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Mutual fund players turn to e-marketplaces for greater outreach
To get more young Indonesians to invest in mutual funds, industry players are looking to tech-based startups, such as e-marketplace unicorns Bukalapak and Tokopedia, which have a far greater reach than brick and mortar stores
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span>To get more young Indonesians to invest in mutual funds, industry players are looking to tech-based startups, such as e-marketplace unicorns Bukalapak and Tokopedia, which have a far greater reach than brick and mortar stores.
“We are focused on developing retail investment and, given our country’s archipelagic geography, traditional methods such as face-to-face meetings and seminars will be greatly enhanced by technology,” said Mutual Funds and Investments Association (APDRI) chairman Prihatmo Hari Mulyanto.
Prihatmo told reporters at the launch of a financial literacy campaign in Jakarta on Monday that institutional investors still dominated the domestic mutual funds market but that, going forward, the association would focus on individual investors.
“We are talking with many other start-ups,” he told The Jakarta Post.
Financial Services Authority (OJK) investment management director Sujanto said on Monday that the number of Indonesian mutual fund investors had surpassed 1.5 million individuals as of Nov. 14, up 50.7 percent from 995,510 investors recorded last year, which indicated a growing appetite for such financial products.
“But we are not satisfied, because [local investors] only represent 0.8 percent of the population. Among ASEAN countries, that figure goes up to 20 percent of the population,” he said.
OJK data also show that Indonesia had more than Rp 553.27 trillion (US$39.45 billion) in assets under management in October, up 9.1 percent from the same month last year.
Tokopedia fintech associate vice president Samuel Sentana said the company, which had 90 million active users a month, saw a good business opportunity in mutual funds after a company-funded survey found that “Tokopedia helped 78 percent of users better understand digital financial products.”
The company said in a statement that sales of its mutual fund products launched in February had grown 1.5-fold between March and September this year, but it did not mention the absolute value.
Samuel said mutual funds were a popular product among students while gold, an alternative investment product offered on the platform, was more popular among housewives.
Tokopedia currently only offered low risk, money market mutual funds, but Samuel said the company planned to introduce two higher risk mutual fund products before the end of the year.
Rival e-marketplace Bukalapak began selling mutual funds in January 2017, when it announced a partnership with the asset management arms of private lender CIMB and state-owned lender Mandiri. The company has since expanded to working with four other such companies and, most recently, with financial e-marketplace Tanamduit.
"We hope our partnership with Tanamduit will boost financial literacy and investment in the country," said Bukalapak head of payment and financial services Destya Danang Pradityo.
He added that Bukalapak currently had 120,000 mutual fund investors, around half of whom were active investors.
Indonesia Stock Exchange (IDX) development director Hasan Fawzi said a crucial element to pushing retail investment in mutual funds were financial literacy campaigns, such as BEI’s YukNabungSaham program and Tokopedia’s InvestasiAjaDulu campaign.
He said Tokopedia and IDX would boost financial literacy by aiming to hold seminars in the five major cities of Jakarta, Bandung, Semarang, Yogyakarta and Surabaya this year, before expanding to smaller cities.
“This year, we have 600,000 new mutual fund investors, while the number of new equity investors has reached 230,000,” he said, adding that IDX planned to attract more new investors through such campaigns in the future.
