Indonesia 2.0The Adoption of Mobile & Internet

Andi S. BoedimanStrategic Innovation Consultantandisboediman@gmail.comwww.ideonomics.com

Ritual Creation

Mass Adoption

Habit Forming

Behaviour Change

Behaviour Introduction

InnovativeSolution

Innovation Adoption Lifecycle

morning ritual82% brush teeth74% take shower/bath74% have something to eat54% talk to family members53% males shave47% females put on makeup

Source: BBDO worldwide study

Ritual Creation for Consumer Market

The long way creation of ritual will commoditize innovation to become consumer market.

Mobile & Internet AdoptionMobile and Internet will become a ubiquitous infrastructure for communication, content distribution, community and commerce

voice & sms becomes commodity, drives pulsa become kind of “money”

the potential of value added services

online shopping

video streaming

online gaming

music downloading

social networking

chatting

emailing

browsing

D = 82%Rp 500 - 700 rb

C = 65%Rp 700 rb - 1.5 jt

A = 86%> Rp 2 jt

advertising model

subscription model

Mobile & Internet Adoption in Indonesia

innovator early adopter

early majority late majority laggards50 % 20 %20 %8 %2 %

mobile adoption

internet adoption

content distribution

commerce communication

payment platform

E = 86%< Rp 500 rb

B = 82%Rp 1.5 - 2 jt

mobile adoption

Warnet OfficeHome MobileSchool Hotspot

online shopping 7%

video streaming16%

online gaming17%

music downloading45%

social networking50%

chatting65%

emailing82%

communication

content

community

commerce

Internet Usage

Source: Synovate

browsing86%

key usage

Kaskus

Detik

Kompas Kapanlagi

information

Friendster Facebook

community

Ticket

Retail Bookgoods &

merchandising

Advertising as Business Model

Games

ClassifiedImages, Music

digital content

Ecommerce as Business Modelepayment

platform

US $10 million

Mobile Internet Adoption Case StudyLearning from iMode, a mobile internet ecosystem

• Low PC penetration in Japan• High charges for PSTN dial-up access in Japan

Internet Problem in Japan

Solution• Young women doesn’t really care about technology,

they care about connection and content.

• Connecting to Internet should as easy as making a call.

• Launched by DoCoMo in 1999• Within 3 years, it had over 35 M

subscribers and 40,000 iMode Web sites• Low fees: 300 Yen/month plus 2.4 Yen/

KB downloaded• It is an application environment for

subscribers for application providers-> On Device Portal

• Open its billing system • DoCoMo use a subset of HTML (cHTML)• Manufactured a new breed of application

friendly handsets.

iMode Facts

When you focus on the number of Internet users for private use, it is far from ’critical mass’ for major IP in Japan. However, if you count on all cellular phone users of DoCoMo, IP can easily reach economies of scale for its own service.

Cellular Phone User 47 million

Internet Useraround 17 millionPersonal PC User

3 - 4 million

Internet

Information Provider

Information Provider

DoCoMo User27 million

ISPPrivate LAN

DoCoMoGateway Server

iMode Adoption

iMode Adoption Strategy

Portal Link

Web access

Intranet

Intranet Packages

Java

IMT‐2000

Feb 1999 Fall1999 Fall 2000 Spring 2001

i-modelaunch

Success of iMode lead to smooth introduction of IMT-2000 which enable high speed access from mobile devices (64k-384k bps). They enhance iMode platform by introducing Intranet package solutions in 1999, then Java technology in 2000.

Homepage

Email

Groupware・Schedule Management ・Work flow Management

・Electronic Bulletin Board System・Electronic Conference

・File Sharing

・Video

・Game

・Music

・Agent function ・Mobile TV

・Interactive TV

・TV Telephone

・TV Conference

・Security function

Rich (Visual, High Speed)

Colored LCD

iMode & Content ApplicationContent/Application Case Study

Movie Navigator, Mobile Banking, Character Download

MENU1.Movie Guide2.Ranking3.Latest News

Latest Films1. Deep Impact2. Saving Ryan3. SHITSURAKUEN4. Kiseki no Umi5. Romeo & Juliet6. 0077. Mr. Bean

Choose 1 Choose 1 Choose 5

Romeo & Juliet1. Profile2. Story3. Special Features4. Theaters

Choose 1（charged）

2 Theaters Found in Your Area　1. Nihon Theater2. Cine-Chante

Choose 4NOW SHOWING(9/26～10/12)

YurakuchoNihon TheaterMarion Bldg. 11F11:00/1:40/4:20

7:00/9:10Adult　1,800YenStudent 1,500YenRsvd.　3,000YenChild. 1,000Yen1. PHONE TO!2. Return

PROFILEUSA/1996Director, Hes Laman/Film, Donald M. Mclevin/Actor, Leonard de Caprio

1.Return

Choose 1

STORYRemake of the Shakespeare`s work with modernspice.

1.Return

Choose 2

Call to the theater and

make a reservation

Choose 1 Choose 1

Content Example/Movie Navigator

Movie NavigatorWelcome to the Latest Road ShowInformation1. ENTER

DETAIL INFO.Guidance to this MovieInfo Charge $0.10 per view1. OK2. Return

<Account Selection>◎ Tokyo Brunch

Savings ***1234○ Yokohama Br. Checking ****234Check BalanceToday’s TransactionPast Transaction

<Sumitomo Bank>1.Mobile Banking2.Telephone Banking Center3.ATM Maps4.Service Info5.Sample6.Application Form Request7.Customer Support

Content Example Mobile Banking; Sumitomo Bank

<Service Menu>Balance CheckMoney TransferChange PINQuit

　MY MENU1. Weathernews2. ZAGAT Tokyo3. Nikkei News4. Sumitomo Bank

Mobile Banking1.Start2.Quit3.Help Desk(Tokyo)4.Help Desk(Osaka)5.My Menu

<Input ACCT# and First PIN>ACCT# ＊＊＊＊＊＊＊1st PIN ＊＊＊＊＊＊SubmitCancel

0354738111

Calling

<Balance>11/3 10:30#Account Balance Y123,456Back to MenuQuit

<Account Selection>◎ Tokyo Brunch

Savings ***1234○ Yokohama Br. Checking ****234Money TransferAcct TransferBack to Menu

<Registered Acct>○ Sumitomo Bank Osaka Brunch Savings ***4321 Paul Smith◎ CITIBANK

Tennoz Brunch Savings ****135Takeshi NatsunoTransfer Amount 1000000TransferBack to Menu

<Confirmation>FROM; Sumitomo Bank Tokyo Brunch Savings ***4321TO; CITIBANK Tennoz Brunch Savings ****135Takeshi NatsunoAmount Y100,000 Fee Y315→Input 2nd PIN 　　＊＊＊＊＊＊ConfirmCancel

<Order Completed>Executed 11/3Order # 1103-001 Back to MenuQuit

Balance Check

Money Transfer

Below

Case Study; Bandai Corporation

Chara-Pa! ServiceCharacter Delivery Web by Bandai Corporation

Simple GIF downloading can generate money !

• You can download GIF everyday by enrolling membership for 100 Yen/month.

• Acquired more than 450,000 subscribers at mid November.

Mobile & Internet Advertising AdoptionMobile and Internet advertising growth potential and understanding the consumer goods as the biggest potential for advertising

Mobile marketing in Global Perspective

Mobile Advertising market will grow from US$900M to US$1.1B by 2011

Source: Mobile - Jupiter Research 2005 and PC Internet - eMarketer, 2007

Cars800 million

Phones1.3 billion

Television1.5 billion

Credit Card1.4 billion

PC850 million

Internet1.1 billion

Mobile Phones

3.3 billion

(nov 2007)

Indonesia mobile advertising metrics

adMob serves ads for more than 6000 web sites and applications around the world. It stores and analyzes the data from every ad request, impression, and click and uses this to optimize ad matching in the network. This report is a snapshot of the data to provide insight into trends in the mobile ecosystem.

Source: Admob.com

Indonesia mobile advertising growth

Source: Admob.com

Mobile Web Drawing Diverse Advertisers

Most advertiser is still IT and lifestyle related, consumer goods not yet adopt mobile as advertising medium

eyeball loyal customers

purchaseconsideration favorabilityawareness loyalty

advertising to mass market

information/user review

consumer lead

purchase intent

marketing funnel

customer

eCommerce AdoptioneCommerce adoption shows variety degree of success depend on consumer ease of use and trust

Global eCommerce

• Total credit card from 20 banks: 9 million• The Big 4: Citibank, BCA, BNI and Mandiri.• Potential market growth: 20-30% per year.

Credit Card Adoption

• How many credit card do you have? Why?• Is credit card replacing money? Why?

A few question

The success of credit card is because it offers a credit/financing/discount solution, not only payment solution.

Yehey’s PayPlus+ has been servicing local merchants for about 3 years already but up to now, but there seems to be too little penetration amongst local merchants.Poor awareness in the general population and lack of infrastructure to support mobile commerce may hamper adoption of his innovative business models.In a survey conducted, there is still poor awareness in terms of people's attitude towards m-commerce. A lot didn't understand it despite the advertisements on television and in billboards.On the aspect of infrastructure, it is still difficult to "cash-in and cash-out" using micropayment.

Both SKT and KTF have mobile wallet offerings (SKT offers MONETA and KTF offers K-Merce). These services came out around December 2004. Neither of these services has taken off. There appears to be little or no marketing, and the press is silent on these services. You can still see an occasional dongle in a store, but you rarely if ever see anyone use them.

mCommerce Case Study

Todito.com the low- and middle-income Mexican market through ePAID. It provides a cash-based payment platform that supports e-commerce and remittance services. ePAID facilitates low-cost money transfers between workers in the United States and family in Mexico. By allowing people to ship goods to friends and family in Mexico, ePAID eliminates the need for hard cash transfers. For those who do wish to transfer cash, there are small, affordable fees. For their ePAID venture, eCatalystOne partnered with Mexican banks to ensure that their customers can withdraw cash funds from their ePAID accounts at ATMs.

Because ePAID is not credit-based, there is no risk involved for the company or the consumer. Opening an ePAID account does not require the divulgence of any financial information and. More importantly, consumers without access to credit can open accounts using cash.

ePaid Case Study

desirable hardware

ease of use content

common payment

internet/mobile

Apple Model

1

2 3

Online Purchase

Adoption is still low due to payment solution

innovator early adopter

early majority late majority laggards50 % 20 %20 %8 %2 %

Transition to eCommerce Adoption

Mobile Adoption

Mobile Internet Adoption

ePayment Adoption

eCommerce Adoption

Key Takeaway

Understand and apply the adoption cycle for creating a sustainable innovation in mobile and Internet ecosystem

Thank You

Andi S. BoedimanStrategic Innovation Consultantandisboediman@gmail.comwww.ideonomics.com