Indonesia-based Emtek Group, which was founded in 1983 as a provider of personal computer service, has evolved into a modern, integrated group of companies with three main business divisions: media, telecom and IT solutions, and connectivity.
The group also owns and operates several internet properties, including DANA (one of the most-used digital wallets with over 40 million members) and Bukalapak (an e-commerce marketplace with almost 7 million mom-and-pop stores).
Emtek is participating in Enterprise Singapore’s inaugural Southeast Asian Open Innovation Challenge (OIC), which brings together some of the region’s largest conglomerates to collaborate with innovative startups, scaleups and SMEs.
e27 caught up with Emtek’s Senior Vice President (Business Development) Andya Daniswara to find out more about the group’s objectives at OIC and its various corporate innovation initiatives in Indonesia.
Emtek is a conglomerate with multiple business interests and units, and is capable of developing own products and solutions to support its units. Why does the group still require to partner and work with startups to support its existing businesses?
In the technology sector, speed to market is very crucial. While organic product/business development is always ideal, time is required to support the development and understand the various stress points in different operating contexts.
If we are able to fast-forward products/services that are not core to the business via partnerships, then this will allow the organic team, including management’s bandwidth, to focus more on the development of core products.
It is widely perceived that corporates are often resistant to change and are unwilling to break the status-quo. How true is this when it comes to Southeast Asia’s conglomerates? Does Emtek foster a culture of innovation?
We would like to believe that we are one of the frontrunners in Indonesia’s digital transformation, being one of the first movers and leading players in digital entertainment, commerce and payment.
As most of SEA’s conglomerates are currently undergoing transitions between generations, we see more and more are embracing digital disruptions.
Emtek routinely holds forums/workshops for the group’s executives across the subsidiaries to brainstorm visions and roadmaps. These sessions align each of the executives on the state of progress or achievements happening amongst the subsidiaries and current or future capabilities that may open up further collaboration opportunities. These workshops typically last several days, with clear action plan and ownership from executives-in-charge.
Why does Emtek believe that it is one of the frontrunners in Indonesia’s digital transformation? Can you share some examples for the digital initiatives it has taken over its many years of existence?
Emtek was one of the first Indonesian business groups that built a presence across various internet verticals and established a digital ecosystem in Indonesia.
Now in its digital ecosystem, the group operates Vidio.com (the largest local video OTT platform with 60 million MAU), Kapanlagi Youniverse (group of news/content portals that serve over 1.3 billion article page views per month), Bukalapak (provides digital and supply chain solutions to 7 million small shops and agents across Indonesia), and DANA (digital wallet that has amassed 55 million registered users), among others.
How does Emtek define corporate innovation? Is it about inculcating and fostering innovation among its employees? Or is it about partnering with startups and working with them for a long term? Or is it much beyond that?
We continuously highlight corporate achievements and innovations from any of our subsidiaries to all executives within the group. This fosters a spirit of competition in innovation and most importantly, as these innovations are socialised and embraced by members of the group, they often result in further derivative innovations.
Other than organic means, innovations are also often sourced through strategic acquisition/investments to bring about a new technology capability to the group, enabling more innovation opportunities.
How will you work with your innovation partners, startups and entrepreneurs? How mutually beneficial are these partnerships? Will you provide funding/make strategic investment/look to acquire these startups later?
Startups that participate in the Open Innovation Challenges (OIC) will have the benefit of having an implementation case in Emtek’s digital assets, which may also scale their business volumes. This relationship may potentially result in strategic investment in the startup, if the products/services delivered are able to demonstrate values synergistic to the group’s overall ecosystem.
Can you share more details about the innovation partners that you are looking for at OIC? What are you looking for in them? Don’t you think it is better to source Indonesian partners given the proximity, culture, language etc.? What role can Enterprise SG play here?
Emtek is keen to explore talented and aspirational founders who have strong belief in and commitment to their products. As the recent pandemic hit, teams and workflows are becoming more digital and borderless than ever.
Also, that price disparity of engineering talents are narrowing across ASEAN markets, which allows us to explore regionally for exceptional talents, obviously for key positions that do not require much localisation or external stakeholder interactions.
Do you think the Indonesia government is doing enough to encourage corporate innovation? What are the solid initiatives taken by the government in this regard?
In my view, technology innovation has been at the forefront of government’s agenda. Though Indonesia is constrained by fiscal limitation in general, the government has worked quickly to facilitate and regulate digital innovation happening in the country.
Key initiatives include loosening the investment-negative list related to digital business, R&D tax incentives, and quickly framing regulatory framework to facilitate digital payment, P2P licenses and soon digital banking.
Corporate venture capital (CVC) plays a vital role in fostering innovation which in turn bolster the startup ecosystem. However, Asia seems to be lagging behind the West in terms of CVC. What are the reasons for this lag? How can Asia overcome the barriers, if any?
I am not so familiar with Asian markets outside of Indonesia, but I will comment that numerous Indonesian business conglomerates participate in the startup ecosystem through CVC or other initiatives. Among them are Djarum, Sinarmas, Lippo, Telkom, Kompas, and Triputra, besides Emtek.
Internet startups have been probably regarded as typically a cash-burning or unsustainable business model that consume intensive capital, in favour of well-capitalised players from the West.
Typically, we see most Asian CVCs are active in the early/mid phases of the startup, and thereafter the investment is regarded as a hedge for the future.
How important is CVC for Indonesia’s ecosystem? Does Emtek already run a CVC or does it have plans to launch one to back local startups?
Indonesian business conglomerates are very influential in shaping the direction of the country’s economy. Thus, its business network, reputation and regulatory knowledge are very valuable to any business startup.
Emtek conducts its technology investments via subsidiaries consolidated to its public listed entity. This is done in the spirit of transparency to all shareholders of Emtek.
How crucial is ‘intrapreneurship’ for the corporate world? Does Emtek foster an intrapreneurship culture? Can you share details?
Intrapreneurship is a very favourable concept where key management of a company proactively seeks business growth opportunities, while being prudent in maintaining costs. Management in the group are often incentivised in form of bonus or share ownership plans, based on business target achievements.
What’s more effective as well is that the group facilitates all-year and real-time collaboration forums for executives within the group to connect and identify collaboration opportunities.
Does the group also look to startup partners from the other parts of the world (from outside of the OIC network) as well?
We are open to explore cooperation with great startups from any regions or channels. In the past, we have explored and worked on business collaboration with startups from China, India and the US.
Bukalapak and Dana are participating in Enterprise Singapore’s inaugural Southeast Asian Open Innovation Challenge (seaoic.com). To find out more about the range of open innovation challenges in Singapore, visit openinnovationnetwork.gov.sg.
Image Credit: Emtek