India vs Indonesia: How VCs look at their respective tech sectors

Indonesia's biggest worry is a scarcity of talent compared with India, reports Tech in Asia

India and Indonesia’s tech ecosystems have a lot in common. A popular thesis is that Indonesia lags five years behind and that we’ll see it follow a similar tech development trajectory.

Dirk van Quaquebeke, partner at venture capital firm Beenext, had an on-stage chat with Pieter Kemps, partner at Sequoia Capital, and Amit Lakhotia, who recently joined Indonesia’s Tokopedia via India’s Paytm, at Tech in Asia Jakarta 2016.

The three came up with some unique ways to approach the Indonesia vs India question. 

The power of Indomaret

Indonesia might lag behind India in things like the amount of venture capital flowing in, but it’s ahead in organised retail, Amit says. “Places like Indomaret and Alfamart do not exist in India.”

Geography and logistics

India, with its many mega cities, sees a broader geographic distribution of wealth. In Indonesia, wealth is concentrated in Jakarta and a few larger cities, mostly on the island of Java.

Spending power

Pieter says that the spending power of Indonesia's emerging middle class is higher than in India. 

Talent scarcity

Indonesia’s biggest worry is a scarcity of talent compared with India.

"The real difference began 20 years back when Infosys started and employed engineers. India has 10 million engineers – that didn’t happen here," says Amit.

Indonesia’s first wave is strong

Indonesia’s digital economy is just starting out, and it does not have the history of software development India has. But there’s one big advantage Indonesia can build on: people are already online all the time.

“The first wave [of tech entrepreneurs] in India had to educate people to come online. The only way to get them was ABCD: Astrology, Bollywood, Cricket, or Discounts,” Dirk jokes.  This is an excerpt from Tech in Asia. You can read the full article here