City Focus: Jakarta
Jakarta is not only the centre for Indonesia’s sizeable state-owned enterprises, but serves as an incubator for many of the company’s most exciting startups and small businesses. Let's take a closer look...
Jakarta, the capital of Indonesia, is situated on the northwest coast of Java, the most populous island in the world and home to around 57% of Indonesia’s total population. The city is not only the largest in Indonesia, but Southeast Asia as a whole.
The city’s a metro area is called Jabodetabek, which consists of four other cities. The name is derived from the first two letters of each of the cities involved: Jakarta, Bogor, Depok, Tangerang and Bekasi. While Jakarta itself has a population of over 10mn, that figure jumps to more than 30.21mn when the entire metro area is included. This makes the Jabodetabek the second largest urban area in the world, after Tokoyo.
A global economic powerhouse
The Globalization and World Cities Research Network recognised Jakarta as an Alpha Global City in its 2016 report. The city's growth is ranked fourth out of 200 of the world's largest cities. It experienced more rapid growth than other Asian cities like Bangkok, Kuala Lumpur and Bejing.
Big business in Jakarta
According to Forbes’s 2017 ‘Global 2000’ list, six companies headquartered in Jakarta made the cut, including four finance-oriented firms - state-owned lenders, Bank Negara Indonesia (BNI), Bank Mandiri and Bank Rakyat Indonesia - as well as Bank Central Asia, a private lender. Cigarette manufacturer Gudang Garam and state-owned telecommunications business PT Telkom round out the six companies.
The nominal GDP of Jakarta was about $483.8bn as of 2016. This figure represents about 17.5% of the entire country's GDP. The city's economy is heavily reliant on manufacturing, trading, service, banking and financial sectors. Notable companies headquartered in Jakarta include:
A state-owned gas and oil company, in 2012 PT Pertamina became the first company in Indonesia to become listed as a Fortune 500 company, and has maintained a position as a Fortune Global 500 business ever since. The company reported a revenue of $36.5bn in 2016.
This state-owned corporation specialises in electricity generation and distribution. It was featured on the Fortune Global 500 list in both 2014 and 2015. It boasted an annual revenue of more than $3bn in 2016.
A real estate development company, the Agung Podomoro Group has undertaken projects in a number of sectors that span commercial and residential. It posted revenues of more than $550mn in 2016.
Jakarta is a city that experienced phenomenal growth in a relatively short amount of time. As such, its transportation infrastructure has struggled to catch up to the needs of the population. The development of its network of road systems was primarily focused on private vehicles. Based on 2015 figures, around 1.4mn people regularly commute to the centre of Jakarta from the city's outskirts. Of those, about 58% use motorcycles while fewer than 13% use cars. Less than a third of commuters used public transportation. At present, the city is experiencing nearly double-digit annual growth in the number of motorised vehicles that are being acquired by commuters.
Businesses of every size thrive in Jakarta
Though numerous major conglomerates and most of Indonesia’s state-owned businesses have their corporate offices in Jakarta, the city is also an incubator for startups, small and mid-sized businesses of all sorts. Industries as diverse as manufacturing, communication, construction, transportation and hospitality have experienced significant growth in recent years. Let’s take a look at some prime examples.
Blibli is an e-commerce startup partially owned by PT Global Digital Niaga and Bank Central Asia, the country's largest bank. The company sets itself apart in the crowded e-commerce sector by providing a personalised shopping experience and access to expert teams that can deliver shopping information. The company was founded in 2010 and is known as Indonesia’s fist online shopping mall.
Entrepreneurs interested in starting a small business in Jakarta can likely benefit from Startup Grind. This global startup community has its Indonesian headquarters in Jakarta, and was developed to inspire, connect and educate entrepreneurs through networking events, fireside chats and more. The group is separated into “chapters”, and the Jakarta Chapter is led by Frans Yuwono, CEO of the Asia Commerce Network.
Alodokter is an internet-based health company with about 130 employees. Launched in 2016, the Alodokter app is already used by more than 12mn people every month. More than 250,000 questions from users are fielded by doctors each month, making Alodokter Southeast Asia's number one digital health company.