Korean Internet companies are making forays into the Indonesia market, viewing the nation as the bridgehead in the global market on the grounds of the growing mobile market and less strict regulations than China. Market watchers say the nation has a high growth potential, having around 54 million uers searching Internet via their smartphones and 62 million using social media sites. South Korea’s two largest Internet companies Daum Kakao and Naver have already jumped into the Indonesian market by either acquiring local companies or rolling out localized services. Daum Kakao, which owns the nation’s most popular mobile messenger Kakao Talk, recently acquired Indonesia’s one of three popular social networking sites “Path” for around 22 billion won. Path’s monthly active users stood at 10 million last year, up 200 percent from the previous year. Daum’s spokesperson said, “Path has a high potential to grow as the global platform as it has a great user loyalty and the number of users in the Middle East is rapidly rising.” This is a good opportunity for Daum Kakao to overcome the growth limitation centering on revenues generated Korea-based search engine and games, according to Yuanta Securities. Naver’s Japanese arm Line messenger is also ramping up efforts to foster its service in Indonesia.
Currently, Line comes in second place in the Indonesia’s messenger market, followed by BlackBerry Messenger. Line’s monthly active user sharply increased to 26 million during the first quarter of this year, up from 8 million users during the same period of last year. With the market share of BlackBerry phones declining and that of Android phones increasing in the nation, Line is expected to be a dominant player soon, according to analysts. Naver lineLine is especially to center on “Searching for alumnus via Line” given that the nation has high needs on the service. In the lead-up to Indonesia’s largest holiday Ramadan, Line is set to provide diverse services including notifying the end time of fasting period or providing relevant prayer. Yello Mobile, tech startup, has also acquired Indonesia’s digital advertising company ADPLUS this March, following the purchase of price comparison website PriceArea last September. ADPLUS is ranked third in Indonesia’s digital media advertising market, and in charge of big marketing campaigns from Samsung, Nokia and Chevrolet. It is also reportedly in discussion with other deals.
Yello Mobile’s chief Lee Sang-hyuk predicted that “Indonesia’s advertising market would grow to 15 to 20 trillion on in five years.” The reason behind Korean tech firms’ latest forays to jump into the market is that they are confident of growth potential of the Indonesian market, analysts said. Indonesia has the fourth largest population in the world with 250 million and is seeing a fast growth in gross domestic product. Its GDP ranked 17th last year with $856.1 billion. Its mobile market also has a high potential. Last year, the number of smartphone users in Indonesia stood at 61 million, accounting for 24 percent of the total population. It is expected to reach 100 million by 2018, twice the number of Korean smartphone users. With the rising smartphone penetration rate, relevant businesses such as mobile shopping or online advertising are also expected to grow. According to the latest report released by the Korea International Trade Association, Indonesia is gaining spotlight as a promising economy with abundant laborers and dynamic consumers. The nation has continued to see five to six percent economic growth since 2010 amid the global economic slowdown. Out of its 250 million population, 66 percent is economically active and 61 percent is youth under 35. Its middle-income class is fast rising and the urbanization is expected to grow to 72.1 percent by 2050 from 53 percent last year.
First seen at: Korean IT Times
