Exploring synergies and consumer insights in the China-Indonesia business landscape

The dynamic interplay between China and Indonesia’s tech landscapes provides us with a plethora of unique insights and cross-border collaborations. At the recent East Ventures Summit 2024, industry leaders with strong experience and backgrounds in the Chinese tech industry—Mulyono Xu, Co-Founder and CEO of Desty, Qin Jin, Investment Director / Head of Emerging Markets of Alibaba, and moderated by Li Yu Fu, Founder and CEO of 7.5 Degree—gathered to share their nuances.

The panel highlights Chinese founders’ growing interest in Indonesia’s bountiful market opportunities and addresses critical topics such as fostering partnerships, strategic investment outcomes, and inbound opportunities for mutual growth in the tech ecosystem.

The transcript of the panel discussion below has been edited for clarity and brevity.

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Li Yu Fu: The first topic under our main discussion is bridging cultures in the market, specifically looking at both Chinese and Indonesian tech landscapes in investment and entrepreneurship ecosystems. Mulyono, based on your decade-plus of experience, including 15 years in China, what unique insights can you share from your time in China’s tech industry that could be applied in Indonesia?  

Mulyono Xu: I spent my university years in Hangzhou, where, as you know, it is the place where Alibaba first started. I became very attached to startups, the internet, and the digital economy. I believe the passion and the way people in China viewed how the digital economy and technology could change society and business was fundamental to the industry’s evolution over the past 20 years. That mindset is something we, in Indonesia, can learn from—not just the practical aspects but also the core belief that Indonesia can benefit from the infrastructure changes brought by the digital economy and technology. That is my first point.

Secondly, much of what China has experienced over the last 20 years is happening here in Indonesia, but in some ways, it is happening faster. We can learn from China and adapt locally, but at some point, we need to follow our own path. Our ride-hailing companies, for instance, have emerged more quickly than in China because we have learned, adapted, and accelerated faster. The same goes for e-wallets. In China, they started around 2012-2013 and grew rapidly. In Indonesia, they took off around 2016, but the entire process happened much faster. So, my second point is that while we learn and adapt, we also evolve at a quicker pace.

Li Yu Fu: Based on what you have shared, especially your second point, it seems like a “time machine” theory—what took 20 years in China is happening faster in Indonesia. Qin Jin (JQ), from an investor’s perspective, what similarities and differences have you seen between the tech landscape in China and Indonesia over the past decade?

Qin Jin (JQ): Yeah, I think I agree with Mulyono. You could call it a time machine or pattern recognition, right? Especially when entrepreneurs are deciding what they should do or can do and pitching to investors, it’s always helpful to start at a high level. We see business models from the United States (US), China, Japan, Korea, and India and think, “Perhaps we can do something similar in Indonesia.” I think that still applies.  

But if I could pick one thing from the previous session, it is about executives transitioning into entrepreneurs; always interesting. The example they used last time was search engine marketing (SEM) at Facebook. Once you put ideas into action, there are 1,000 details to figure out, and you suddenly realize there are many assumptions you took for granted. Things are a little different in Indonesia compared to other places, and all of these details add up, making things significantly different. One example is e-grocery. In China, certain things are taken for granted, but here in Indonesia, the delivery model and price sensitivity are on a completely different level—whether for better or worse.  

Li Yu Fu: Our next topic is about cross-border collaboration. Now that we have laid the groundwork, let’s explore how China and Indonesia can collaborate. My first question is for you, JQ. Given Alibaba’s extensive experience in various markets, what are some strategic outcomes or key milestones in terms of investment in Indonesia?

Qin Jin (JQ): I think one key thing we have learned is that we are part of an ecosystem. Going back to an earlier example, let’s talk about e-wallets. Even today, e-commerce still accounts for a significant portion of e-wallet transactions. Alibaba was fortunate to invest in one of the leading e-wallet companies in Indonesia, which complements our e-commerce business very well. This is an example of how we bring technology and know-how to the table, but we are not a one-stop solution. We need to partner with local champions, and through win-win collaborations, everyone benefits—not just economically but also in ways that benefit users and society as a whole.

Li Yu Fu: Speaking of collaborations, there are always language barriers, cultural barriers, and many other potential obstacles. Mulyono, what role does cultural understanding play in successful business collaboration between China and Indonesia?

Mulyono Xu: This is a very interesting topic for us because our engineering team is based in Hangzhou, while our business, marketing, and sales teams are in Jakarta. In the first year, we had significant culture clashes. Eventually, after about a year, we found a pattern to manage the teams. 

For example, in our case, the product team needs to be on the user side, so we have product managers in Indonesia, while the technical side is handled in China. The crucial things in this process are the standard operating procedures (SOP) and documentation. Even if the product side is in Indonesia, without a strict documentation process—especially for those familiar with engineering who will understand this—it can create many issues and inefficiencies in communication.

So, the first cultural challenge is figuring out how we work together and understanding which aspects each team has more influence over. After that, having strong SOPs, processes, and documentation is essential.

However, cultural understanding is not something you can simply put on a wall. It is something you need to really grasp. 

Li Yu Fu: When it comes to cultural understanding in business, especially in investments in Indonesia or China, what role does it play in successful collaboration between Chinese and Indonesian firms?

Qin Jin (JQ): One key thing I have learned is the importance of providing background information in a concise way. Always assume that your colleagues, whether they come from different cultural backgrounds or different functions, know nothing about your project, no matter how important it is. I found this to be incredibly important. It may take a little longer, but in the end, the results are much better in the long run. That is a key lesson for me.

Li Yu Fu: Let’s shift to the next topic: the influx of Chinese founders seeking opportunities in Indonesia, especially after 2022. We have seen a lot of Chinese investors and entrepreneurs coming to Indonesia and Southeast Asia—flights after flights. Some of my friends in Shanghai told me that in 2022, entire flights were filled with investors heading to Singapore and Indonesia. In 2023 and 2024, even more founders have followed.

What are the major pain points in Indonesia’s business landscape? And what advantages do Chinese entrepreneurs have when finding opportunities here?  

Mulyono Xu: As you mentioned, in 2022, 2023, and now into 2024, there has been a massive wave of people from mainland China. In 2022 and 2023, I think one of the biggest reasons for this influx was TikTok. A lot of these people came to become sellers or part of multi-channel networks (MCNs). Of course, there were others, but TikTok was the main driving force. They saw a new trend and opportunity in the Indonesian market that local players had not fully grasped yet.

In Chinese, there is a term that refers to a time gap for gaining an advantage. In the early days of TikTok Shop, most of the sellers had Chinese backgrounds. Many Indonesian or global brands weren’t even trying—they didn’t have the budget or didn’t understand the potential. This gave Chinese sellers a window of at least a year and a half to establish themselves. As a result, many new brands with Chinese backgrounds emerged during 2022 and 2023.

2024 is a different game. The situation is changing, and we all know what happened with TikTok Shop at the end of 2023. Now, in 2024, the dynamics have shifted. It’s not as much of an advantage anymore—costs have gone up, and the environment has become more competitive.

As for 2024, it is mostly driven by the situation in China itself. A lot of people are leaving, trying to figure out where to go overseas. They do their math and conduct basic research, and Indonesia usually comes out on top. People come here because of the demographic opportunities, supply chain advantages, and other macroeconomic factors that look attractive.  

I don’t think Chinese entrepreneurs see many pain points here. Compared to their home country’s environment, they likely view Indonesia as a land of opportunity rather than one filled with obstacles. At home, they face what’s known as “intense market competition.”

An easier way to put it is that the business environment in their home country is very competitive. So when Chinese entrepreneurs come here, their first impression is that there are no real pain points—they feel like they are walking into a land of opportunities.

Li Yu Fu: Let’s continue on the same topic but from a different perspective: As an investor, what are the key opportunities you see for Chinese founders in Indonesia? And do you think they can stay here long enough to become the next unicorn, or will they eventually go back?

Qin Jin (JQ): The key opportunities are linked to Indonesia’s rising GDP per capita and large population, which is why many entrepreneurs are coming here. However, what entrepreneurs, whether Chinese or otherwise, eventually realize is that you cannot just focus on the numbers.

Cross-border operations are a great example of this. At first glance, it seems simple: you have the costs, the selling price, and a nice margin. But when you look at the bigger picture, you cannot just think about your own enterprise. You need to consider the government’s perspective and the needs of society as a whole.  

Many entrepreneurs do not want to tackle localizing manufacturing, for example, because it is hard work. But if you want to make your growth sustainable, that is a task you need to consider.

We are currently investing in a cross-border B2B company in Indonesia with Chinese founders who have been here for over 10 years. They are working with about 60,000 mom-and-pop shops and are encouraging their Chinese suppliers to set up local manufacturing facilities. Initially, I thought this was extra work. But after seeing how things have unfolded over the past 12 months, I think this is the right direction—not just for Chinese entrepreneurs but for anyone who wants to succeed in Indonesia long-term.  

Li Yu Fu: In the last five years, or after 2022, which industries in Indonesia are most worth investing in, and why?

Qin Jin (JQ): While we have mainly been focused on e-commerce, there are other exciting sectors. Personally, or even from Alibaba’s standpoint, we can’t invest in them at this stage, but electric vehicles (EVs), especially two-wheelers, and healthcare are very promising sectors. I think EVs, even four-wheelers down the line, and healthcare offer significant investment opportunities.  

Li Yu Fu: How do demographic shifts in China and Indonesia impact consumer behavior? Earlier, you mentioned TikTok sellers from China, but all the consumers or buyers are local. So, how have these demographic changes affected consumer behavior before and after TikTok?

Mulyono Xu: I do see a big shift in how the new middle class receives and perceives brands and news. Structurally, it has opened up new opportunities for products and brands to tell their stories in a way that resonates with this emerging class of consumers, who are now entering an age where they can start spending more.  

However, I would not say this shift is only because of TikTok. I think it started back in the Instagram era, and it’s comparable to what’s happening with Xiaohongshu in China. It is all about how the new middle class perceives brands. This has created a significant opportunity for newcomers to capture attention faster than incumbents, who are often not prepared for new media formats and storytelling techniques.  

This change impacts not only products and brands but also local services like food and beverage (FnB). In the past, restaurants did not need to create content. But now, even if you’re selling something as simple as bakmi, the better you are at creating content, the more successful your business can be. This creates both new opportunities and challenges, and whoever adapts fastest will be the one to succeed.

Li Yu Fu: One deeper question: how can all the founders here adapt?

Mulyono Xu: I have this challenge myself. Some of my team and investors have been telling me that I need to create content and build my personal brand, but I have no idea how to go about it. Honestly, I sometimes resent the idea because I feel it is part of my job, but I’m not good at it. 

Adapting is crucial—whoever can do it quickly will gain an advantage. I’m learning and trying my best, but there is no one-size-fits-all formula. Many talented founders successfully create content and build trust with customers and partners, and I think that is very important.

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You can learn more insights from this panel by watching the full session below.