Freshmart, Watsons, Kios Unggas, MOR, Bulog, Alfamart, Vines, Idolmart, Alfamidi, Kibif, Best Meat, Lotte Mart, Bottle Avenue, Guardian, Vinyard, M Bloc Market, Sayurbox, etc.
Categories: household needs, home & lifestyle, Beauty, Health, Mom and babies (or kids), toys and hobbies, automotive and electrical tools, and contraceptives Comments: Operations were stopped in 2018 to improve its technology before recent relaunched in 2019.
N/A N/A
Sayurbox
Founded: 2016, Indonesia Products available: 1,000+
Astra E-commerce platform, that allows users to buy fresh produce from farmers (Farm-to-table). - 1k+ farmers. Expansion outside Java; expand network JABODATABEK, Surabaya, and Bali (2020, Bigalpha)
MPPA 222 stores (incl. 100 hypermet stores) - 76 virtual stores in Gojek GoMart platform. In this feature, the company provides usres access to 6,200 different products that can be purchased and delivered through the platform. Founded in 1986
Gojek Brands: Hypermart, Primo, Foodmart, Hyfresh, Boston Health & Beauty, FMX, and SmartClub To open 5-6 new shops with estimated CAPEX IDR 5 Bn per shop. (Kumparan) MPPA recently opened virtual stores in Gojek platform. It is the company's effort in establishing an O2O system to counter the effects of the Covid-19 pandemic. (Bisnis Indonesia)
Amderspm Investment Pte. Ltd (18.6%) Connery Asia Ltd (14.3%) MLPL (50.2%) Public (16.9%)
N/A
Source: BRI Danareksa Sekuritas
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Herewith we relay the thoughts of our consumer analyst Natalia Sutanto. In our view, the growth in e-commerce, retail/e-tail groceries will benefit overall FMCG companies. At present, the contribution from the online channel is still small (less than 5% of total sales, some reported only 1-3% of consumer companies within our coverage). However, we expect to see an increasing contribution from the online channel to FMCG sales ahead: (1) accelerated by the recent pandemic that pushed the adoption for online shopping which will (2) potentially change the lifestyles for the middle to middle up segment combined with (3) 63.5mn Indonesian people becoming tech-savvy in shopping behaviour. It is also worth noting that the increasing online sales combined with big data analysis support the marketing and promotion of each specific product. Thus, greater efficiencies might be created for the promotion and logistics costs in the medium and long-term. We have surveyed several major e-commerce players and found that most FMCG companies under our coverage already have a strong presence in these online channels through their official stores. An increasing presence of official stores from FMCG companies is positive for online/e-commerce. These companies provide higher commissions, advertising revenues and also have budgets for sharing promotional and logistic costs. In our view, the e-commerce industry will continue to evolve to create the ecosystem that will attempt to provide services for each customer within the group. If this succeeds, these new ecosystems will benefit the customers in providing greater convenience, tap the new/existing demand and grow its contribution to the overall economy. Meanwhile, the evolving business model will continue to help generate sustainable earnings going forward. Exhibit 54: Existing supply chain in FMCG industry Vs greater efficiency through e-commerce distribution system
Source: Bukalapak
Healthcare and telemedicine; digital adoption accelerated in Covid19, long runway in traditionally underserved/underachieving market The healthcare sector has been a challenge for the government and there is immense room for upside in healthcare delivery. So now, there is a shift from in person consultation to telehealth calls/consultations shifting from physical in-person classes to on-demand and digital (video) classes. Herewith we relay the thoughts of our healthcare analyst Naufal Yunas. Healthcare providers in Indonesia have been positively impacted by the covid-19 pandemic due to skyrocketing BOR and higher revenues per patient as the cost of covid-19 is mostly borne by the govt. The market condition for hospitals is undersupplied compared to other developing countries. Most hospitals are owned by private entities (~64%), and the rest by govt-related entities. Application of technology in the hospitals is currently diverse in each hospital. Traditionally, people need to wait for the doctors and fill in some medical record documents, which requires hours to process until they meet the doctors. This burdensome process triggered the development of telehealth in Indonesia,
38
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especially to tackle administrative issues. Some big private hospitals such as Mitra Keluarga, Siloam, and Hermina launched telehealth apps so that the potential patients can have teleconsultations and arrange appointments with doctors. The development of telehealth also emerged in the form of a healthcare marketplace where some telehealth apps were launched in order that people can have teleconsultations with appropriate doctors, and they also may get the required medicines. This trend triggered many licensed doctors to join the telehealth platforms as it is easier for them to find potential patients. Many doctors in hospitals also provide teleconsultations outside their working hours. Digital disruption and big players: Digital disruption from telehealth provides a positive impact for existing hospitals. Telehealth apps enable patients to have a more time-efficient consultation with doctors; hence this will improve the patient volume. Apps integrated with hospitals such as AlteaCare, MySiloam, and Hermina Mobile will automatically save medical records from patients so that they will not be required to fill in the medical record documents when they want to re-consult with the doctors. Telehealth apps also enables hospitals to look for potential markets outside their coverage as the teleconsultation orders come nationwide. There are also currently some big players in telehealth marketplace apps in terms of monthly active users (MAU): Halodoc, Alodokter, and KlikDokter. Each of them provides relatively similar services, such as teleconsultations, pharmacy, and doctor appointments. They have partnered with many doctors and hospitals nationwide. The need of telehealth became more pronounced during the covid-19 pandemic. Therefore, hospitals see that telehealth is necessary to provide services especially for low complexity treatments. Telehealth app downloads and active users have skyrocketed in tandem with the rising pandemic toll in Indonesia. In March 2020, the number of downloads of Halodoc apps increased 300%, and the number of active users of Alodokter rose by 50%. Likewise, the number of MySiloam app downloads increased by more than 300% qoq in 2Q21.
Exhibit 55. Healthtech Market
Comp General Info + Matrix Affiliations Features Shareholders Valuation
Halodoc
Number of active users: 27mn MAU, 25x higher in the last 3 years Launched: 2016 Country: Indonesia Founder: Jonathan Sudharta Employees: 100-250 HQ: Jakarta, Indonesia GMV: $44.6 million (2019)
Partners with 22,000 licensed doctors, 4,000 drugstores, 2k hospitals/clinics/lab, incl. Prodia (fasilitas laboratorium), Mitra keluarga hospitals, St. Carolus hospitals, Mayapada hospitals, Primaya hospitals, Bina Husada Cibinong hospitals, Bank AMRT, Bank Aladin, Gojek, Konimex Group, Sampoerna Academy, Technoplast, Telkomsel, POGI, Citinine Property, Blibli, AXA, Prudential, IDI, BNPB, Adira Insurance. Also partners with covid-19 tests and vaccination centers
Consult with a doctor online 24/7, buy medicine 24/7, make hospital appointments, medication reminders, BMI calculator, COVID-19 test, special services, pregnancy and menstruation calendar, health articles, information on drugs and vitamins First to roll out their drive-thru COVID-19 testing nationwide. In 2020, Halodoc launched an appointment service connecting 2,000+ providers (hospitals, clinics, labs, etc.) to patients in 180+ cities
Temasek, Telkomsel Mitra Inovasi, Novo Holdings, Acrew Diversify Capital Fund, Bangkok Bank, UOB, Openspace Ventures, Blibli.com, Allianz X, Astra, Bill & Melinda Gates Foundation, Clermont, Gojek, Djarum, Mensa Group
Last valuation: $350 mn, 2019
Alodokter
Number of users: 30mn active users Launched: 2014 Country: Indonesia Employees: 50-200 Founders: Nathanael Faibis, Suci Arumsari HQ: Jakarta, Indonesia
Partners with more than 43k doctors and 1,500 hospitals and clinics, Sequis (insurance), Apotek Century & Apotek Generik (pembelian obat), Eka Hospital, ShopeePay, OYO, Fore Coffee, Homecare24, Medithru, Pregnancy+, IDI, Mandiri AXA General Insurance
Teleconsultation, Pharmacy, Doctors appointment Health information and question-and-answer forums, doctor search channels, chat with doctors, health insurance, medicine purchasing services. Comments: Halodoc was established in 2016 by Jonathan Sudharta. It was also the first to roll out their drive-thru COVID-19 testing nationwide. In 2020, Halodoc launched an appointment service that connects over 2,000 providers (hospitals, clinics, labs, etc.) to patients in over 180 cities across Indonesia
Samsung Venture Investment, MDI Ventures, Sequis, Hera Capital, Daily Partners, Heritas Capital Management, Philips Ventures, SoftBank Ventures Asia, Feng He, Lim Der Shing Fenox Venture Capital, Golden Gate Ventures, Pegasus Tech Ventures, 500 Startups, Lim Der Shing
N/A
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KlikDokter
Number of users: 12mn active users per month (Jan 2021) Launched: 2008 Founder: Andreas Santoso Parent company: Kalbe Farma Country: Indonesia Employees: 100+ HQ: Jakarta, Indonesia
Rapid test: RS EMC Tangerang, EMC Sentul, RS Azra Bogor, RS Husada Utama Surabaya, RS Mitra Keluarga Kelapa Gading, Apotek Kimia Farma (obat gratis), Griya Anabatic, Lifebuoy, Kalbe, IDI, DANA, Prenagen, One Onco
Teleconsultation, Pharmacy, Doctors appointment Consultation with specialist doctors, 24-hour live chat with doctors, redeem online prescriptions, fertility calendar, pregnancy calendar, health articles, search for the nearest hospital, complete list and explanation of drugs and diseases Comments: KlikDokter was initially established as the communication platform and healthcare education for public and medical officers. In 2016, it was acquired by PT Medika Teknologi
Kalbe Farma (64.3%), via PT Medika Komunika Teknologi
Last valuation: '+/- IDR22bn of asset
SehatQ
No. users: 27.5mn Launch 09/25/2019 Founder: Linda Wijaya Country: Indonesia HQ: Jakarta Employees: 100+ Revenue: $21 mn
230 rumah sakit (including Eka Hospital) dan klinik, 2000 dokter, laboratorium klinik, Angkasa Pura II, Pemprov Banten, Sinar Mas
Consultation with doctors from various specialties via chat or video calls, health articles, complete information on various diseases and drugs, find the nearest hospital, information on health events, stores for household products
Sinar Mas N/A
Mitra Keluarga MIKA
• Operational beds: 3,224 • No. of hospitals: 26 • Coverage: Greater Jakarta, West Java (Sukabumi and Cirebon), Central Java (Tegal), West Java (Surabaya)
Kalbe Farma, Envesal Putra Megatrading, Alodokter, Halodoc
General and specialty hospitals, laboratory Comments: Self-created telehealth apps: AlteaCare
PT Griyainsani Cakrasadaya (61.86%), Boenjamin Setiawan (PT Santa Seha Sanadi) 16.7%, Maria Karmila (PT Lucasta Murni Cemerlang) 16.7%, Khouw Lip Swan (PT Gira Sole Prima) 16.7%, Gerda Veronica (PT Diptanala Bahana) 16.67%, Theresia Harsini (PT Ladang Ira Panen) 16.7%, Fransiscus Bing Aryanto (PT Bina Arta Charisma) 16.7%, Public (38.1%)
Last valuation: IDR32.6tn
Siloam Hospital (SILO)
• Operational beds: 3,792 • No. of hospitals: 40 • Coverage: Sumatera (Medan, Jambi, Palembang, Lubuk Linggau), Greater Jakarta, West Java, East Java (Surabaya, Jember), Kalimantan, Sulawesi, Bali-Nusa Tenggara, Maluku
Lippo Karawaci, Aido Health, Alodokter, Halodoc Peers under CVC portfolio: GarudaFood, Link Net, MAP Aktif Adiperkasa, SOHO Global Health
General and specialty hospitals, laboratory Comments: Self-created telehealth apps: MySiloam
PT Megapratama Karya Persada - subs of Lippo Karawaci (46.9%), CVC Capital Partners (26.2%), Marubeni Group (5%), Subs of Lippo Karawaci Tbk (8.5%), GIC Singapore (0.47%) *As of 30 Jun 2021, in total Lippo Karawaci controls 55.4% stake
Last valuation: IDR13.1tn
Hermina Hospitals HEAL
• Operational beds: 5,400 • No. of hospitals: 43 • Coverage: Sumatera, Java, East Kalimantan, Sulawesi
Alodokter, Halodoc, and other telehealth apps
General and specialty hospitals, laboratory Comments: Self-created telehealth apps: Hermina Mobile Apps
Binsar Parasian Simorangkir (5.8%), Lydia Immanuel (5.7%), Non Widjaja Kusuma (7.3%), Raden Endjun (4.6%), Soepardiman (5.5%), Soedibjo Toeloes (5%), Sudarsono (5.7%), Yulisar Khiat (11.8%) Public (48.6%)
Last valuation: IDR17.2tn
Prodia Widyahusada PRDA
• Operational labs: 148 clinical labs and PHC, 101 POC Outlets, 10 Hospital labs, 4 specialty clinics • Coverage: Almost nationwide • Market share: 39.5% in 2020
Serves more than 11k companies each year. More than 600 types of tests. Prodia has successfully conducted more than 130,000 tests/month for more than 1,400 hospitals, specialist clinics, and other clinical laboratories throughout Indonesia.
Laboratories - Self-created apps: Prodia Mobile serving test appointment and teleconsultation. Prodia also actively provides health education webinars in YouTube.
Prodia Utama (57%), Bio Mayesty Pte.Ltd. (18%), Public (25%)
Last valuation: IDR7.1tn
Source: BRI Danareksa Sekuritas
Education sector; digital adoption accelerated with Covid19, long runway in underachieving market We relay the thoughts of analyst Naufal Yunas, with a deep knowledge of education issues
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The education sector is the most important driver of human capital, especially in Indonesia as the fourth most populous country in the world. According to the latest population census in 2020, c.40% of the population was born after 1997. This age group is critical for labor force supply in the future to support the economy. Having said that, enhancement in education is necessary to boost productivity and match skills with industrial needs, given the still-challenging education landscape in the country.
Exhibit 56. Population by generation, 2020 Exhibit 57. Schools profile Indonesia
Level
No. of schools YoY Growth, %
2019 2020 2019 2020
Primary school (SD)
148,673 149,435 0.28 0.51
Secondary - Junior high school (SMP)
39,637 40,559 1.74 2.33
Secondary - Senior high school (SMA)
13,692 13,939 1.46 1.8
Secondary - Vocational school (SMK)
14,064 14,301 2.58 1.69
Total 216,066 218,234 0.77 1.00
Source: Population Census, 2020 Source: Education Statistics, 2020
The quality of education in Indonesia is still challenging in some important aspects: infrastructure, teacher quality, and regulations. For infrastructure, around 50-60% of classrooms are light-to-moderately damaged, and this number increased in 2020 to mostly 70% in all levels. Only 15-40% of the classrooms are well-maintained. Internet access for all levels of education is also diverse, where university students mostly have good access to the internet. The lower the education level, the lower the internet access. The poorest have the least access. However, the penetration trend increased persistently in the last 5 years, with primary schools showing the fastest growth in the last 3 years. Teacher quality is also another problem in Indonesia. The ratio of pupils per teacher is 17, higher compared to other countries in the region such as Singapore (14) and Malaysia (11.6). This high ratio suggests teachers are undersupplied in Indonesia. In addition, teaching skills in most regions are also below the minimum score of 55 (Exhibit 63), measured by a pedagogic score test given by the govt.
Exhibit 58. Education infra condition (%) Exhibit 59. Internet penetration in various education levels
The education curriculum in Indonesia has also changed many times since the independence era. Frequent changes in the curriculum are essential to some extent in order to keep learning materials relevant, but this also puts pressure on teachers and students to adapt to new curriculum.
Exhibit 64. Curriculum dynamics since 1945’s independence
Source: Various
On the other hand, those challenges provide huge opportunities in the education business. Some education businesses starting their ventures since 1980s include: Primagama and Ganesha Operation. Those two education enterprises have
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Using cellular phone Using computer Using internet
www.danareksa.com See important disclosure at the back of this report
branches nationwide and partnered with many schools. There are also some other popular names such as Nurul Fikri, BTA Group, and Salemba Group. Most of the enterprises are owned privately. All of them focus on K-12 programs (from primary to senior high school students). They offer class tutoring programs to assist students from regular tests (quizzes, biannual and annual exams), national final exams, until preparations for State University Entrance Exam (SBMPTN, UTBK). There are upcoming players in the education business recently which are more focused on technological-aided education (Edtech). For K-12 group, Ruangguru and Zenius provide online and offline private tutoring. They provide more intensive e-learning products such as video tutoring and via learning apps. In addition, Ruangguru also provides tutoring for general groups such as university students, English tests, computing, and other informal subjects. Other players such as Quipper only provide e-learning for Senior High School students, while Cakap provides e-learning for foreign languages. For post K-12 players, there are Hactiv8 (coding and programming courses), Arkademi (vocational training and general courses), goKampus (platform for university access), and coursera (certified academic courses). Digital disruption and big players: Digital disruption in the education sector has challenged the traditional education business enterprises as the new players offer a more convenient way via e-learning. In order to adapt with the pandemic situation, many traditional enterprises have been forced to develop their own online tutoring platforms. Many of them also need to offer hard discounts to encourage new students to come in. Digital disruption unlocked the education business to be more fragmented and agile, so the competition in terms of price and quality is inevitable. For traditional enterprises, they have a competitive edge in terms of partnerships with many schools nationwide so that they have captured a sizeable market segment. However, for Edtech, their market segment is more diverse and wider as their coverage is not limited by the schools partnership. Moreover, by focusing on building a more advanced e-learning system, they can capture other bigger markets overseas.
Exhibit 65. K-12 Focused players Exhibit 66. Post K-12 players
Source: Redseer Source: Redseer
Impact of this disruption: We view that the penetration of Edtech will significantly change the existing landscape of education enterprises. The pandemic has unlocked the opportunity to spur Edtech in the way they are more adaptable to creative learning methods via video tutoring and more engaging live classes.
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Exhibit 67. EdTech Market
Comp General Info Affiliations Features Shareholders Valuati
on
Ruangguru
Users: 22 Mn. Founded: 2014. HQ: Jakarta, Indonesia.
32 Provincial Governments, 326 City and District Governments in Indonesia, Telkomsel, Loop, Pertamina, Tanoto Foundation
Edtech focusing on Primary to Senior High Schools students Offers: Ruang Belajar, Ruang Uji, Ruang Les, Ruang Les Online, Ruang Kerja, Ruang Kelas, Ruang Baca, Robo Guru, Brain Academy Online by Ruangguru, Skill Academy by Ruangguru, English Academy by Ruangguru.
PT Ruang Raya Indonesia, Ruangguru Pte Ltd, ASEAN China Investment Fund III, Isla Vista Group Ltd, Tanoto Foundation, Mexsteel Holding Limited, Belva Devara, Alvin Francis Tamie Loh, Adilla Inda Diningsih, Iman Usman., PT Multipolar Tbk (MLPL), General Atlantic
USD 205.1 Mn
Zenius Users: 20 Mn+ (website and app). Established: 2007. HQ: Jakarta, Indonesia
Gojek, Persatuan Guru Republik Indonesia (PGRI) Aceh, Kemendes PDTT, We The Teachers (WTT).
ZenCore, Live Class, Try Out, 24-hour solution of your math problem.
Study guide for Primary to Senior High Schools for exam preparations. There is also online study guide program.
Purdie Chandra and friends, established 1982 in Yogyakarta
Ganesha Operation
More than 265 branches nationwide
Study guide for Primary to Senior High Schools for exam preparations. There is also online study guide program. - Partners with many schools nationwide to offer study guide programs.
Bob Foster Sinaga, established 1984 in Bandung, West Java
BTA Group
14 branches in Jakarta area, Banten, Central Java, South Sulawesi
Study guide for Primary to Senior High Schools for exam preparations. There is also online study guide program. - Partners with many schools nationwide to offer study guide programs.
Alumni of State Senior High School (SMAN) 8 Jakarta, established early 1980s in Jakarta.
Salemba Group
15 branches in Jakarta, West Java, and Banten
Study guide for Primary to Senior High Schools for exam preparations. There is also online study guide program. - Partners with many schools nationwide to offer study guide programs.
Ihsan Mahyudi, established 1979 in Jakarta
Nurul Fikri Around 176 branches in Java and Sumatera
Study guide for Primary to Senior High Schools for exam preparations. There is also online study guide program. - Partners with many schools nationwide to offer study guide programs.
A group of students from University of Indonesia under Nurul Fikri Foundation. Established 1985 in Jakarta.
Source: BRI Danareksa Sekuritas
Reconfiguring business operations In industrial estates, the office sector is being impacted through the integration of technology, mobile devices and infrastructure that empower workers to work virtually anywhere. Recent studies show workplaces abroad are 60-70% vacant. Currently ecommerce players drive innovation and improve the consumer experience and personalization levels needed to build omnipresent channels.
Exhibit 68. Omnichannel presence shifted the purpose of store functionalities
Source: Deloitte
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Room for significant digital gains in the property market The real estate sphere is the sphere of big data. It comprises the real property estates, their characteristics, owners, companies, renters, and agents. With proper databases, info can be sourced on potential customers, and predictions can be made on market conditions and property prices, etc. Data collection can be carried out and further enhanced with AI.
Exhibit 69. Propertytech Market
Comp General Info + Matrix Affiliations Features Shareholders Valuation
Property Guru
Users: 2.8 million monthly real estate listings, 37 million monthly property seekers, 49k active property agents. Founded: 2007. HQ: Singapore. Operating Region: South East Asia.
Far East Organization, Yahoo! Singapore, 99 acres, Maybank, Domain Group, PHD, DBS,
Buy/Rent Properties (Apartments, Houses, Condos), Find Overseas Properties, Find Agents by Region, Featured New Projects, HDB Estates/Listings, Mortgages, Ask Guru, Area Insider, Hidden Properties, Property Guides/Resources
REA Group, TPG Capital, KKR & Co. Inc, Kohleberg Kravis, Emtek Group, Square Peg Capital, ImmobilienScout24, Property Guru Group
USD 544 Mn
Source: BRI Danareksa Sekuritas
Value creation through one super internet ecosystem. One superApp – one tech powerhouse. We believe in the by-product of multiplying capabilities in different sectors to create a synergistical environment for value creation. Technology powerhouses are magnets for smaller start-ups and pull the best talent. Start-up powerhouses will continue to do start-up acquisitions to create capabilities. An IPO would secure funding to continue such acquisitions we suspect in fintech predominantly, the consolidation of payment services, Insurance services, Healthcare and gaming. The permutations of services from disrupted sectors can be huge. Rapid speed to execute those services is important, and securing funding is of outmost importance. Venture capital firms take the risk and invest in early funding rounds for start-ups.
Exhibit 70. Venture Capital Funding in Indonesia
AUM/Funds Raised Portfolio Exits Affiliates
BRI Ventures
- Dana Ventura Sembrani Nusantara: IDR 300 Bn (Jun 2020) - Fund I: USD 250 Mn (2019)
Kejora - Kejora Star Capital I: USD 7 Mn (2014) - Kejora Star Capital II: USD 34 Mn (2016) - Intervest Star SoutheastAsia Growth I: USD 101 Mn (2017) - SBI Kejora Orbit Fund I: USD 26 Mn (2020)
Sicepat Express, Cek Aja, Investree, Pawwon, Snapask, Union Space, Smartstudy, Kredivo, Fastwork, Dekoruma, Allice 9, Qareer, Moneytable, Found8, Gushcloud, Finfleet, Digital Asia, Pomelo, Mathpreso, Prosehat, Cari Sayur, Swap, Your Logistic Partner, Ohora, Catchtable, Wee digital, Ravel innovation, Selleri
Gushcloud, bDigital, Jualo
Source: BRI Danareksa Sekuritas
Numerous opportunities to drive revenues. All ticket size consumer needs can theoretically be addressed. Some products and services are more important, some are more sticky, and some are more engaging for the consumer. Some are necessities and are essential for daily activities and some such as entertainment create new human experiences. These products/services are the essence in improving ecosystems. Some of those services can be interconnected to build a larger ecosystem among smaller ecosystems. The job of the internet companies is to pick up those goods and services and emphasize their benefits, create differentiation, encourage suppliers to create new products to address new needs through processing and analysis of data collected in online activities. The cash-cow is virtual goods and data vouchers especially where penetration is still growing. Groceries are very inelastic and relevant for all households. We see tech companies becoming increasingly powerful as their online channels become dominant, whilst merchant sellers will soon have limited options but to overweight their focus on online platforms.
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Exhibit 71. Consumer goods/services heatmap
Source: BRI Danareksa Sekuritas
Local and foreign players positioning for balance in scale. We reckon Indonesia is a very attractive investment destination being the 4th largest smartphone population in the world. (Newzoo), and according to telco operator disclosures has ~63% population penetration. Entering the new horizon with the employment of more cloud computing, and more markets in focus, we witnessed internet players consolidation, the formation of strategic alliances, the IPO of Bukalapak, and more fundraising. Softbank, Tencent with SEA as well as Alibaba-Lazada have placed bets to position from early on, recognizing market opportunities that can expand the merchants’ ecosystem beyond their local markets. Amazon, Google and Alibaba have invested heavily in infrastructure (specifically data centers), betting on computing, AI and
Fresh Veggies/fruits, Mass market appeal with habitual usagerequire cold storage and short expiry date
Packaged food, staples, RTC/RDC
Fresh poultry, meat, seafood, dairyMass market appeal with repeat weekly
usage, Requires cold storage. A sustainable model can revolutionize sales
CONSUMER NEEDS
Vouchers/prepaid cards
Utility bills
Tickets / bookings
Personal & home hygiene care
Food & Staples
Cigarettes
Beauty & Personal Care
Hobbies / interests
Transport / mobilityKey Ecosystem enablers
Food Delivery
Groceries Delivery
Ride hailing
Taxi Cab
Healthcare, early digital adoption stages, long runway in traditionally
underserved/underachieving market
Entertainment Highly engaging experiences
Education, Early digital adoption stages, long runway in
underachieving market
Automobile
Fitness/sports
Online Dating
Fintech, 60-70% population is
underserved
Payment services
Wealth management
Financing / consumer loans
Internet Insurance
Online Travel
OTT
Online Gaming
On-demand music
Social media
Live sports
Peer 2 Peer lending
Cloud
Cloud
Cloud
Esports
CONSUMER GOODS & SERVICES HEATMAP, Dark green → Heavy digital influence
Lighter green → early digital penetration
Cloud Secondary education
Tertiary education
Vocational training
Homeware / furniture /craft
Personal accesories
Babyfood, Niche but lucrative segment
Pet food,Niche but lucrative segment
Online media - infotainment
Course materials
Test preparations
47
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personalization. These strategic investors positioning in Indonesia is part of their bigger strategy to control balance in market share and scale. Indonesia is an important market contributing 40-42% of SE Asia’s GMV, but the GoTo merger is an opportunity to strengthen its local presence and put pressure in SEA on a regional scale. EMTK is Bukalapak’s largest shareholder, which formed a strategic alliance with regional superapp GRAB buying a US$375mn stake in Grab Indonesia, and Grab invested US$270.5mn in EMTK. EMTK also explored collaboration in the digital space with Salim group (running the largest offline distribution, transportation, & retail business, in addition to owning interests in data centers).
Exhibit 72: Start-ups benchmarking table.
Source: Bloomberg, Company Disclosures, BRI Danareksa Sekuritas
Investor positioning in tech. foreseeing strong revenue growth. The mass scale disruption characteristics in technology implies low hanging fruits opportunities and long term growth which is appealing for any start-up and every investor to bet on. Technology stocks are unique, in the sense that tech operations have room to become increasingly efficient and scalable at faster rates than conventional business growth models. Our benchmarking specimen offers the view of tech companies with valuations of multiples of forecasted revenues implying fast valuation multiples normalization with company growth. Several companies project strong cagr 2020-22, and some turn positive EBITDA and bottomline for the same period. Tech stocks entail adjustments to the investing paradigm because we now have to incorporate new business practices affecting business distribution, the value chain, go-to-market and digital marketing. Technology thrives best when there is low hanging fruit, people are tech savvy, there is a limited impact from generational gap effects, and ease in the shift of traditions.
Vidio.com 40mn active monthly users based on VOD content watched (2019)
60 million active monthly users based on VOD content watched (2020), up 1.5x from previous year
14.4 Mn 25.4 Mn
Disney+ Hotstar
N/A 2.5 million subscribers in six months since launched. Most subscribed movie streaming service in Indonesia ahead of Netflix.
204 Mn 273.5 Mn
Amazon Prime
124 million Amazon Prime users in 2019 (source: eMarketer, Statista)
148.6 million Amazon Prime users in 2021 (source: eMarketer, Statista) 0.05 Mn 0.12 Mn
Viu 41.4 million monthly active users, 5.7 billion video views in 2019 (PCCW Press Release)
45 million monthly active users, 5.3 million paid subscribers in 2020 (MPA Report) Paid subscribers grew by 47%, overall revenue by 30% compared to previous year. Subscription revenue increased by 62% YoY.
26.4 Mn 27.6 Mn
HBO 41.5 million subscribers in the US in Q4 2020 (Statista)
Movie viewing on HBO up 70% from four-week average during the pandemic. (Statista)
4 Mn 7.12 Mn
Disney Fox N/A N/A 11.5 Mn 11.7 Mn
iQiyi 104.9 Mn subscribers as of Q2 2020. This compares to 100.5 Mn of total subscribing members as of June 30, 2019, up 4% YoY.
105.3 Mn subscribers as of Q1 2021 with 3.6 million net additions during the quarter. Membership services revenue increased by 12% sequentially to RMB4.31 billion. (Press Release)
180.5 Mn 132.5 Mn
WeTV N/A N/A 18.2 Mn 23.2 Mn
iflix 15 million users (2018) 25mn MAU, 2.5 billion minutes viewed per month (as of April 2020) 1.85 Mn 0.9 Mn
RCTI+ MAU 29 Mn (2019) N/A 2.54 Mn 5.28 Mn
Mola TV N/A 2.65 Mn (2020) 11 Mn 54.77 Mn
Goplay N/A 200% increase in monthly active users (MAU) from May-June 2021. 0.04 Mn 0.23 Mn
MAXstream 3.6 million monthly active users in 2019 (Berita Satu)
8.2 million monthly active users in 2020 (Berita Satu) 0.12 Mn 0.12 Mn
Noice 450k users in Dec 2020 500k+ registered users in March 2021, Monthly active users (MAU) of around 180k.
N/A N/A
Garena N/A N/A 31.1 Mn 37.8 Mn
Dunia Games
N/A 4 Mn monthly active website visitors, streams 300 e-sports events every year (Dunia Games Official Website),
6.3 Mn 5.85 Mn
Ruangguru 15 Mn users, 300k teachers (2019) 22 Mn users, 300k teachers (end of 2020) MAU 13.06 Mn (2020)
13.6 Mn 11.6 Mn
Zenius 15 Mn users in website and app (end 2020)
20 Mn users in website and app (Jul 2021) MAU 3.79 Mn (2020)
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