In 2021, Indonesia’s digital economy value reached US$ 63 billion and is expected to reach US$ 360 billion by 2030. How do startups play a pivotal role as the catalyst of digital economy growth?
According to a recent report from Meta and Bain & Company, Indonesia is home to about 168 million digital consumers, with 46 percent of them aged 15 or over in 2022. This was a 14 million increase from 2021. The Indonesian Internet Service Provider Association (APJII) also recorded more than 210 million internet users in Indonesia in 2022, an increase from 175 million before the pandemic.
This highlights how digitalization can drive tremendous benefits by offering new economic growth opportunities across various sectors, including the tourism industry. Digital platforms like Traveloka have created an access for local businesses in each region to connect with the global market. Our accommodation and transport partners, for example, can now encounter numerous opportunities from travelers across the world. Furthermore, our financial services arm has provided choices and access for credit to the underbanked segments that were previously unreached by conventional financial institutions.
Digitalization through a platform like Traveloka has also led to job creation and improved the quality of skilled talents for Indonesia’s digital economy. We have more than 2,000 employees across six Traveloka’s operating markets in Southeast Asia, of which the majority is based in Indonesia. Through our business operations, our talents have the opportunity to enhance and advance their skills in the area of expertise that is previously unavailable in a job market, such as cloud computing expert, data scientist, data engineer or analyst, product manager, and even sustainability expert. In addition, we collaborate with governments and academic institutions to create opportunities for young digital talents to upgrade their skills through an enhancement program via internship at Traveloka.
At Traveloka, we believe that technology has the ability to create an equitable future for all, one where every person and society – from developed to emerging economies – can benefit. As the leading travel platform in Southeast Asia, Traveloka plays an important role in building a sustainable and inclusive ecosystem.
The global economy is experiencing a multidimensional crisis or perfect storm due to a recession, an energy crisis, and geopolitical tension. What is Traveloka’s strategy to navigate such conditions?
Traveloka is cautiously optimistic that we will see complete post-pandemic recovery by 2024. This is an opportunity for Traveloka as most borders have now fully reopened and the surge in travel demand is nearing pre-pandemic levels, giving us the chance to deepen our engagement with our users. With this in mind, we will remain prudent in our finances while staying focused on providing a comprehensive and competitive selection of travel products to the Southeast Asian consumers
Southeast Asia is a home to 600 million people – almost half of whom are in Indonesia. We believe that this unique position in the global economy allows us to be well-poised for further
growth in a promising sector, especially with the resurgence in demand following the easing of pandemic-related restrictions worldwide. Furthermore, according to the e-Conomy SEA 2022 report published by Google, Bain and Temasek, this progressive recovery exists alongside a rapidly growing affluent middle class with increasing disposable income. The report adds that the Southeast Asian online travel sector is expected to reach USD 43 billion by 2025, reflecting a CAGR close to 40 percent from 2021 levels.
In the midst of rapidly growing digitalization, digital and physical infrastructure is still uneven in Indonesia. How will Traveloka take advantage of this opportunity to boost digital equity and digital economic growth in the country’s tier-2 and tier 3 cities?
As Southeast Asia’s leading travel platform, Traveloka has been supporting the digitalization of the country’s tier-2 and tier-3 cities. For example, we continue to support Indonesia’s ‘super priority’ destinations by empowering the digitalization of consumers, business partners and local businesses to further stimulate demand in these regions.
Over the years, we have actively collaborated with the Ministry of Tourism and Creative Economy to support the Wonderful Indonesia digital campaign. This includes promoting lesser known and ‘super priority’ destinations through social media engagement. Moreover, we highlight these destinations through our in-app features by sharing listicles that uncover the best attractions in those areas.
In addition to boosting the digital equity in Indonesia’s tier-2 and tier-3 cities, Traveloka has trained 1,000 participants in Indonesia under the Travedu Fest program. This is part of our efforts to create a more sustainable tourism industry by contributing to the development of digital and financial literacy within the sector. The participants ranged from areas like accommodation, transportation, F&B, recreation, and SMEs.
At Traveloka, we also play a part in improving the access of Indonesians to financial services. Traveloka PayLater is a powerful enabler in bridging the gap in access to credit and improving the way our consumers manage their finances.
Startups carry over impactful technology innovations for the digital economy and collaboration becomes an important element in it. How does Traveloka collaborate to boost the growth of a sustainable digital ecosystem?
At Traveloka, creating impactful and tech-driven innovations has always been in our DNA since the beginning, and there is no denying that strategic collaborations enable us to make technology more accessible and understand our consumers, partners, and relevant stakeholders better.
With unparalleled convenience and access, leading travel platforms like Traveloka have become more relevant and an even more indispensable part of the industry. Traveloka’s leadership in the market enables us to support the digital economy and create more value for the entire travel ecosystem.
Collaborations are key to realizing this goal. Our focused investments into creating an accessible and convenient digital platform means that our suppliers are able to use this to their advantage and grow alongside us as we embark on digitizing the travel industry further. The fragmented and vast inventory landscape, particularly in the hospitality sector – where we have 1.8 million
partners across 100 countries – means that for many small and medium-sized business partners, listing their products on Traveloka has become the primary pathway to digitization.
Traveloka has also continuously collaborated with governments and the public sector across our operating markets as we continue to advocate for further innovation and adoption in the digital travel space. The pandemic was once again a catalyst for deeper collaboration, as both parties were mutually focused on supporting the industry through the softer demand and physical restrictions over the past few years. Some examples include:
- Southeast Asia: Traveloka entered into a partnership with the Global Sustainable Tourism Council (GSTC), with whom we launched a series of training sessions on sustainable tourism in Southeast Asia for our hotel partners. This partnership also enabled us to promote sustainable hotels on our platform. These initiatives, along with other sustainability programs (e.g. climate neutral checkout, carbon neutrality project, waste management program, female mentorship program, digital inclusion programs etc.) are just the beginning of Traveloka’s effort in pushing the industry towards a more sustainable one in the long run.
- Indonesia: Traveloka took leadership roles in the government’s G20 agenda under the Ministry of Tourism and Creative Economy and the Ministry of Communications and Informatics. At the recent G20 summit in Bali, Traveloka played a crucial role as the industry task force coordinator alongside other technology giants.
- Singapore: Traveloka is an official partner of the Singapore Tourism Board. We were instrumental in the launch of the SingapoRediscover Vouchers program, which provided people with incentives to experience the various accommodations and attractions Singapore has to offer.
- Malaysia: In collaboration with the Malaysia Healthcare Travel Council (MHTC) and the Malaysian Medical Association (MAA), Traveloka launched the Medical Heroes Appreciation Campaign in 2020. This campaign offered exclusive discounts to medical workers and medical institutions via our Buy Now Stay Later programme across 250 local hotel partners.
- Thailand: Traveloka partnered with the Tourism Authority of Thailand in the “We Travel Together” campaign for domestic tourism.
- Vietnam: Traveloka entered a strategic partnership with VNAT (Vietnam National Administration of Tourism) as a commitment to accelerate digital transformation and support the revival of the national tourism sector.
Traveling activities have gradually increased after mobilization restrictions were lifted, however inflation and economic uncertainty are following behind. What is Traveloka’s strategy in overcoming that situation?
Traveloka is cautiously optimistic that we will see complete post-pandemic recovery by 2024. As travel recovers, services that complement travel – such as local and financial services – will become even more important.
We are aware that the macroeconomic backdrop is challenging. While we believe that resurgent post-pandemic travel demand will continue to drive growth in the sector, we understand that many of our consumers and business partners may be affected by the aforementioned macroeconomic conditions. Traveloka continues to support our partners through regular promotional activities and marketing of their products, while also working with them to attract consumers relevant to their target market. On the flipside, we also provide our consumers with a wide array of products and payment options to fit any budget, desire, or aspiration.
Traveloka remains cautiously optimistic that the industry will continue to grow strongly even in the face of these headwinds. Our resilience and steadfast support of partners during the pandemic will continue amid the present macroeconomic conditions, and we remain committed to ensuring that our stakeholders have a positive growth trajectory.
Traveloka just recently closed Eats and Send services as part of its business strategies and company’s prioritization. What are the innovations that will be developed to increase business efficiency in the future, especially during the unprecedented times?
We discontinued Traveloka Eats and Send as part of our business strategy and prioritization. With the return of travel, we are excited about the future.
Right now we are focused on anticipating our users’ needs and constantly adapting our platform and suite of products to meet them. With borders reopened, pent-up demand for domestic and, increasingly, international travel, is driving demand for not only a comprehensive and competitive selection of travel products, but also its complementary services.
Resiliency depends on the ability to adapt amidst various conditions, even when disruptions emerge. What kind of business model and digital talent is required to open the new digital economy’s potential?
Traveloka is Southeast Asia’s leading travel platform, where our mission is to continuously fulfill the travel aspirations of our users and help our partners thrive in any environment. We began our journey 10 years ago to solve the central problem of simplifying travel, and have thus far adapted and grown through various macroeconomic and industry conditions to reach where we are today. Even amid the COVID-19 challenges, Traveloka continued to innovate and remained resilient by creating relevant products and channels, such as using Livestreams, further gamification, and establishing clean partner recommendations.
Most important of all, companies must find a business model that is highly scalable and sustainable in the long run in order to unlock the potential of the new digital economy. Financial prudence and execution focus continue to be crucial, especially in managing disruptive businesses.
Digital competitiveness in Indonesia continues to show a positive trend. According to the 2022 East Venture Digital Competitiveness Index (EV-DCI), Indonesia scored 35.2, an increase compared to the previous year of 32.1 (2021), and the year before of 27.9 (2020). The rise of Indonesia’s digital competitiveness shows an enormous opportunity to unlock the country’s digital economy potential through its talents.
Traveloka designs its human resource practices based on three foundational pillars; People, Purpose and Perks. To realize all pillars, Traveloka has provided various facilities with the objective of becoming an employer of choice that provides a healthy and productive working environment.
Traveloka is also seeing more T-shaped talents – those who have extensive knowledge in specific areas, but are also expanding their capacities in other domains. They are characterized as highly adaptive when it comes to today’s dynamic technology development.
We routinely provide a series of capacity training to improve our talents’ skills and knowledge, and to ensure they have the relevant expertise on the latest technologies. Internally, we have Traveloka Academy, which focuses on establishing a standard of structure and mechanisms for talents to improve their capacities and advance their careers across sectors including Data, Engineering, Products, and Design with certified training.
Externally, Traveloka is consistently collaborating with partners such as government institutions and universities to support the development of our local talents. Some partnerships include Mitra 5.0 with Monash University, the Google Bangkit program, and Kampus Merdeka with the Ministry of Education, Culture, Research and Technology.
The agenda for inclusive digital economic growth is also marked by alignment with SDGs through the implementation of ESG, how is it implemented at Traveloka and what are the challenges faced?
Looking ahead, perhaps an urgent area of change, growth and development that the region must work on is to make travel more sustainable, and to ultimately embrace sustainability in everything we do.
Traveloka is committed to contributing to the growth of an inclusive digital economy by developing and implementing programs that aim to raise awareness and build the capacity of our communities or ecosystem. Some of our notable efforts include:
- Mitra 5.0 program partnership with Monash University that aims to improve the knowledge and skills of university lecturers on data science, design thinking and project management
- Bangkit program in partnership with Google to develop cloud computing curriculum for university students
- Kampus Merdeka program to nurture new digital talents to meet the increasing demand in the digital technology workforce
In addition to our digital inclusion programs, we launched two new initiatives in alignment with SDG. In 2022, we marked our partnership with the Global Sustainable Tourism Council (GSTC) by launching a series of training sessions on sustainable tourism in Southeast Asia for our hotel partners to level the understanding and awareness of sustainable tourism among hoteliers in Southeast Asia.
We launched the #PahlawanPohon program, through which we planted 50,000 mangrove seedlings in Bali and Nusa Tenggara. It is aligned with the government’s long-term strategy of achieving climate resilience and low carbon emissions by 2050.
Through these initiatives, Traveloka’s overall efforts are in alignment with the United Nations’s SDG, encompassing quality education, gender equality, decent work and economic growth, no poverty, reduced inequality, sustainable cities and communities, and climate action.
The protection of consumer rights is one of the supporting instruments for the development of the digital economy. How do you see the Personal Data Protection Regulation impacting the digital ecosystem development?
As a technology company, Traveloka’s top priority has always been to respect the data and privacy of our users. We are committed to complying with data protection laws and regulations in managing the data we are trusted with in all jurisdictions in which we operate.
Download the EV-DCI 2023 here.