Recently, I brought eight colleagues to Indonesia to explore this popular destination for going global. This article is based on first-hand observations, not hearsay, and was written with the attitude that without investigation, one has no right to speak. We will continue this going global column in the future, and we hope you enjoy it. **Indonesia is crowded with anxious Chinese people Some stereotypes need to be broken At 2:25 AM, the moment the traffic light turned green, dozens of motorcycles roared past at extremely high decibels. This is a Jakarta night. In Indonesia, motorcycles are the most important means of transportation, and the roar of motorcycles is the city's background sound. If you stay at a hotel facing the street in Jakarta for a few nights, you will definitely thank China for its restrictions on motorcycles. Our exploration series has reached its fourth episode, and Indonesia is the first overseas destination in this series. I know many people want to ask me: Are there still opportunities in Indonesia now? Can Chinese people go there and make money? I can only say that opportunities exist, but the money is not easy to make. In the past year, many Chinese people who couldn't keep up with the rat race have gone to Indonesia, only to find that they haven't escaped the rat race but have just moved to another place to continue it. If you have a slightly deeper experience in Indonesia, you can see that it is already crowded with anxious Chinese people. Even at breakfast in the hotel, you can hear Chinese people at the next table discussing how to make money. Indonesia is the world's fourth most populous country and the largest single market in Southeast Asia, and it is in the process of upward development, so many Chinese people like to imagine Indonesia as an undivided big cake. That's overly optimistic, friends. For example, we have a fan who opened a Chinese restaurant in the PIK area of Jakarta (the Chinese enclave in Jakarta). Many people choose this direction when starting a business abroad, right? But in fact, the number of Chinese restaurants in Jakarta has exceeded the total demand of local Chinese, and local Indonesians are not used to Chinese food, so it's hard to count on doing business with locals. Many Chinese restaurants in PIK often open and close, and many shops change signs and owners shortly after opening. Indonesians indeed don't roll, but our compatriots do. Compared with the level of involution in China, Indonesia is a market of opportunity, that's true. But we must also realize that while Indonesia has a lot of opportunities, it also has huge complexity. If you only see one side, many stereotypes will harm you. What this article aims to do is to break stereotypes based on field research and visits to local enterprises. Ordinary Indonesians consume more than Chinese middle class Ultra-low price is not the only way out Let me first state two conclusions: First, Indonesia has a huge gap between rich and poor, with a group of wealthy people with considerable economic strength who love to consume; Second, an Indonesian earning 3,000 RMB per month may spend more on consumption than a person in Shanghai earning over 10,000 RMB per month. For example, in July, Pop Mart opened its first store in Indonesia in Jakarta, and we made a special trip there this time. Actually, before going, I had a question: The average monthly income of ordinary Indonesians is only about 2,000 RMB. Pop Mart is a brand with a threshold even in China. Will anyone in Indonesia buy it? Or can anyone afford it? What is a stereotype? This is a stereotype. The first thing I did when I arrived at the store was to look at the price tags. Converted to RMB, they were about 89 to 99 yuan. According to the average income of Indonesians, the price is not low. But contrary to expectations, the foot traffic in the store even exceeded that of many Pop Mart stores in China. The customers in the store could be seen to have good economic strength, carrying bags from GUCCI, LV, and the like, with the more ordinary ones being Longchamp or COACH. In my previous articles, I often said that the change in China's consumer market in recent years is consumption stratification. This time I found that the primitive state of the Indonesian market is consumption stratification, with a considerable number of wealthy people at the top of the pyramid. At the same time, Indonesians have a particularly strong desire to consume. They spend as much as they earn, and if they like something expensive, they still buy it. This is a different logic from the domestic market. To what extent do Indonesians love to consume? Let me give an example: We visited the largest TikTok distribution company in Southeast Asia, and the employees there earn about 3,000 RMB. In Beijing, Shanghai, Guangzhou, or Shenzhen, with this income, you would have to tighten your belt, but these people earn 3,000 and can spend 3,500, covering the 500 difference with small loans. In China, a white-collar worker in Shanghai earns 15,000 per month. As soon as the salary arrives, more than 10,000 goes to the mortgage card, and at least 2,500 is needed for basic survival like food and drink. How much is left for other consumption? So whether you go to Indonesia to do small business or to build a brand overseas, don't think of Indonesia as a purely low-price market. I'm not a startup guru, so I can't tell you what to do to make money in such a market. But take my advice: When going to Indonesia to make money, don't always focus on low prices and cost-effectiveness. The high-end and quality route is also full of potential. **Everyone thinks of Indonesia as an e-commerce fertile ground But the cost of express delivery determines the ceiling of e-commerce development Previously, when doing research, I read many articles about e-commerce going global in Indonesia. Many people say that Indonesia today is very much like China in the past, with rapid development of the e-commerce industry, thriving, and all good. In a sense, that's a bit reasonable. Indonesia has a population of over 270 million, with an average age of less than 30. In addition, Indonesians love to spend money. Isn't this a pure blue ocean market? Friends who have this idea, pay attention: I'm going to pour cold water on you. Indonesia's present may be very similar to China a few years ago, with the rapid rise of the e-commerce market. But the future of Indonesia will not be like China today, and its geographical environment determines this. In China, as long as you are not in remote areas like Xinjiang or Tibet, you can receive anything you buy on Pinduoduo for a few yuan within three to four days. Chinese people are used to buying everything online, which is cheap and convenient, so offline business is squeezed and out of breath. But in Indonesia, e-commerce can never replace offline. Offline is forever young and forever full of hope. Why? Because Indonesia is a country of ten thousand islands, and logistics is a big problem. Indonesia spans Asia and Oceania, crossing the northern and southern hemispheres. Among its main islands are New Guinea, Kalimantan, Sumatra, Sulawesi, and Java, with a total of over ten thousand large and small islands. With vast territory, scattered population, and poor infrastructure, logistics costs and delivery efficiency are completely different from China. Let me give an example: In China, even if you buy large items like refrigerators, washing machines, or big sofas online, they are delivered for free, right? But in Indonesia, the delivery fee for a pot can exceed the price of the pot itself, and even be several times the product price. An e-commerce company we interviewed shared a statistic: their minimum delivery cost is 4 RMB, and it can go up indefinitely. A user bought a pot from them, and because the location was relatively remote, the delivery fee was 400 RMB. So it's easy to understand that for Indonesians, offline has an irreplaceable position. Don't get me wrong; I'm not saying that Indonesian e-commerce is not doable. It is, very much so. But before doing it, you need to have some psychological expectations. In Indonesia, your competitors are not only other e-commerce merchants but also offline. How to compete with offline is a differentiating proposition for Indonesian e-commerce. Religion is not just a cultural issue It's also a legal and regulatory issue Here's a hot fact: Of Indonesia's over 200 million people, more than 87% are Muslims. Before going to Indonesia to dig for gold, be prepared for a baptism of religious culture, friends. To what extent is Indonesia's religious atmosphere strong? Let me describe a scene for you to imagine. When you go to Jakarta on a business trip, after a day of running around, you return to your five-star hotel, lie down in bed exhausted, and plan to use sleep to heal your body and mind. At this moment, the loudspeakers outside the window start playing prayer songs. Listen carefully, the whole city is filled with this sound. You can't understand it, but it's catchy. Devout Muslims in Indonesia pray five times a day, at fixed times and places. Even at work, they have to stop and pray. What does this mean? Chinese workers have about five paid toilet breaks a day, but there, they have five paid prayer breaks. Many Chinese companies that go to Indonesia haven't made psychological preparations for this. They go there and find that employees are always leaving their posts to pray. Many Chinese companies going global to Indonesia have this plot: first they are shocked by the frequency of Indonesian employees' prayers, then they find that religious culture cannot be changed, so they can only build a prayer room in the company. Moreover, religious issues are not just cultural issues but also legal and regulatory issues. A certain Chinese factory produces particularly good cosmetics. Can they sell directly to Indonesia? Without halal certification, you can't even get an entry ticket. Although cosmetics are not food, halal certification is still required. Even Mixue Ice Cream & Tea has to be halal in Indonesia. I passed by a Mixue store and specifically noticed that the glass door had a HALAL certification mark, with a special note of 100% HALAL. According to local friends, halal certification varies from country to country, and it's not a one-size-fits-all label. If you sell to multiple Muslim countries at the same time, you need to get several halal labels. In short, whether you are an individual wanting to open a small shop, a factory wanting to sell goods there, or a brand wanting to conquer Southeast Asia, you must understand religious issues in advance. Otherwise, the market will teach you a lesson. Pure blue ocean markets are rare Tracks that look like big opportunities hide many competitors Standing in 2024, any track that a Chinese person can think of to do in Indonesia must already have many Chinese people doing it. If there is an industry with very few Chinese players, there is only one possibility: strong players from other countries have monopolized the industry, leaving no room for new players to enter. For example, we all know that China's tea drink market is particularly competitive, with too many milk tea shops closing down, and even those who recycle second-hand equipment for milk tea shops are too busy. Now Indonesia is equally competitive, with brands like Mixue Ice Cream & Tea, Shuyi Xiancao, Tianlala, and Momoyo having entered, and it's very competitive, just with a different degree of involution than in China. In addition, there are some industries where Chinese brands have never made a splash locally. It's not that Chinese brands haven't gone there to develop, but that competitors from other countries have already dug out the market. Take the automotive industry as an example. Chinese new energy vehicles are now beginning to enter Indonesia. Opportunities do exist, but grabbing a piece of the cake is not simple. As soon as we landed at Jakarta's airport, the first advertisement we saw was for BYD, and after leaving the airport, the billboards on the airport expressway were also for BYD. But after arriving in downtown Jakarta, 70-80% of the cars we saw were Japanese cars, with the most common being local brands and Toyota, and occasionally we saw a new energy vehicle. In the past two years, Chinese new energy vehicles have begun to pry into the corner of Japanese cars in Southeast Asia. GAC Aion, BYD, Neta, and other car companies have all gone to Southeast Asia to build factories, wanting to grab a piece of the cake. But grabbing the cake is not simple. Having said so much, I still want to express one point: Most industries in Southeast Asia are no longer blue ocean markets, or at least not as blue as some people imagine. It's not like going there and harvesting crazily in an unmanned area. As I said at the beginning of the article, break stereotypes and don't easily believe the booming voices on the internet that tout the Indonesian market. Information about the tea drink and automotive industries is easy to find online, but many other industries have relatively opaque information. People easily act on the words of friends, relatives, or big V's, and the water is deep. There are still people online saying that doing catering in Jakarta is great. Whether it's really good or not, you need to be cautious. One-sided information can easily form stereotypes. If you really believe it, you lose. **Indonesia is a patchwork It doesn't hurt to look at more sides Indonesia is not a market that can be simply described. From different perspectives, it looks different. Some people say that Indonesia's e-commerce market is developing rapidly with many opportunities, but they won't tell you that halal certification has pitfalls, logistics is particularly cost-consuming, and there are many involution compatriots in the industry. Some people say that Indonesia is a blue ocean, but they won't say that many industries are already crowded with anxious Chinese people, and it's still competitive. The Chinese who came first have already tasted huge benefits. For those who only think of going now, it's hard to say whether it will be bitter or sweet. All data and reports cannot most accurately reflect the overseas market. The only thing to say is: listen to different voices and go to the local area to see for yourself. The brave enjoy the world first, but I suggest you be brave and cautious.