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Lessons for Chinese fintech firms in Indonesia
The way Chinese fintech companies deal with business lacks sustainability in the market. They focus mainly on user acquisition; expanding partnerships and user base, while unable to improve the quality of service channels and products, which are the core of technology companies.
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The way Chinese fintech companies deal with business lacks sustainability in the market. They focus mainly on user acquisition; expanding partnerships and user base, while unable to improve the quality of service channels and products, which are the core of technology companies. (Shutterstock/File)
T
he success of signing important infrastructure deals between China and Indonesia in past few years, as part of the One Belt One Road South-South Cooperation initiative, ensures the smooth entry of Chinese financial service technology (fintech) companies in Indonesia. After a nationwide crackdown by the Chinese government on small-loan and online credit fraud in China early this year, the tightened regulations give a further push for fintech companies to pour into Indonesia.
In China’s financial services and investment circles, Indonesia is a perfect lan hai (blue ocean) business, meaning that it is a big potential market with a large smartphone user base and abundant opportunities. Many almost bankrupted or less competitive financial services companies in China have found the new hope of making “super apps” in this emerging market.
As shown in The Fintech Edge report by Klynveld Peat Marwick Goerdeler (KPMG), there are 58 million small-and medium enterprises (SME) across Indonesia, while 95 million people — one-third of Indonesia’s total population — are unbanked. This imbalance between high purchase potential and low access to borrowing and lending money leaves trillions of rupiah in transactions for informal financial channels and online credits to fill in the gap.
Unfortunately, despite the great potential and opportunities, Chinese fintech companies have yet to adapt to Indonesia’ fintech ecosystem and are still holding on to their very own system and mindset in running companies in Indonesia.
The way Chinese fintech companies deal with business lacks sustainability in the market. They focus mainly on user acquisition; expanding partnerships and user base, while unable to improve the quality of service channels and products, which are the core of technology companies.
In China, the top-down management approach with the enforced 996 working-hour rule (employees work from 9 a.m. to 9 p.m., six days a week) is widely practiced at start-ups and internet firms to achieve high productivity and prosperity, the nation’s top priorities. In Indonesia, meanwhile, companies and corporations do not impose long working hours. The cordial relationship among colleagues, a creative environment and fixable management style are otherwise highly regarded at Indonesia’s internet and fintech workplaces.
When Chinese fintech leaders launch their businesses in Indonesia, they force their management style onto the Indonesian working culture.
