Entering a new market can be a complex and daunting task, especially in a dynamic and rapidly evolving region like Southeast Asia. However, with the right market research, businesses can navigate these challenges and make informed decisions. In this article, we will explore how market research can aid your entry into the Indonesian market, using a case study of a market study conducted by ABP for the lending sector in Indonesia.

Case Study: Market Study on Indonesia’s Lending Sector

• About the Project

ABP conducted an in-depth market study on Indonesia’s lending sector for a leading FinTech company in India, which provides a lending technology platform for banks and other FinTechs. This project highlights the critical role of market research in understanding a new market, identifying opportunities, and mitigating risks.

• Methodology

The assessment was carried out by a team of market researchers at ABP, in collaboration with banking experts from Indonesia. The study was based on a combination of primary and secondary research, involving direct communication with key stakeholders in the sector. This comprehensive approach ensured that the data collected was both accurate and relevant.

Key Topics Covered in the Study

• Current Lending Institutions:

Identification and analysis of the existing lending institutions in Indonesia, including their market share, operational strategies, and customer bases.

• Current Processes by Banks & FinTech’s:

Examination of the processes employed by banks and FinTech’s in lending, including their application, approval, and disbursement procedures.

• Key Solutions in the Market:

Evaluation of the available solutions for assessing the identification, ability, and intent of consumers, which are critical for risk management in lending.

• Competition Mapping and Market Estimation:

Detailed mapping of the competitive landscape and estimation of the market size, which provided insights into potential market share and growth opportunities.

• Important challenges we discovered that Fintech faced:

The availability of credit scores in the Indonesian market was limited to the banked population, which constitutes only a small fraction of the total population.

• Alternative Verification Methods:

Investigation of alternative methods for consumer verification, which can enhance the efficiency and reliability of the lending process.

• Expanding Banking Services:

Fintech aimed to capitalize on the banking and credit needs of a broader population base while mitigating the risks for financial institutions, primarily banks.

• Regulations Set by the Government:

Analysis of the regulatory framework governing the lending sector, including any recent changes and their implications for new entrants.

Outcome

Based on the recommendations and market sizing provided by ABP, the client successfully entered the Indonesian market in 2023. The insights gained from the market study enabled the client to tailor their strategies to the local market conditions, identify key opportunities, and address potential challenges effectively.

Applying Market Research to Enter the Indonesian Market

Just as the market study helped our client enter the Indonesian market, a similar approach can be applied to your business entry into Indonesia. Here’s how market research can facilitate this process:

• Understanding the Local Market:

Conducting a comprehensive analysis of Indonesia’s financial sector, including the current players, market dynamics, and consumer behavior, can provide valuable insights for your entry strategy.

• Regulatory Compliance:

Navigating the regulatory landscape in Indonesia is crucial. Market research can help identify the relevant regulations and compliance requirements, ensuring a smooth market entry.

• Identifying Opportunities:

By mapping the competition and estimating the market size, businesses can identify gaps and opportunities in the market that align with their offerings.

• Adapting to Local Needs:

Understanding the unique needs and preferences of Indonesian consumers can help tailor your products or services to better meet local demands.

• Risk Mitigation:

Identifying potential risks and challenges early on through thorough market research can help develop strategies to mitigate these risks, ensuring a more secure entry into the market.

“Entering a new market can be a complex and daunting task, especially in a dynamic and rapidly evolving region like Southeast Asia. However, with the right market research, businesses can navigate these challenges and make informed decisions,” said Tripudjo Soemarko, a Advisor – Government Relations of our Indonesian subsidiary, Indonesia Business Partners.

Market research is an indispensable tool for any business looking to enter a new market, especially in regions as diverse and dynamic as Southeast Asia. By leveraging the insights gained from comprehensive market studies, businesses can make informed decisions, adapt to local conditions, and achieve successful market entry. The case study of ABP’s market study on Indonesia’s lending sector illustrates the effectiveness of this approach and serves as a blueprint for entering the Indonesian market.