Exploring Indonesia’s Evolving Tech Scene: The Emergence of Vertical B2B Innovations

Adi Sudewa
4 min readFeb 4, 2023

The Indonesian tech landscape continues evolving even when B2C-focused sectors such as e-commerce, ride-hailing, edtech, and travel apps facing difficulties due to the global economic slowdown, a shift towards offline activities post-pandemic, and reduced funding for growth. However, new opportunities are emerging in the dozens of untapped B2B sectors ready to be transformed by technology.

With 77% of the country having internet access (as of 2022) and corporate and SME decision makers being exposed to seamless digital experiences from consumer apps, the timing for B2B is ideal. However, the path to success in B2B is not without its challenges. Adopting a “horizontal approach” and targeting all B2B sectors may work for startups offering generic solutions such as accounting, legal, or HR services. However, for most other industries, a customized “vertical approach” tailored to each sector is crucial for success. This is because each B2B sector has its own unique challenges, needs, and dynamics, and a one-size-fits-all approach may not be effective. Each vertical is complex, with entrenched manual processes, intricate regulations, limited access to financial services, and a unique mix of formal and informal players vying for dominance.

To overcome these hurdles, successful B2B startups and investors need a unique blend of skills, including an in-depth understanding of industry pain points, first principles thinking, a combination of tech and industry expertise, and most importantly, patience. A strong team with a deep understanding of the industry, (preferably) personal pain points, an ability to work with traditional players across all parts of the supply chain, and to engage regulators is essential.

Indonesian B2B tech startups have been focusing on these sectors for half a decade. The most immediately attractive sector, due to its sheer size, is the FMCG sector, with startups at various stages seeking to revolutionize the operations of more than 3 million local warungs. Due to the relatively longer vintage of the startups here, it has seen pockets of success stories in the form of rapid GMV growths and customer acquisitions, but it has also experienced hard pivots, closures, and painful M&As.

Agriculture is another hot sector, with existing tech players pivoting from B2C to B2B and new entrants tactfully starting by digitalizing agricultural input producers and retailers before reaching out to farmers and consumers. Within the broader agriculture sector, the fishery sector is seeing major progress, with rapidly growing startups like eFishery and Aruna, while the poultry sector is represented by Pitik and Chickin. Although the results so far have been mixed, both successes and failures provide important insights into the strengths and weaknesses of the sectors, offering opportunities for improvement.

Other sectors, such as construction, automotive, F&B, and pharmaceutical supply chains, are also starting to attract B2B startups. Practically any sector that is at least USD 10 bn in market size, fragmented, and inefficient presents an opportunity for disruption and there are dozens of such sectors in Indonesia.

The impact of these innovations on the Indonesian economy is substantial, including a more efficient supply chain, reduced waste, and a smaller carbon footprint. In the pharmaceutical sector, for example, a better distribution channel can improve access to affordable, life-saving medicines, contributing to a more productive society. The same can be said for a better construction sector, which can bring more affordable homes to the masses.

Will the startups in this B2B space suffer the stagnation and continuous losses currently being faced by their B2C counterparts at scale? While it’s impossible to predict the future with certainty, several factors suggest that this outcome is unlikely to occur.

1) Competition in B2B verticals is typically lower, as each market appears smaller in comparison to the overall consumer space.

2) B2B customers are more cautious and require a combination of benefits before adopting digital solutions. Initial growth may be slower, but they are likely to stick with the first provider that succeeds in the sector.

3) The B2B sectors are more resilient, not heavily influenced by economic downturns, changing customer behaviors, or incrementally better technologies. This article provides a great analysis about how investments in B2B in the US has outperformed B2C in term of RoIC (Return on Invested Capital) by more than 2.5x so far.

As in the B2C space, B2B startups should also cultivate long-term sustainable advantages like branding, intellectual properties, network effects, and other kind of ‘moats’ specifically available to them in their context. The approach of blitzscaling through offering excessive discounts and incentives by B2C companies should not be blindly followed by B2B companies. This approach may be effective in attracting a large number of customers quickly in the consumer space, but it may not be suitable for the complex and relationship-driven nature of B2B sales. In order to succeed in B2B, it is important to take a strategic and tailored approach that takes into consideration the unique challenges and opportunities of the B2B market.

In conclusion, the future of Indonesia’s tech ecosystem is bright with B2B startups leading the way in various verticals. Get ready to embark on an exciting journey into the uncharted waters of B2B innovation and experience the transformative power it can bring to the Indonesian economy.

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Adi Sudewa

Venture Builder. In Medium to share perspectives on how industries are being transformed by digital technologies.