Tracing the Direction of the Salim Group to Dominate the Digital World

Talking about how big the potential of the digital economy in Indonesia is as a the next big thing, there have been a lot of reference data milling about trying to prove it. All parties are aware, including the Salim Group, one of the largest conglomerates in Indonesia.

The name of the Salim Group is quite famous through its various subsidiaries, Indofood Sukses Makmur, which is a producer of instant noodles under the trademark name Indomie. For the retail sector, the Salim Group owns Indomaret with a total of approx 14 thousand outlets spread throughout Indonesia.

Meanwhile, in the automotive sector, there is Indomobil with various subsidiaries operating as sole agents for trademark holders (ATPM) and multi-finance companies to support their business.

What are the steps taken by the Salim Group to participate in the digital world ecosystem? The Salim Group prefers an initial strategy of establishing joint ventures with foreign partners and investing directly through its subsidiaries. Seen from the action when involved in investment at Rocket Internet for the development of online and mobile payment solutions in developing countries in 2014.

The Salim Group entered Rocket Internet through a Philippines-based telco subsidiary, the Philippine Long Distance Telephone Company (PLDT). At that time, PLDT injected 333 million Euros of investment funds or the equivalent of a 10% stake in Rocket Internet. Although currently his investment in Rocket Internet has not shown results, in fact Getting lower Due to Rocket Internet's unreliable stock performance, the Salim Group seems ready to dive deeper into the digital world.

The track record of the Salim Group began to tighten when it announced its partnerships with various Japanese companies to strengthen the e-commerce service ecosystem that it was pioneering. One of them is the partnership to establish a joint venture between Indomobil and Seino Holdings in 2015.

In interview with Nikkei, Chairman and CEO of the Salim Group, Anthoni Salim, said that his party is ready to compete in the Indonesian e-commerce world, which has just begun. According to him, if you want to be successful, logistics, transportation management, and IT infrastructure must be very strong.

This is the reason behind the partnership with Seino. He considered Seino to have a lot of engineers and experience working with IT companies.

"A lot of Japanese companies have good products, good processes, and most importantly the experience. On the other hand, in a developing country like ASEAN, with a population of around 600 million, there is great potential. This is very good for bridging [the two]. operates in more than 40 countries and we want to grow in the regional arena to maintain balance," said Anthoni.

After establishing a joint venture subsidiary in the automotive sector, the Salim Group announced another joint venture through its subsidiary PT Indomarco Prismatama, the Indomaret franchise operator, with Lotte to establish e-commerce platforms iLotte (Indo Lotte Makmur).

Later, the joint e-commerce service will focus on providing cosmetic goods for women from the South Korean brand as well as connecting it with Lotte outlets.

The next joint venture established is PT Indoliquid Technology Sukses, the result of a partnership with Liquid Inc Japan to develop biometric technology. The goal that this partnership aims to achieve is that the Salim Group can provide an authentication platform for flexible and efficient payments throughout Indonesia.

Salim Group's big breakthrough through the acquisition of Bank Ina Perdana

The financial sector is the main pillar that covers all business lines because that is where the real business is located. Such a business does not mean much if a conglomerate does not have a subsidiary engaged in the financial sector.

The tactics used by the Salim Group by establishing various joint ventures from various sectors as part of preparing themselves for the digital world, are increasingly complete with acquisition announcement by the Salim Group against the mini-asset bank Bank Ina Perdana earlier this year.

The Salim Group entered Bank Ina Perdana via affiliated company, including Indolife, Ocean Blue, and Lifestyle.

Previously, the Salim Group had a subsidiary in financial services, namely BCA. However, they had to be released when Indonesia experienced the monetary crisis in 1998.

Because this announcement is still new, there is not much that can be explored further. However, there is a big picture that can be seen from this action, namely that the Salim Group has big ambitions to make a "second BCA".

They want to transform cashless payments by developing services internet banking, mobile banking, e-money, and others. Next, they want to connect it to the Indomaret outlet network, which has now become a digital transaction payment point.

Touch the startup world with Block71

The Salim Group's approach in its efforts to shape the digital world ecosystem is now starting to shift to the startup realm through the announcement of its involvement in the community center blockxnumx in Jakarta with NUS Enterprise.

Salim Group Executive Director Axton Salim said this initiative was carried out because his party wanted to support entrepreneurs as well as encourage new developments in Indonesia. With the network assistance facility and group experience, it is hoped that it will encourage the entry of startups and innovations into the local market and benefit the wider community.

Axton, like Martin Hartono, John Riady, or Alvin Sariaatmadja, became the successor to a family conglomerate who wanted to try their luck in the digital world. According to Axton, Block71 was chosen as a partner because it already has a global startup network that can help push Indonesian startups to go global.

"If for startup In Indonesia, we see a lot of new ideas. So we are working with NUS Enterprise so that we can bring the Indonesian market to Singapore, China and San Francisco," said Axton, as quoted from Dataword.

Although a bit late, compared to other conglomerates, the Salim Group's movements were quite agile. Within three years, the Salim Group has had a number of additional subsidiaries thanks to affiliations with overseas technology companies.

In the future, large conglomerate groups will rely on startups to innovate in the technology sector.

Just like EMTEK starting to complete the pieces The roadmap technology with BBM as an adhesive, the Salim Group which has long experience in the retail world considers value chain supporting the e-commerce industry is important. One of them is its investment in logistics services Popbox who developed smart lockers as a place of storage and delivery of goods.

"I think opportunity many, honest opportunity many. That's why we started investing,"said Axton, to Katadata, about the opportunities and steps the Salim Group has taken to enter the digital world of Indonesia.