The Indonesian technology market is at a tipping point and could grow exponentially to $ 200-300 billion in the next two to three years, said John Riady, director of Lippo Group – one of the country’s largest conglomerates.
“Indonesia is the most exciting digital and technology market in Asia and probably also worldwide,” Riady told CNBC’s “Street Signs Asia” on Thursday.
“When our group first invested in technology in 2012, the total technology market in Indonesia was approximately $ 100 million. The same asset class is now approximately $ 40 billion,” he added.
The Lippo Group is founded by Riady’s grandfather. The conglomerate has businesses in a variety of sectors including real estate, retail, healthcare, and telecommunications. Riady has led the group’s technology company and is also CEO of real estate developer arm Lippo Karawaci.
Riady told CNBC that the group has made more than 30 investments in Indonesia’s tech space, including OVO, a Jakarta-based company digital payment platform. He said Indonesia was on the verge of a technology turning point similar to what China saw in the early 2000s, when technology adoption was soaring.
Indonesia is the second largest economy in Southeast Asia and the fourth largest country in the world with more than 275 million inhabitants. The country is home to several so-called unicorn startups – or private companies valued at $ 1 billion and more – including e-commerce companies Bukalapak and OVO.
Investors have said that the country’s growing internet users and growing middle class are the prerequisites for a digital boom. However, Indonesia is a difficult market for navigation, also because the population is spread over more than 10,000 islands – many of them with their own culture and language.
Still, the growth potential of the Indonesian tech scene has paved the way for internet startups that have caught the attention of international investors.
Last week, two of the country’s leading tech companies, hail and payments company Gojek and e-commerce company Tokopedia, announced a merger to create a company called GoTo Group.
The GoTo group has prominent supporters who have previously invested in Gojek or Tokopedia. These include the Chinese technology giants Alibaba and Tencent as well as Sequoia Capital India and the state investor Temasek from Singapore.
– CNBC’s Saheli Roy Choudhury contributed to this report.