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.

“Disciplining” people to ensure maximum productivity in an overseas market, however, shows a lack of wisdom to work with differences and an inability to change, eventually losing employees and loyal partners.

This problematic style of management is also a consequence of lacking qualified, visionary leaders in management positions. According to Chinese career websites, China’s top-tier internet companies, such as Tencent and Alibaba, are among the most popular companies for new graduates. They have the highest recruitment standards and only the top graduates get to join these firms.

Compared to these internet giants, the less known, still-growing new companies operating outside China are far less competitive in the job market.

To attract graduates, they offer middle-to top management positions, with no relevant work experience required.

Managing a fintech business in an overseas market requires managers to have years of experience, solid cross-dimensional knowledge, a long-term strategic vision and intercultural communication skills. However, new to the workplace and business field, these young managers who speak a little or no Indonesian at all are not capable of steering the business in the right direction, sensing market trends and managing people in Indonesia.

When it comes to decision-making, problem-solving and communication, the pressure, limited capacity and inadequate experience not only forbid them from making a smart move, but also bring trouble to their local subordinates. Young interns from China also face frustration and disappointment working alongside their stubborn supervisors.

A PricewaterhouseCoopers (PwC) report points out that fintech companies have created some 200,000 jobs in Indonesia. As the fintech industry continues to grow, many young Indonesian graduates choose to join a foreign fintech as a springboard for experience and career advancement.

However, most of the small fintech companies from China largely rely on venture investments; they are short in budget allocation and aim at quick, short-term outcomes and, therefore, do not invest in employees through work training.

Without adequate training and career development plans, employee performance and potential can only be evaluated through numbers and key performance indexes (KPI). This KPI-orientated work culture does not support young people to grow and learn. Therefore, even though many job offers are available, they are not sustainable and secure in the long term.

For Chinese fintech leaders, the Indonesian market is easy to access, but successful businesses are hard to grow. Indonesia’s fintech ecosystem and the microeconomic landscape are different and more diverse from China’s. Furthermore, the unique productivity miracle achieved by fintech giants in China only works under certain policies and thus cannot be simply copied and pasted in Indonesia.

Management and investors of Chinese fintech companies should learn to navigate the cultural differences and embrace the local ways — but it will take time. The counterproductive top-down management style and ignorance toward the local market would not only hurt the business and image of Chinese companies abroad but also eventually force them out of the game.

When in Rome, do as the Romans do; this simple yet crucial survival fact is the key to a win-win situation for both sides.

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Monash University graduate who works at a foreign company in Jakarta

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