Man of the Hour Luhut B

JEFF BEZOS • CRP GROUP

OCTOBER 2018 • VOLUME 9 ISSUE 10

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MAN OF THE HOUR LUHUT B. PANJAITAN: RP 50,000 IMF-WORLD BANK MEETINGS IN BALI DEMONSTRATE RI’S REGIONAL LEADERSHIP

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OCTOBER 2018 FORBES INDONESIA | 3 Contents OCTOBER 2018

“THE MAIN OBJECTIVE OF HOSTING THE MEETINGS IS TO SHOWCASE INDONESIA AND ASIA AS REFORMED, RESILIENT, AND PROGRESSIVE ECONOMIES.” LUHUT B. PANJAITAN

10 | FACT & COMMENT // Steve Forbes ISSUE & IDEAS Time to terminate “Assisted Dying” 14 | UPDATES 22 | MAKE HASTE, NOT WASTE Unilever Indonesia Enters Chili Sauce Business and In Bali, an NGO and private businesses join forces to Gerard Inzerillo Appointed as CEO Diriyah Gate address the island’s dire trash problem. Development Authority BY MARELLA PUTRI 16 | UPDATES Mayapada Property Arm IPO and Salim Group invests in 24 | MONEY & MARKETS // Rainer Michael Preiss startups Indonesia and the Emerging Markets Crisis

18 | TOPICAL SUBJECTS // Taufik Darusman 25 | CEO WISDOM // Andrew Tani Evil Leaders Making Indonesia 4.0 19 | SUSTAINABLE DEVELOPMENT // Scott Younger ENTREPRENEURS Lombok – Further Quake Reminders 26 | SUCCESS INGREDIENTS Nirmal Rajaram made Cita Rasa Prima one of the fastest growing F&B companies in the country. COVER STORY BY ARDIAN WIBISONO

36 | MAN OF THE HOUR 30 | BUSINESS & ECONOMY // Victor Davis Coordinating Minister for Maritime Affairs Luhut B. Panjaitan The Inevitable Threats To F&B Companies Today is at the helm of the national committee that organizes the IMF-World Bank meetings in Bali. 31 | FOCUS ON EUROPE // EIBN BY TAUFIK DARUSMAN Corporate Sustainability Strategies and Governance

COVER PHOTOGRAPHS: IWAN STRATOCASTER FOR FORBES INDONESIA

4 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 5 Contents OCTOBER 2018

COMPANIES & PEOPLE

32 | SUITABLY BESPOKE Four generations on, Wong Hang Tailor rebrands itself and moves into high gear. BY ULISARI ESLITA

TECHNOLOGY

47 | INVESTMENT IDEAS // Teguh Hidayat Investment Opportunity in ‘Consumer Goods’ Stocks

48 | DEALING WITH RISKS Insurtech Pasarpolis offers insurance to all at a price cheaper than a cup of coffee. BY MARELLA PUTRI

50 | BREAKING HEARTS HeartFlow has raised $467 million for a test to detect heart disease. Problem: It might not make patients better off. BY ELLIE KINCAID

52 | WHERE E-CASH IS KING China’s fintech giants are consolidating their gains and using their capital heft. BY SARA HSU

54 | CRYPTO BOSS The mining billionaire no one has heard of. 26 BY JASMINE TENG

FEATURE STORY FORBES LIFE 56 | BEZOS UNBOUND America’s most innovative—and feared—business leader is coming off a three-year run that has made him the richest person of all 64 | AMERICA’S TOP COLLEGES time. Now he tells Forbes he’s only begun to grow. Corporate America, you’ve been warned. 70 | THE TOP-EARNING RAPPERS BY RANDALL LANE 71 | SCORE THE SKI WATCH, BOOT THE BORDEAUX Expert advice on luxe investments. 32 BY CHRISTIAN KREZNAR 72 | A SEDUCTIVE BENZ The Mercedes-AMG GT C is the most powerful yet liveable from the AMG GT line up BY YESSAR ROSENDAR

74 | REJUVENATING MOMENTUM Nissan’s Yutaka Sanada aims to double its market share in Indonesia. BY YESSAR ROSENDAR

76 | THE EYE

6 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 7 SIDELINES

PUBLISHER Jusuf Wanandi

EDITORIAL DEPARTMENT GROWING CONFIDENCE EDITOR-IN-CHIEF Taufik Darusman SENIOR EDITORS Ardian Wibisono, Ulisari Eslita, BY TAUFIK DARUSMAN Yessar Rosendar [email protected] WRITER Marella Putri SENIOR GRAPHIC DESIGNER Hidayat Abubakar GRAPHIC DESIGNER Dennis A. Pratama ot since the Non-Aligned Movement (NAM) summit in Jakarta, in PRODUCTION MANAGER Mudafid Riyanto VIDEOGRAPHER Wijayanto 1992, which was attended by heads of state from over 120 members, EXECUTIVE ASSISTANT Hanna Azuraa has Indonesia organized a behemoth international gathering on the CONTRIBUTING WRITER Aastha Saboo N scale of this month’s IMF-World Bank Annual Meetings in Bali (Oct. 8-14). INTERN Khansa A. Ryantono Coming on the heels of the much-acclaimed 18th Asian Games in August in Jakarta and Palembang, the Bali meetings define Indonesia’s growing BUSINESS DEPARTMENT EXECUTIVE DIRECTOR Tanti Jumiati confidence on the world stage. Confidence also figures high in Luhut B. Pan- DIRECTOR Ryan Wiranata jaitan, who as Chairman of the National Committee on the IMF-World Bank SENIOR EVENT & SALES MANAGER Bardan A. Sayid Annual Meetings, had pulled out all the stops to make it happen. ASST. MANAGER EVENTS & COMMUNICATIONS A former Red Berets commander and a retired four-star Army general, Rio Zikrizal EVENTS & SALES EXECUTIVE Melissa Tunggadjaja Luhut combined military experience, diplomatic skills (he was once am- MARKETING SUPPORT Josephine Hanna M. bassador to Singapore) and economic expertise (he is also a former trade CIRCULATION DIRECTOR Seli Widiati and industry minister) to organize the meetings – it will be attended by CIRCULATION MANAGER Habibie Hasanuddin over 16,000 delegates, investors, NGOs, academics and media representa- CIRCULATION EXECUTIVE Dahlia Komala Sari ACCOUNTING MANAGER Indrawati Sonjaya tives – in less than two years. ACCOUNTING SUPERVISOR Inge Stephanie While detractors question the wisdom of holding international meet- ACCOUNTING EXECUTIVES Tjhin Anna ings that cost billions of rupiahs of taxpayers’ money, the bottom line is ACCOUNTING STAFF Aldina Anggraini that all of that is well spent in terms of new infrastructure and job cre- Abdul Fachmi WEB PROGRAMMER ation for 32,000 people. Meanwhile, Bali’s economy is set to grow by 0.65% INTERN Dhiandra Liudianto, Sharana, Bianca Felizia within merely two weeks. As Luhut pointed out, high-profile investors such as Jack Ma and top ex- PT WAHANA MEDIATAMA PRESIDENT DIRECTOR Millie Stephanie Lukito ecutives of Black Rock and Facebook will also descend upon Bali. Over $40 VICE PRESIDENT DIRECTOR Dewi Victoria billion worth of projects are up for grabs by foreign investors, yet another PRESIDENT COMMISSIONER Jonathan Tahir testament that the Bali meetings are worth holding.

FORBES MEDIA LLC The meetings could not have happened at a better time as, in the words CHAIRMAN & EDITOR IN CHIEF Steve Forbes of Finance Minister Sri Mulyani Indrawati, “we are amidst a global economy CHIEF EXECUTIVE OFFICER Michael Federle that is undergoing huge changes.” CHIEF CONTENT OFFICER Randall Lane However, despite what seemed to be an endless stream of trials and trib- CEO/ASIA William Adamopoulos EDITOR, FORBES ASIA Tim Ferguson ulations, Indonesia stands tall with aplomb. Already a member of the G20, SENIOR VICE PRESIDENT, FORBES ASIA Tina Wee Indonesia’s GDP recently hit the S1 trillion mark. It is now in the company of G8 and BRIC countries. OCTOBER 2018 — VOLUME 9 NUMBER 10 As Luhut pointed out, high-profile investors such as Jack Ma and top executives of Black Rock and Facebook will also descend upon Bali. FORBES INDONESIA is published by PT Wahana Mediatama under a license agreement with Forbes LLC, 60 Fifth Avenue, New York, Another sign of encouragement comes from John G. Nelmes, who in an in- New York 10011. “FORBES” is a trademark used under license from FORBES LLC. ©2010 PT Wahana Mediatama • ©2010 FORBES LLC, terview published in this issue, said: “Indonesia’s economy is doing well. The as to material published in the U.S. Edition of FORBES. All Rights Reserved. ©2009 FORBES LLC, as to material published in the edition good news is we believe Indonesia has the appropriate tools to address chal- of FORBES ASIA. All Rights Reserved. FORBES INDONESIA is published monthly, 12 times per year. lenges and sustain and even raise economic growth over the medium term. Copying for other than personal use or internal reference or of articles Public debt levels and the budget deficit are low by international standards.” or columns owned by FORBES INDONESIA without written permission of FORBES INDONESIA is expressly prohibited. Lest there be any doubt over Indonesia’s economic viability, we suggest

CONTACT INFORMATION all to read and re-read thoroughly that paragraph. We rest our case. F Forbes Indonesia: Mayapada Tower 1, 8th Floor, Suite-03 A Jalan Jendral Sudirman Kav. 28, South Jakarta 12920. Tel: (021) 522 6828, Fax: (021) 522 7208. Website: www.forbesindonesia.com : Forbes Indonesia Magazine : @forbes_id : forbesindonesia Subscriber Enquiries: Please contact Circulation Division. Email: [email protected]. Or visit www.forbesindonesia.com to subscribe or advertise. Single copy price Rp 50,000, local subscription rate Rp 480,000 + postal fee (Jadetabek) for 12 issues.

8 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 9 FACT & COMMENT “With all thy getting, get understanding”

TIME TO TERMINATE “ASSISTED DYING” BY STEVE FORBES, EDITOR-IN-CHIEF

IN 2002 BELGIUM legalized the into going the assisted-suicide route murderously chilling act of euthana- to save money. “Why force me to end sia, whereby doctors and nurses kill my life?” the plaintiff asked. patients with their supposed consent. It’s one thing for people to de- Holland had formally done the same clare in writing when they are in the year before. This practice, all too good health and of sound mind that reminiscent of what Nazi Germany no “heroic” measures are to be taken, did before WWII to the mentally that medical staff should “let nature handicapped and to people with very take its course.” But it’s quite another serious disabilities, is justified these for medical personnel to actually kill days not by Hitlerian theories of “pu- patients, as is happening in Belgium, rifying the race,” of course, but as a Holland and elsewhere. “humane” way to deal with those who Research shows that many eutha- are suffering mortal illnesses and in extreme pain. nasia and assisted-suicide victims are suffering from Many thousands of patients have been disposed depression. They should be treated, not abandoned. of since Holland and Belgium enacted these morally As for physical suffering, it’s hardly beyond the capa- repugnant laws. Belgium now allows euthanasia to be bilities of modern medicine to effectively manage pain applied even to children, acknowledging recently that with older, well-established medications, as well as between Jan. 1, 2016, and Dec. 31, 2017, two children, newer, better drugs. ages 9 and 11, who were afflicted with a brain tumor It’s true that in the U.S. we have a serious opioid and cystic fibrosis, respectively, and a 17-year-old, who crisis. Nonetheless, the response shouldn’t be a dimi- had Duchenne muscular dystrophy, had been put to nution in pain management but, alternatively, a focus death. Apologists say these kids gave their consent, as on reducing and eventually eliminating the abuses. did their parents. Good God! Are we to believe that The temptation to use euthanasia as a solution will youngsters should be making such decisions? only increase as populations age and as cash-strapped Holland has been hit with scandals in which pa- governments and insurers scramble to find ways to re- tients were administered lethal injections without their duce growing healthcare costs. It should be axiomatic consent, in order to free up “needed” hospital beds. that life is sacrosanct, whether or not you are religious. After all, the reasoning went, these people were going In recent times we have seen enormous medical to die soon, anyway. In Belgium, according to a news advances that not only prolong life but also improve report, a member of the Federal Commission for Eu- the quality of life as we age. The answer to the ris- thanasia Control & Evaluation resigned last year “in ing costs of healthcare is the creation of genuine free protest at the unchecked killings of dementia patients.” markets, which always turn scarcity into abundance. What’s happening here is an ugly, slippery slope. There is precious little in the way of free markets in Instead of working to alleviate the tribulations of the healthcare. Third parties, primarily governments and afflicted and innovating ever better ways to do this, insurers—not the patients—still dominate. This is be- we simply “put them out of their misery,” the way we ginning to change in the U.S. Rapidly effecting this do with household pets. transformation should be our urgent goal, not sur- It’s not only in Belgium and the Netherlands that rendering to rationing or descending into the pit of we’re seeing this awful phenomenon. A chronically ill euthanasia and “assisted dying.” man in Canada is suing the government because medi- Morally and pragmatically, such practices have no cal personnel allegedly and illegally tried to coerce him place in a truly civilized and humane society.

10 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 11 FACT & COMMENT STEVE FORBES

The End of Work: Why Your Passion Can Become Your Job JOHN TAMNY (GATEWAY EDITIONS, $28.99)

make a living from his own unique the size of the Yellow Pages.” Great skills and intelligence.” football players—or those great at any The way the author—a longtime sport—are intense students of the game. and valued contributor to both Forbes Athleticism isn’t enough. In fact, given magazine and forbes.com—illustrates the hard work and the immense physi- this optimistic viewpoint is exciting cal and cerebral discipline necessary to and original. Sports is one area that’s master high-level college football, the been expanding as we’ve become more sport, says the author, should be a major. affluent, with vastly greater needs at Tamny entertainingly discusses all levels of play for coaches, assistants, the creation of numerous new kinds of training specialists, scouts and nerdy jobs, such as coaches for teams of video number crunchers to better evaluate game players (one competition can at- players and prospects (the fascinating tract tens of thousands of fans) and dog subject of Moneyball, both the book walkers, as well as the rising remunera- Everyone, regardless of age, in- and the movie), as well as for agents, tion (often in six figures) and sophis- come and occupation, will find this lawyers, marketers, publicists and tication of traditional, once seemingly short, pithy and wisdom-rich book in- broadcasters—not to mention the si- simple tasks such as caddying (pro golf spiring and instructive. multaneous explosion in infrastructure, caddies are trusted and crucial advisors Its thesis is simple yet profound: such as ever better and more sophis- to players). Greater prosperity gives more and ticated equipment, player-monitoring With affluence, people’s tastes for more people the opportunity to devices, playing fields and stadiums. finer things expands. Costco is today match work with passion, the kind of Many people still regard football as a the biggest importer of French wine in work that “has you excited on Sunday game of lumbering semi-Neanderthals. the world. nights.” Critical to this “luxury” is a The NFL and serious college football Tamny closes his enjoyable work growing economy. “The freer people are both tough and cerebral. “Few of us with this thought: “In an economy of in- are to earn as much as they can and have the intelligence to play football on dividuals, we’re all better off when each keep it, the more likely it is that ev- the professional level,” Tamny notes. person gets to pursue what most ampli- eryone will have the opportunity to “Players have to memorize a playbook fies his unique skills and intelligence.”

The Second Coming: A Thriller JOHN HEUBUSCH (HOWARD BOOKS, $26)

what happens next, with your heart clone has been created from DNA con- racing as if you were running the tained within the shroud that carries a 400-meter race at the Olympics. plague aptly named “the Devil’s Sweat.” The novel is a sequel to last year’s The aim of the conspiracy is the ulti- spectacular bestseller The Shroud mate cataclysm: to wipe out humanity Conspiracy. In this second install- via this unholy laboratory experiment. ment Heubusch continues the story The race is on to save the human race. of Jon Bondurant, who, despite being Does this apocalyptic plot sound a skeptic of the legend, found himself too outlandish? It’s a tribute to Heu- investigating the Shroud of Turin, a busch’s considerable gifts as a com- relic many believers take to be the pelling storyteller that the characters burial cloth of Christ. and events feel all too real. This fantastic tale of mystery and Bondurant quickly realizes that I have only one question for the conspiracy will have you flipping the shroud is not only authentic but author: When does the next book pages at a breakneck pace to find out also the nexus of a global conspiracy. A come out? F

12 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 13 Updates BY ARDIAN WIBISONO

Eragan are two startups that connect te company UNILEVER INDONESIA with local chili farmers to secure supply. For production Unilever works with Sidoarjo-based food ENTERS CHILI SAUCE manufacturing company PT Sekar Laut. Sancoyo Antarikso, Director of Governance and BUSINESS Corporate and Corporate Secretary of PT Unilever Indonesia, said that this new innovation is expected PT UNILEVER INDONESIA entered sam- to help growth in the business foods segment. bal sauce (Indonesian chili sauce) business Besides Jawara chili sauce, Unilever also has launching a new brand called Jawara. Sambal is six other food and beverage brands: Lipton, Royco, a popular food condiment in the country and a Walls, Bango, Buavita and Sari Wangi. Recently big business too. Based on data from Eurmoni- the company sold Blue Band and Fryto to Kohl- tor, consumption of chili sauce last year grew by berg Kravis Roberts. The business line counts 12% to 13%. Big players in the business includes 2.8% of Unilever’s total revenue last year. The KraftHeinz and Delmonte. company management said the separation of the Unilever started the development of Jawara margarine business marked the further step of the chilli sauce products since 2017 by involving Unilever Group in shaping and sharpening the several local partner and startups. Prestani and business portfolio for long-term growth.

GERARD INZERILLO APPOINTED AS CEO DIRIYAH GATE DEVELOPMENT AUTHORITY

Vice Chairman of CEO of Forbes Travel Guide Gerard Inzerillo has been appointed as CEO of the Diriyah Gate Development Authority (DGDA) by Mohammed Bin Salman Bin Abdulaziz Al Saud, Crown Prince of the Kingdom of Saudi Arabia and Chairman of the Authority. Gerard will spearhead a transformative initiative to restore the Diriyah, a UNESCO registered site, that holds a historical depth of more than 590 years as the birthplace of the first, second, and current Kingdom of Saudi Arabia, it is the root of the Saudi nation. The restoration of Diriyah includes developing a number of major new historical and tourism assets including museums, academic institutions and “edutainment” facilities, as well as resorts, restaurants, wellness facilities and high-end retail in a 7.1 million square meter development on the west side of Riyadh. Much of the original site, built in adobe brick in the traditional architecture of the greater Najd region, will be authentically restored with new tourism attractions and facilities. “I am deeply honored to have the privilege to contribute to His Royal Highness’ Dynamic vision for the nation,” said Gerard. “This is truly an inspired time in this extraordinary country. I am particularly grateful to lead a world-class team in the development of this historic site, which will give the world its truest window into the soul and spirit of this land, its welcoming people and their rich history. Diriyah will be one of the great gatherings places in the world.” Forbes Travel Guide is the global standard for the verification of

service excellence in hospitality. INZERILLO J. OF GERARD COURTESY

14 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 15 Updates

MAYAPADA PROPERTY ARM IPO

One of Tahir’s Mayapada Group Simprug Signature property arm PT Propertindo Mulia Investama listed its shares in Indo- nesia Stock Exchange. The company sold 1.4 billion new shares or 15.01% of the total shares with a target proceeds of over Rp 335 billion (based on the highest range of the offering price as of September 20). The company currently has four property projects in its pipeline in four different cities in Indonesia: Jakarta, Solo, Makassar, and Maja. Most of the money generated from the IPO will be allocated to finance the development of its apartment mix use apartment and office tower project. Both have began construction phase towers the Simprug Signature in and will be gradually completed in 2028 for the Simprug Signature and 2024 for the Jakarta. The remaining 15% and 5% Kahyangan. The projects in Makassar and Maja will start in 2021 and 2022. will be used to finance apartment “Despite the existing projects in the pipeline we will also continue to look for tower project the Kahyangan in potential locations to acquire,” said Raymond, the president director, during the Solo and working capital. company public expose in Jakarta. The Simprug Siganture is a Tahir, who is the founder of Mayapada Group, is ranked #8 in Forbes Indonesia’s six-tower apartment project with rich list in 2017 with $3.5 billion in net worth. Besides property, Tahir also has inter- over 1,600 units available for sale. est in banking, healthcare, and media. He also co-owns the licensee that publishes Meanwhile, the Kahyangan is a Forbes Indonesia magazine.

SALIM GROUP INVESTS IN STARTUPS

SALIM GROUP, through Indofood Local Pitch merous sectors including healthcare and nutri- Competition, has selected three startups that tion. We are hoping tech startups could be a focus on solving nutrition issue in Indonesia. solution to eradicate the malnutrition issue in They are Rumah Kelor (moringa producer), Indonesia,” says Axton Salim, Director of PT Garda Pangan (a food bank that helps coordi- Indofood Sukses Makmur, Tbk. All the winners nate the excess food from hospitality industry will get a week of mentoring and technical ad- to communities in need), and Yant Shorgum vice from both Indofood and SBN. They also will (grows and produces organic shorgum in West get the opportunity to attend the Nutrition Af- Nusa Tenggara). The Competition is a collabo- rica Investor Forum in Nairobi on 16-17 October, ration between Indofood, BLOCK71 Jakarta and as well as cash prize of Rp50 million. Scaling Up Nutrition Business Network (SBN) Indofood Local Pitch Competition is the first and is trying to address issues, such as child- startup competition that focuses on nutrition. hood obesity, children under-5 stunting, and Almost a hundred nominations pour in from anaemia adolescence. across Indonesia, namely Jakarta, Central Java, “Startup industry has grown rapidly in nu- East Java, Yogyakarta, and West Nusa Tenggara. COURTESY OF PROPERTINDO MULIA INVESTAMA OF PROPERTINDO COURTESY

16 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 17 TOPICAL SUBJECT TAUFIK DARUSMAN

TAUFIK DARUSMAN IS ONE OF INDONESIA’S MOST EXPERIENCED JOURNALISTS. HE HAS HELD CHIEF EDITOR ROLES AT BUSINESS WEEK INDONESIA AND INVESTOR MAGAZINES, AND THE INDONESIAN OBSERVER NEWSPAPER.

EVIL LEADERS

IN THE OLDEN days we would describe leaders as either mediocre or corrupt. Times have changed, and a new term has emerged: corrupt leaders. Certain names come to mind, but it would be politically incorrect, if not risky, to name them here in writing. Leave it to academics such as Prof. Mahfud MD “We vote not to elect the very best but to come up with yet a new political term: evil leaders. to prevent evil people from ruling the Mahfud knows more than a thing or two about leaders as he has the right credentials: the legal expert was once country,” said Mahfud MD. a defence and security minister, a House member, and the chairman of the Constitutional Court. At present he dafy, Milosevic and Saddam Hussein are made of the is a member of the steering council of BPIP, the state same mold as Hitler. However, their respective track body that promotes the state ideology Pancasila. record on respecting human lives can hardly be de- Mahfud did not allude to a political party leader scribed as unblemished. – or any leader, for that matter – when he raised the Closer to home, region-wise, one may be remind- ominous issue. Interestingly enough, his astute ob- ed of the genocide in Cambodia. It was perpetrated by servation on types of leaders came up in the wake of the country’s leader, Pol Pot, who in the 1970s is said to his recent loss as the running mate of President Joko have exterminated up to three million of his own people Widodo (Jokowi), who is seeking reelection next year. (about 25% of the country’s population at the time) in As Mahfud later disclosed, he was sidelined at the his quest to create a new society. eleventh hour. Jokowi, Mahfud fumed, had come un- Lest one thinks the Cambodian genocide was a der pressure from political party leaders to reject him one-time and isolated case, think again. Nearly five and choose another candidate. decades later, history repeated itself in the Indochi- When pressed by the media on what he meant nese country’s neighbor: last month the UN issued by evil leaders, Mahfud switched to evasion mode. what many consider to be a damning report accusing He cautioned the public from making what he called Myanmar’s military of genocide against the Rohingyas “wild guesses” and called on voters to cast their votes in Rakhine state. in next year’s presidential election. By staying away The report accused the country’s armed forces of from ballot boxes on election day, Mahfud argued, the committing what “amounted to the gravest crimes un- people may inadvertently choose an untrustworthy der international law” in Rakhine as well as in Kachin person to lead the nation. “We vote not to elect the and Shan states – an estimated 25,000 people have been very best but to prevent evil people from ruling the were killed and 700,000 had to fled over the border country,” said Mahfud MD. to Bangladesh. For good measure, the report singled But what, in effect, is an evil leader? History has out Min Aung Hlaing, the commander-in-chief of the more than its share of evil leaders in the real sense of Myanmar military, and his subordinates as the culprits. the term. For example, no one fits the bill better than So, when Mahfud, ever the consummate intellectual Adolf Hitler. The German leader is responsible for the that he is, spoke of evil leaders, little did he realize he annihilation of six million Jews in the 1940s. was referring to a human tragedy that remains in exis- Historians may be divided on whether authoritar- tence today. His words ring like a cautionary tale one F ian leaders with a violent streak such as Stalin, Kha- should thoroughly ponder. ADOBE STOCK

18 | FORBES INDONESIA OCTOBER 2018 SUSTAINABLE DEVELOPMENT SCOTT YOUNGER

SCOTT YOUNGER IS A DIRECTOR OF PT NUSANTARA INFRASTRUCTURE TBK, PRESIDENT COMMISSIONER OF PT GLENDALE PARTNERS AND INTERNATIONAL CHANCELLOR OF PRESIDENT UNIVERSITY.

have to be taken into account for the design and con- LOMBOK – struction of new urban developments. In the case of lower level housing and small private FURTHER QUAKE endeavors, architects and engineers should be paying increasing attention to using more widely flexible com- REMINDERS ponents in construction such as bamboo, something which grows easily in the tropical climate of Indonesia. There are already some interesting structures in Bali IT IS NOT MUCH more that are including bamboo as a part, sometimes very sig- than a year and a half since nificantly, of new structures. East Bali Poverty Project has the Pidie earthquake in Aceh now established a bamboo training center. There is also province in December 2016. the Green School. but wider application is needed and the This invoked a comment from preparation and issue of a clear bamboo design manual that me (FI, Jan 2017) about the becomes an important element in building regulations. need to carry out an inven- One of my abiding memories, from viewing the dev- tory at regional government astation of the Aceh tsunami disaster of December 2004, level of old civic and com- was visiting a residential area where all but one structure mercial buildings in the many had been flattened, and I am not referring to the mag- earthquake zones of the archipelago. The recent several nificent, sturdily built 1881 Grand Baiturrahman mosque. devastating events in and around the island of Lombok, The reinforced concrete framework of the two-storey preceded by the rumblings of Mt Agung in Bali, still ongo- house that had withstood the tsunami, albeit non-struc- ing after one year with its associated earthquakes, are again tural elements such as doors and windows had obviously a reminder that attention has to be paid to structures, most been affected, had been properly designed and construct- of which are not designed to withstand strong earthquakes. ed; its foundation to main structure and joints for col- There has to be a systematic effort carried through umns and beams had been put in correctly. by local government to undertake a structural inven- The 2004 earthquake-triggered tsunami was fol- tory and either strengthen through retrofitting or, if lowed three months later by another earthquake in Nias, more appropriate, replace vulnerable, sometimes vener- killing 1,000 people and leaving many homeless – note able buildings. The behavior and impact of earthquakes the relatively close timing to that of the Aceh disaster. and the technological solutions to withstand or at least In May 2006, the large earthquake that struck Yogya- minimize damage to structures are well understood and karta, killing 5,700 and destroying 280,000 homes, was followed seven weeks later by one off the south Java coast triggering a small tsunami, killing 650 and leaving 28,000 people displaced. One main tectonic event can often be a signal for others to follow shortly thereafter. In November 2012, attended by President Yudhoyono, a high level conference in Jakarta to wrap up the World Bank administered Multi-Donor Fund and a similar fund to administer relief efforts was held, and attended by representatives from Japan and Haiti, who added their natural disaster knowledge and experiences. The Indonesian presentations indicated that the country was developing systems to deal promptly with disasters, both to provide for immediate needs and for the longer term with community recovery. The strong response to recent events would seem to show that the systems are working. The next thing is to turn more attention to resistance and resilience factors in rebuilding and in new building codes and materials. Indonesia straddles arguably the most active earth- F ADOBE STOCK quake, volcanic eruption location on the planet.

OCTOBER 2018 FORBES INDONESIA | 19 20 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 21 FORBES INDONESIA ISSUE & IDEAS BALI WASTE CRISIS

Make Haste, not Waste In Bali, an NGO and private businesses join forces to address the island’s dire trash problem.

BY MARELLA PUTRI

ali faces an obvious crisis: waste. Not only does it endanger its marine life to an irreversible extent, it Bis also hurting the paradise island’s economy that relies on tourism as its main source of income – it accounts for around Rp 50.24 trillion or almost 25% of its GRDP. Coordinating Minis- ter for Maritime Affairs Luhut Panjai- tan said that Bali produces over 3,000 tons of garbage daily, with 70% coming from land as plastic waste. Along with the growing trend of sustainability awareness among travelers, both Bamboo straws used at Alila Ubud. bottle, bags, lids and cup lids, and urg- the public and businesses are called on ing waste separation. By filling up the to act more responsibly in improving form on the website of OIOV, signato- the island’s sustainable development. ries have the flexibility to set their own One of the many efforts to spread target on gradually abandoning these awareness of this issue was last plastic materials based on their respec- month’s “Act Local, Impact Global” tive pace and capacity. OIOV will also Conference, a collaboration between keep them informed with related gov- youth-powered NGO One Island One ernment policies, collecting data of in- Voice (OIOV) and Alila Hotels and novation and alternatives, and making Resorts, which was attended by over the registered signatories public. 50 members of the Bali Hotel Associa- Komitmen has enjoyed wide sup- tion. It was held only a month after port from the public and the tourism OIOV launched its initiative called industry since it was launched in July. “KOMITMEN”, which brought to- This is remarkable as businesses are gether individuals and businesses to the ones who reached out to OIOV commit themselves on fighting plas- upon joining and has gathered 200 sig- tic pollution by banning single-use natories. In view of the real interest for of daily items such as straws, water change, OIOV founder Melati Wijsen is

22 | FORBES INDONESIA OCTOBER 2018 build an Integrated Sustainable Re- events, with its China-based prop- source Recovery Facility (ISuRRF) and erties alone eliminating 13 million a laboratory. It invested about $125,000 waste of plastic water bottles. per hotel to have a full composting sys- “We are keeping track of our plas- tem to process organic waste. Current- tic material usage through the central ly, 2 properties are already equipped purchasing system to see how much with this facility, and they aim to have less we have used over the time. More it operated by all four Bali properties than just a corporate responsibility by the end of year to reduce waste by program, we bring this cause to the at- 100%. Alila also has its own plastic-free tention of our suppliers, educate and bottling plant, which since its operation work with them. We go to the facto- in 2014 has produced more than 1.1 mil- ries and try to find alternatives to the lion bottles. Other measures that have harmful waste,” explains Andreas. been implemented are the use of bam- According to OIOV, what is also boo straws and biodegradable pots for crucial to the success of the public all coffee machines in the hotel. and companies’ determination is gov- Their long focus and efforts on ernment policy, which unfortunately sustainable practices has helped them is lacking. Officials are so far reluc- to continuously achieve certification tant in enforcing single-use plastic from EarthCheck, an Australia-based material ban on the island, reasoning sustainability benchmarking company that ‘the people and businesses aren’t for hotels and the tourism industry. ready yet’. However, businesses’ re- Through this participation, they are sponses towards The Komitmen and able to save $1.2 million from energy both locals and tourists’ concern have and water consumption, and waste proven otherwise. management. Pierre Lang, General This month’s IMF-WB Meetings in Manager of Alila Seminyak, further Nusa Dua, Bali, provides the momen- adds: “If we don’t sort out the island’s tum to deliver proof. During World waste management and water sys- Bank President Jim Yong Kim’s visit to tem to cope with the increasing large Bali in July, he met with several stake- number of tourists now, tourism will be holders for discussions on plastic waste gone in the foreseeable future.” in Bali, including Finance Minister Sri Walking down the same path Mulyani and Coordinating Minister for looking forward to have 1,000 signato- of improving waste management is Maritime Affairs Luhut Panjaitan. Dur- ries by the end of the year. Conrad Bali, a member of the Hilton ing the discussion Mulyani announced One of Komitmen’s signatories, Ali- chain of hotels whose goal is to re- that the government will provide in- la, which owns four properties across duce waste-to-landfill by 50% within centives to local governments that Bali, produces 500 tons of waste annu- the next two years. General Manager manage the reduction of plastic waste ally and feels obliged to provide sound of Conrad Bali Andreas Justkowiak as a follow-up to the World Bank plans management on the issue. “Since 2016 says that annually Hilton hotels in the of funding Indonesia’s program of 70% our portfolios in Bali have been doing Asia-Pacific region produce 7 million waste reduction by 2025. They believe the ‘Zero Waste to Landfill Project’, waste of plastic straws. After invit- that if this commitment can be success- which shuns throwing waste that can- ing OIOV who stressed the urgency of fully implemented in Bali, then it can not be sold or without being recycled waste management at the Southeast also be done anywhere else. first. Since 86% of our waste is organic, Asia General Manager conference in “What Komitmen aims to do is we are able to do a lot with it and turn February, Hilton has since pledged to to really present proof that people them into an economy,” adds Marco no-plastics commitments. All of Hil- are taking leadership into their own Groten, General Manager of Alila Villas ton hotels across Asia-Pacific have so hands. Bali is leaving the plastic indus- Uluwatu and Regional General Man- far reduced 2.5 million plastic straws try with or without the government. ager of Two Roads Hotels. by transitioning to biodegradable pa- There is no other option, and we will For this project, Alila is working per straws. They are also removing start looking for alternatives our- F ADOBE STOCK with a counterpart in Singapore to plastic water bottles in meetings and selves,” says Melati Wijsen.

OCTOBER 2018 FORBES INDONESIA | 23 MONEY & MARKETS RAINER MICHAEL PREISS

RAINER MICHAEL PREISS SERVES AS PORTFOLIO STRATEGIST AT TAURUS FAMILY OFFICE AND IS THE CO-FOUNDER OF THE BLOCKCHAIN AND CRYPTO ASSOCIATION OF SINGAPORE.

INDONESIA AND THE EMERGING MARKETS CRISIS

IN 2017 Emerging markets Indonesia to intervene in the market as the currency were the best performing hit its lowest since the Asian financial crisis in 1998, major asset class, rising according to Reuters data. A combination of weak +33% and in 2018 it is the trade data and high external debt relative to other worst equity market seg- Asian markets makes the rupiah vulnerable to volatil- ment with -21%. What a ity in emerging market currencies. difference a year can make. Increasingly the analysts community “consensus Over the past decade, a lot view” seems to imply that Indonesia equity valuations of capital has flowed into haven’t become overly compelling yet and consensus emerging markets thanks still needs to factor in rupiah weakness even after the in part to excessive liquidity of QE (Quantitative Eas- drop in the in Jakarta Composite Index this year. Valu- ing) in advanced economies foremost the U.S. Now ations have improved with the decline in the stock that the U.S. is raising interest rates and moved to QT market. Currently, the Indonesia Investable universe (Quantitative Tightening), it is causing pressure on of 539 stocks trades at a forward P/E (Price-earnings emerging markets and also on Indonesia. ratio) of 14.7x, but the growing question for inves- Despite last year’s stellar performance, emerging- tors in Indonesian stocks is whether EM “contagion” market stresses have been building since at least 2013. could lead to further selling pressure on IDX. Investors may have forgotten the effect of the “taper The line of thinking goes like this: while the tantrum” on the so-called Fragile Five — Brazil, India, emerging market asset class may offer value over the Indonesia, Turkey and South Africa — a term coined long haul, investors will sell relatively safe holdings by Morgan Stanley to describe their vulnerability to to cover losses in more vulnerable markets or, worse, capital outflows when interest rates in the U.S rise. treat all emerging markets the same and sell indis- Monetary accommodation, lower current-account criminately. A herd mentality has taken over, mean- deficits and growth disguised the underlying chal- ing no matter what the relative risks and potential lenges, attracting more capital to emerging markets. returns are in individual countries, investors who Indonesia’s external vulnerability indicators, in- choose to buy run the risk of being trampled. cluding foreign exchange reserves, external debt, As long as trade wars are front and centre and and net international investment, remain elevated in the Fed is hiking interest rates versus the rest of the comparison to the rest of ASEAN and India, even if world, we are in an environment that leads to much they may look better in comparison to taper tantrum stronger U.S. dollar and potential for further emerg- of 2013. Indonesian assets may remain under pres- ing market weakness. Over time the Emerging Mar- sure albeit less volatile than in 2013 if the emerg- kets sell-off is an opportunity to buy on the basis of ing markets sell-off continues. The valuation on the stronger fundamentals, such as easing inflation, trade MSCI Indonesia gauge isn’t “overly compelling” at a surpluses and widening growth differentials between 16% premium compared with Asia ex-Japan stocks. emerging and developed markets, but for now the Overseas investors who have pulled around $3.7 downtrend seems firmly in place. billion from the Indonesian equity market this year Indonesia’s key stock index may be down 15% may be wary of jumping back in amid worsening sen- from its February peak but it still isn’t time to get timent toward emerging-market assets. Foreigners back into equities (yet). The rupiah’s weakness may are unlikely to return to Indonesian equites without a still keep global investors away from Indonesia as credible policy to stabilize the rupiah and a recovery emerging-market turmoil deepens. Markets are as ef- in corporate earnings. ficient as the people within them and financial crises The rupiah was hitting its lowest against the dol- always take longer to arrive and unfold more quickly lar in over twenty years last month, prompting Bank than people expect. F

24 | FORBES INDONESIA OCTOBER 2018 CEO WISDOM ANDREW TANI

ANDREW TANI IS AN AUTHOR AND SPEAKER ON INNOVATION, STRATEGY, ORGANIZATION AND DIGITAL TRANSFORMATION. HE IS THE FOUNDING PARTNER OF ANDREWTANI & CO., A 39-YEAR OLD MANAGEMENT CONSULTANCY BASED IN JAKARTA. HE CAN BE REACHED AT [email protected].

MAKING INDONESIA 4.0

THE COUNTRY’S In- business partners. Imagine Industry 4.0 as the manu- dustry Minister Airlang- facturing counterpart of Enterprise 2.0 that is being ga Hartarto is on a mis- deployed by the corporate center and other functions. sion. He is advocating the While the industry ministry has raised the bar transformation of five of for its employees, re-training and re-skilling them to the country’s 84 indus- become as digital savvy as their private sector coun- trial sectors, namely food terparts in due course, Hartarto has called upon the and beverages, electronics, academic community to join the revolution, pointing automotive, biochemicals, to curriculum design in advanced economies that and textile, clothing & ap- introduce manufacturing topics such as 3D print- parel. Together they represent 60% of the country’s ing, welding or computer numerically-controlled GDP, 60% of the country’s exports and provide em- machines, as early as the first year of learning across ployment for 60% of the workforce. the board, side by side with the social sciences. “I “Sectors outside the priority list are in any of also urge our academic community to continue to the three stages of the industrial revolution. Our strengthen three essential foundations that our work hand-made clove cigarette factories are in 1.0, and force will need in the digital economy: the English will continue to provide massive employment in the language, statistical data analysis and computer cod- provinces where they are located. We have many ing,” concluded Hartarto. factories in 2.0 that have mastered the use of the One of the recent examples of support for Min- assembly line to efficiently produce goods in large quantities. Among those in 3.0 who have computerized their production processes, we prioritized those With Indonesia 4.0, the executive five sectors to blaze the trail toward the smart fac- decision to pursue massive tory. Indonesia 4.0 is the change concept that will investment in infrastructure finds guide our initiatives in technology, human resources development and the digital revolution, which refers further strategic justification. to the interaction between man and product, and man and machine, “ explained Hartarto. ister Hartarto’s mission for making Indonesia 4.0 is Industry 4.0 is commonly referred to as the the decision of Telkom Group subsidiary, Telkom- fourth industrial revolution. The most progressive sel, to make available to industry players and the manufacturers have deployed computerized automa- academic community the results of a six-year An- tion and connectivity with the internet of things & drewTani Research study that articulates the digital artificial intelligence in the third revolution. Ger- mindset, the digital leadership practices and corre- many is leading the world into the fourth revolution, sponding digital skills needed to survive and grow in where smart factories aim to enable fragmentized the digital economy. customization by digitizing all processes and apply- As Indonesia 4.0 rallies government, industry ing robotics to the optimum. and the academic community in a concerted effort In the April 2015 issue of Forbes Indonesia, this to build smart factories, the executive decision to column reviewed Enterprise 2.0, the revolution in pursue massive investment in infrastructure finds communication and information technologies that further strategic justification. Indeed, it is now the saw business processes digitized across the enter- turn of industry and trade to pick up the proverbial prise, on-demand technology accessed through the ball and take full advantage of the socio-economic cloud, virtual teams deployed, and knowledge instant- fruits of President Joko Widodo’s growing achieve- ly and seamlessly shared among all employees and ment in building the national infrastructure. F

OCTOBER 2018 FORBES INDONESIA | 25 FORBES INDONESIA ENTREPRENEURS CITA RASA PRIMA Success Ingredients Nirmal Rajaram made Cita Rasa Prima one of the fastest growing F&B companies in the country.

BY ARDIAN WIBISONO

tarting with a single nasi goreng (fried rice) stall in Band- ung in 2013, award-winner PT Citarasa Prima Indone- sia Berjaya, or more familiarly known as Cita Rasa Prima (CRP) Group, is now one of the fastest growing food chain companiesS in the country. The group now operates nine brands serving daily Indonesian dishes like nasi goreng, instant noodles and meatballs or bakso for 100,000 customers every day at over 200 outlets – franchise and self-owned combined – nationwide. Its popular outlets like Upnormal or Bakso Boedjangan are likely to be jam-packed with customers. Recently, the company entered into a strategic partnership with Anthony Salim’s Salim Group. The company has bold ambition as it aims for international expansion, starting with opening up outlets in Singapore next year. And so far, the company claims to have zero debts. “Our vision is to become the largest food chain in Indonesia and someday the largest Indonesian food chain in the world,” says Nir- mal Rajaram (36), CEO of CRP, at one of Upnormal’s latest and biggest outlets in Bandung, West Java. Nirmal is not just boasting. Before he joined CRP the company was already growing steadily. But it was under his management that the group grew rapidly, from just over 20 outlets and only three brands in 2015. CRP was initiated by a group of young people, most of whom college mates studying at Universitas Parahyangan who had earlier started a brand consulting company. When tourism was on the rise in Bandung in 2013, they saw the opportunity to ride the trend by starting a food business as they also loved to eat. It also happened that the business posed relatively low entry barriers. With an initial capital of Rp 120 million, the group started their first food venture with a menu offering their signature brand Nasi Goreng Mafia aimed at university students – Bandung is home to several respectable universities. Why choose to start with nasi goreng? Danis Puntoadi (38), CRP’s co-founder, says they basically got the idea from a CNN survey on the

world’s most delicious foods: rendang and nasi goreng. But they ulti- INDONESIA FORBES FOR AGOESRUDIANTO

26 | FORBES INDONESIA OCTOBER 2018 Cita Rasa Prima’s co-founder & management (left to right): Danis Puntoadi, Cindy Alvi Onita, Sarita Sutedja, Nirmal Rajaram, and Stefanie Kurniadi.

OCTOBER 2018 FORBES INDONESIA | 27 FORBES INDONESIA ENTREPRENEURS CITA RASA PRIMA mately opted for nasi goreng because prices of its raw materials are relatively cheaper than rendang’s. “There are three factors that would attract students: price, portion, and taste. Our price meets their pockets. While others serve 200 grams of rice per portion, ours is 250 grams. We were confident that our product tasted better. Once they try it, they will come again. The thing is, how to make them try? Everybody loves freebies and Twitter was very popular at the time. So we created 1,000 free plates as promotion, asked them to pay with prayers and to follow our Twitter. The math is simple, if a customer has 500 followers the campaign will reach 500,000 potential customers. It worked very well as people started to queue at the outlet,” says Danis. A similar strategy was applied on other brands like Upnormal and Bakso Boedjangan, which sells In- donesian daily foods with a twist to add value and appeal to growing millennial customers. Upnormal is basically similar to serious cafés like Starbucks - the company claims it only uses high-quality coffee beans and a standard double shot for its espresso-based coffee menus – except that it also serves varieties of Indomie instant noodles and toasts. Each outlet offers free Wifi and electrical plugs are aplenty. Some outlets are even open almost 24 hours to cater to students meeting “Our vision is to become the largest food chain in Indonesia and someday the largest Indonesian food chain deadlines. Meanwhile, Bakso Boed- in the world,” says Nirmal Rajaram jangan serves varieties of meatballs. Both, however, have appealing and “Instagramable” design, which is Loyola College in Bangalore, India, around expert. He played a signifi- important to millennial customers. majoring in business and started his cant role in a Bandung-based textile Nirmal joined the company in career at IT consulting company company restructuring program, October 2015. He graduated from Infosys. He is also a business turn- saving the company from bankruptcy

CRP GROUP BRANDS AGOESRUDIANTO FOR FORBES INDONESIA FORBES FOR AGOESRUDIANTO

28 | FORBES INDONESIA OCTOBER 2018 by settling its $50 million debt in just between franchise stores and self- with a net profit margin of 7.5%, over two years. Nirmal also helped owned stores. It took two to three which is still big in the context of a mining company in South Africa months of preparation for a new Indonesia’s huge population. boosting its revenue from just $3 store as all employees underwent Nirmal says 75% of the com- million to $250 million in just over training and assessment to assure the pany’s business is contributed by a couple of years before starting his same quality standards. franchises and partnerships based own consulting company. Nirmal ini- “Since the beginning our core on management fee and a profit- tially planned to bring foreign food DNA was speed, how to beat the sharing model. This explains how chain brands to Indonesia, but he competition and how fast we could the company managed to have no changed his mind after being cap- improve. The co-founders are good debts to fuel its expansion. Outlets tivated by the lines of customers he at speed but growing fast from hun- are grouped into two: big and small saw at Bakso Boedjangan and other dred to thousand employees was a based on size. Small outlets are be- CRP outlets in Bandung. different ball game. Nirmal helped us tween 18 sqm to 28 sqm, while the He had intended to buy the laid the path that enabled us to safely large ones start with 450 sqm. A master franchise for Jakarta and go from 40 kmh to 250 kmh,” says typical Upnormal outlet investment was surprised to receive only a one Stefanie Kurniadi (33), one of the co- is around Rp 3 billion to 5 billion. and a half page of agreement from founders of the company. Profit sharing percentage is based the franchisor – a far cry from the Scalability is making your pro- on capital investment contributed tedious process one needs to go cess simple, everything is done in by each party, or alternatively the through to obtain an international a standardized manner. If a foreign company just collects a management food franchise elsewhere. Nirmal brand can come to Indonesia and fee if the partner self-finances the says with U.S. food chain franchi- dominate the market, why can’t we investment. The company doesn’t sors, one is usually required to fill up at least be at the same level with disclose financial figures, but based a 20-page form followed by a post- them?” said Nirmal. on the claimed number of custom- evaluation interview in the States. F&B business has huge poten- ers Forbes Indonesia estimates the “I thought something was seriously tials in the country as consump- annual revenue could be about Rp 2 wrong here, so I asked my friend to tion significantly drives economic trillion. Using the standard PE ratio introduce me to the founders. We growth. Research from Roy Mor- of restaurant chain, the company is had our first meeting and exchanged gan published in June shows over worth roughly Rp 2.4 trillion. a lot of ideas in the first six months. 55 million Indonesians aged 14 and However, Nirmal feels uncomfort- I was hoping they would give me the above (34.3% of the population) able to be compared with food chain master franchise but instead got an eat in family restaurants, buy take- valuation as he has more plans for offer to join them as CEO,” says Nir- aways or fast food from leading the company. With branches across mal, adding he immediately said yes diners such as Restoran Sederhana, the country, CRP is also building a on the basis of the good chemistry he KFC, Solaria and McDonald’s. They logistics network that can be utilized had with the founders. also frequent local Padang restau- to add value. For example, empty re- The first thing Nirmal did as rants, buy drive-thru foods or order frigerated trucks coming back to the CEO was simplifying the company’s home delivery from nearby pizza central kitchen could be used to carry structure. Each brand was previous- parlors. Patronage of restaurants fresh materials and the same thing ly under a different company, so he and fast food stores in Indonesia is goes for dry materials. The com- merged them all under CRP. This al- significantly lower than in south- pany could also leverage its central lows efficiency in operation and bet- ern neighbours Australia (84.5%) procurement to serve other compa- ter bargaining position for procure- or New Zealand (84.8%). However, nies with smaller stores and lower ment. Nirmal also set standards and because of Indonesia’s vast popu- bargaining power. CRP also sees big fundamental infrastructure like back lation there are more than three potential in coffee not just by expand- office administration, supply chain, times as many Indonesians that eat ing more Upnormal cafes but also by legal, finance, training center, and at restaurants or fast foods than the making ready to drink, cold brewed IT system. He oversaw the design 17 million Australians that share the products, and freshly roasted cof- of every outlet and even checked in same habit. Data from Reuters also fee vending machines. Nirmal says detail the plumbing and the colors of showed that the sales growth rate in it aims to bring the company public the walls. His idea was that custom- the restaurant industry in the past once it has reached at least a half a ers shouldn’t be able to differentiate five years is nearly 5% each year billion dollar market cap valuation. F

OCTOBER 2018 FORBES INDONESIA | 29 BUSINESS & ECONOMY VICTOR DAVIS

VICTOR DAVIS IS THE FOUNDER OF DAVIS – HOLISTIC MARKETING CONSULTANCY. HE IS A CO-FOUNDER AND DIRECTOR OF WILLANTDAVIS, A START-UP LIFESTYLE PR AGENCY THAT SPECIALIZES IN F&B IN INDONESIA, AND CONSULTANT AT BURSON-MARSTELLER, A GLOBAL COMMUNICATIONS FIRM. THE INEVITABLE THREATS TO F&B COMPANIES TODAY

THE FOOD and beverages a slippage is expected. (F&B) business in Indonesia So what should F&B players be prepared for know- has undergone major devel- ing that the spread of information is vast on social opments, at least from a mar- media and a high stake of slippage can jeopardize the keting perspective. In the company when the employees/products do not meet past we saw many F&B com- customer expectations? Not to mention the old saying, panies rely on physical stores the customer is always right? and advertisements to grow As an industry player, I reckon that it is easy for their businesses, practices customers to complain on Instagram, often with a that are costly and do not scolding attitude and unverified facts. This is followed suit all sizes of companies. But with the growth of social by swarming comments from other Instagram users media and technology, numerous F&B retailers experi- as a form of solidarity with customers who demand ence a boom in the market without having to invest in an immediate apology from a company in question to what they would have been forced to do in the past. acknowledge the mistake. This kind of threat always Their businesses might not have proper kitchen haunts the industry. appliances or attractive stores, yet they can still make Unlike the customer, who acts on behalf of oneself, a fortune just by being listed on food delivery services a company can’t just issue an apology because there such as Go-Food or Grab-Food. are protocols to adhere to. Sadly, customers do not Social media now serves as a marketing tool. Today, fancy that. This is why it’s vital for the company to no promotion budget is needed as seen from the ‘shar- respond within 24 hours. Not always with an apology, ing’ food on Instagram. but with updates to This benefits F&B In the final analysis, it is the company’s assure customers that companies, especially the company recog- when uploaders pos- story versus the customer’s, and the nizes the problem. sess good photography judge is the public. Interestingly, skills and have many complaints are easily followers. This is crucial to note because Indonesia has resolved when the misconduct is the company’s. It issues 45 million Instagram users, the largest in the Asia Pacific. a public apology, tightens the SOP practices, and updates Promotion on Instagram is powerful when the customers on the efforts taken to ensure the case will not posts seem ‘genuine’. Sprinkled with positive customer recur in the future—let it heal and we move on. reviews, awareness of the products is at their disposal. But when the misconduct isn’t acknowledged yet This joy is sustained provided that the customers are the public perceives the customer is right, this can be happy, a condition achieved when everything goes ac- devastating. There is no panacea for this kind of prob- cording to the standards set by the companies and to lem. The common scenario is the company continues the expectations of the customers. to publish updates, even pursues legal recourse, or lets No one can gauge each customer’s expectation. the issue disappear in time. All of this can have dire Companies endeavor to meet the expectations by de- and costly consequences. ploying Standard Operational Procedures (SOP). The Social media benefits F&B companies but their downside of SOP is that it solely relies on the employ- reputation can be at stake. It’s crucial for them to ac- ees in complying with the procedures. knowledge that threats to their reputation are inevita- The F&B operation division is not white-collar ble. They must be prepared and set up a designated is- work simply because employees sell the products ev- sue management team comprising decision makers so ery day to earn the profit maximally. It’s challenging to that measures regarding the issue can be taken accord- uphold the SOP because the quality of each employee ingly. In the final analysis, it is the company’s story is different. No matter how strong the enforcement is, versus the customer’s, and the judge is the public. F

30 | FORBES INDONESIA OCTOBER 2018 FOCUS ON EUROPE EIBN

BART VAN HALTEREN, REGIONAL DIRECTOR MDF MANAGEMENT CONSULTING CORPORATE SUSTAINABILITY STRATEGIES AND GOVERNANCE

CSR (Corporate Social Responsibility) has been on the 9. must be transparent and inclusive agenda for many years. BUMN companies have all been car- 10. must be dynamic, iterative and responsible to rying out some form of ‘social responsibility’. CSR activities change can be tax deductible, ISO 26000 on Corporate Responsibil- 11. facilitates continual improvement of the organi- ity is embraced, and sustainability reporting will be manda- zation. tory in 2020. And yet… on the scale of philanthropy to true The seven key factors that drive companies’ profits sustainability, most CSR (or Corporate Sustainability) strate- and dividends should also be business drivers for sustain- gies in Indonesia are (non-sustainable) philanthropy. ability: reputation and brand strength; competitive, effective, and desirable products, services and new markets; The need for a “business case”: Defining Corporate productivity; operational burden and interference; supply Sustainability (CS) and CS Governance chain costs; costs of capital (lender and investor appeal); “Sustainability is the capability of an organization to trans- and legal liability. A recent study by the Boston Consulting parently manage it responsibilities for environmental stew- Group and MIT confirmed that 67% of surveyed compa- ardship, social well-being and economic prosperity over the nies believe that a CS strategy is necessary to be competi- long term while being accountable to its stakeholders”. tive and an overwhelming majority of companies who The practice of “naming and shaming” pushes larger have a CS strategy identified profit as a result. But this pre- corporations towards sustainability strategies. However, supposes a context (a society) that cares… these sustainability strategies only address the corporations’ responsibilities and not the benefits to the com- Create your ‘Social License to Operate’ pany, and as such are not very sustainable at all; hence CS strategies and their implementation hinge on the soci- the change in name from Corporate Social Responsibility etal ‘social license to operate’. Working with well-known (CSR) to Corporate Sustainability (CS). international NGOs does not automatically create a social Sustainability does not simply mean a set of “do-good license to operate (winning the legitimacy, credibility and and feel-good initiatives” but needs to be structurally inte- trust of stakeholders in society). Earning and maintain- grated into the organization’s way of working and its value ing this social license relies greatly on the establishment of systems. Creating a CS strategy should not only be related good relationships and can be tested through stakeholder to fulfilling social objectives but it should also help to dif- engagement strategies, identifying stakeholders, drafting a ferentiate a company from its competitors and create a materiality index (where stakeholders identify ‘material’, Unique Selling Point (USP) that benefits the company. If or priority, issues) and making conscious choices of which done properly, sustainability...: strategies will contribute to the triple bottom line of the 1. creates and protects value for the organization company (environmental stewardship, social well-being 2. is an integral part of decision making at all levels and economic prosperity). of the organization Transparency, communication and reporting are criti- 3. is an integral part of all organizational processes, cal conditions to not only ensure the success of sustain- not maintained separately ability as a business driver, but at the same time to lead the 4. must explicitly address uncertainty that is present way in Indonesia and ‘making’ people care. in all organizations 5. must be systematic, structured and timely, not a Bottom line? Be sustainable, not just ‘responsible’… series of ad hoc initiatives Can we please get rid of the ‘foundations’, the ‘CSR focal 6. must be based on the best available information point’, the NGO’s, the fixing up of schools and the cleaning (i.e. fact based) up of beaches, and call it ‘sustainable’ or ‘responsible’? Be- 7. should be aligned with the organization’s external cause it is neither. Please, no more… Let’s focus on our sup- and internal context ply chains, our footprint, and, especially, our organisations’ 8. must take human and cultural factors into account values. Sustainability will follow. F

OCTOBER 2018 FORBES INDONESIA | 31 FORBES INDONESIA COMPANIES & PEOPLE WONG HANG TAILOR

ashion-wise, Joko Wido- do (Jokowi) may be the most flexible to be suited up among all of Indone- Fsia’s male presidents. According to Samuel Wongso, the fourth generation of the family that owns Wong Hang Tailor, Jokowi is the only In- donesian president bold enough to try different suit styles. “We’re quite surprised when we saw Pak Jokowi wearing our all grey-plaid suit, shak- ing hands with the Sultan of Brunei Darussalam, who wore a navy-plaid suit that day,” says Samuel proudly. Wong Hang’s relationship with Jokowi began since Jokowi was governor of Jakarta. In the beginning, Wong Hang offered Jokowi suits in primary hues such as navy blue and black, but gradually it offered him a wider selection of colors. “We also offered our very own water-proof fabric to Pak Jokowi. We told him that the next time King Salman comes to Jakarta during the rainy season, he wouldn’t get wet if he uses this fabric,” Samuel said with a laugh. The tailor shop was set up 85 years ago by Samuel’s great-grandfather, Wong Hang, in Surabaya. Initially, Wong Hang only served clients who lived nearby his house. Suitably Bespoke

Four generations on, Wong Hang Tailor rebrands itself and moves into high gear.

BY ULISARI ESLITA TOTO SANTIKO BUDI FOR FORBES INDONESIA FORBES BUDI FOR SANTIKO TOTO

32 | FORBES INDONESIA OCTOBER 2018 His clients then widened to in- Hong Kong to study the nuts-and- they can bring their suits to have it clude the Dutch and the Japa- bolts of tailoring techniques such as fixed should something unbecoming nese, who then helped him to taking measurements and making happen to them. expand his business to as far as patterns. The biggest demand for suits is Jakarta. Taking on the Jakarta Wong Hang suits look distinc- for weddings, which is 40% of total market is another story alto- tive as they combine modern cutting sales, followed by employees’ uni- gether. One of Wong Hang’s with elegant colors to make them form at 30%. The rest are daily needs early customers, Sudomo, the eye-catching. Currently, Samuel orders such as plain and batik shirts late former coordinating min- added, the tastes of Wong Hang’s and others. Wong Hang has also ister for political and security customers have shifted from Italian served requests in large orders such affairs during the Suharto era, cuts to variations on looser, British- as employee uniforms for companies helped him grow the business style double-breasted suits, thanks like Mercedes-Benz Indonesia and in the capital city. to the well-dressed gentlemen-su- Toyota Astra Motors. “Pak Sudomo was very sat- perspies featured in “Kingsman: The Its customers vary, from politi- isfied with our suits. He asked Secret Service”, a 2014 film that had cians and business people to celebri- our family to enter the Jakarta prompted the director to visit a Sav- ties and professional athletes. Last market and introduced Wong ille Row tailor shop in London. year, Wong Hang received an order Hang Tailor to many VIPs,” Prior to making a suit, Samu- from PSSI (the Indonesian Football Samuel recounts. el would set up a meeting with the Association) to make a suit for Emily Today, Wong Hang has 16 customer to find out what he really Heskey, the British football player. outlets covering Surabaya, wants. “Most customers don’t really The suit had to be ready in 24 hours. Jakarta, Semarang, Bandung, As in a Mission Makassar, and even Singapore. The tailor shop was set up 85 years Impossible movie, Wong Hang family members Wong Hang made it share a common interest in ago by Samuel’s great-grandfather, happened. Hesley making suits and control all Wong Hang, in Surabaya. loved the suit and the outlets. “We hold regular made a repeat order. family meetings where we can understand their own bodies, what Last year, PSSI also ordered suits discuss, share experiences and kind of style is best for them and what for the U-23, U-19, and U-17 national exchange information about kind of suits make them feel comfort- football team players. the business,” says Samuel. able,” says Samuel. Once the custom- Innovation is key to success in Samuel started to adore er has made a decision on a particu- building brands. So, after more than fashion since he was a child lar suit he wants, Samuel will take eight decades the company decided as he watched his father, Pe- the measurements, make a pattern to rebrand its image of a traditional ter Wongso, at work making and cut the fabric himself, followed tailor shop to one that is cool, funky, patterns and cutting fabrics by a fitting in order to make sure the and youthful. One way of accom- before making suits. “On one suit fits well. The production of every plishing that is by turning its show- occasion, I watched the Wong suit takes at least four weeks, but it is rooms into modern outlets. Wong Hang annual fashion show in worth the wait. “Every single piece of Hang also benefits from changing Surabaya from the back and suit that comes out from Wong Hang their ways in promoting themselves. watched people went on and is hand-made,” says Samuel. Many years back, Wong Hang al- off the stage wearing beauti- In terms of materials, Wong Hang located large amounts of money to ful suits. At the time I wished usually combines wool with other advertise on TV and other conven- that one day I could organize fabrics such as silk. It is very light tional media. Today, it chooses to my own fashion show,” Samuel and suitable even for outdoor events. promote their suits regularly through recalls. Wong Hang pays attention to ev- social media by uploading images of He began to join the family ery detail of the suit so that it looks their suits. Promotion through Face- business in 2011, starting from modern and stylish as well. This in- book, Twitter, and Instagram may meeting clients and sharing cludes selection of buttons and col- prove to be more effective, especially ideas to taking their measure- lar shapes, pocket style, layers and when introducing new products or ments and making patterns. To fabric selection. Wong Hang offers merely sharing knowledge on how to improve his skills, he went to lifetime warranty to its customers, wear a proper suit. F

OCTOBER 2018 FORBES INDONESIA | 33 34 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 35 PHOTOGRAPHS BY IWAN STRATOCASTER FOR FORBES INDONESIA MAN O F BY TAUFIK DARUSMAN THE HOUR

COORDINATING MINISTER FOR MARITIME AFFAIRS LUHUT B. PANJAITAN IS AT THE HELM OF THE NATIONAL COMMITTEE THAT ORGANIZES THE IMF-WORLD BANK MEETINGS IN BALI. OCTOBER 2018 FORBES INDONESIA | 37 IMF-WORLD BANK MEETINGS 2018 LUHUT B. PANJAITAN

Jokowi couldn’t have assigned In October 2015, the IMF-World a better person for the job. Coordi- Bank Annual Meetings in Peru nating Minister for Maritime Affairs agreed to hold its 2018 October An- Luhut B. Panjaitan, a retired four- nual Conference in Bali. The In- star Army general, already has four ternational Monetary Fund (IMF) ministries under his watch, namely promotes monetary cooperation energy and mineral resources; fish- internationally and offers advice and eries; tourism; and transportation. assistance to facilitate building and But to Jokowi, Luhut is an indefati- maintaining a country’s economy. It gable and no-nonsense person with also provides loans and helps coun- a get-out-of-my-way approach in tries develop policy programs that doing things. Although Luhut had solve balance of payment problems. only less than two years to prepare On the other hand, the World for the meetings, he typically man- Bank provides long-term economic aged to deliver the goods in time— development and helps reduce pov- with flying colours. erty in developing countries through “It’s 96% ready,” he told Forbes technical and financial support. It Indonesia at his office overlooking helps countries reform inefficient E Thamrin Street, the capital city’s economic sectors and implement main thoroughfare, last month. specific projects, such as building “The meetings will benefit In- health centers and schools. Early last year, President Joko donesia both short- and long-term, “Indonesia applied to hold the Widodo (Jokowi) convened a Cabi- particularly in relation to foreign meetings four years ago, in 2014, net meeting on the 2018 IMF-World exchange reserves gain, trade and in- competing with eight other coun- Bank meetings in Bali. He asked a vestment, tourism and, perhaps more tries. The process was very trans- minister to make a presentation on importantly, Indonesia’s leadership parent but juries from the IMF and the event, but barely halfway through in the region. I also made sure that the World Bank eventually decided the president interrupted him and the Rp 855,5 billion ($58.26 million) to choose Indonesia after taking into said: “I appoint Coordinating Min- budget for the event will not go to consideration many factors, includ- ister Luhut Panjaitan as Chairman waste,” said Luhut, a former Kopas- ing accommodation, transporta- of the National Committee on the sus (Special Forces) commander. tion, easy access, security and other IMF-World Bank Annual Meetings in “The main objective of hosting technical issues,” said IMF Manag- Bali.” Many in the room were slightly the meetings is to showcase Indone- ing Director Christine Lagarde early taken aback, but all agreed that sia and Asia as reformed, resilient, this year in Bali. Jokowi had made the right choice. and progressive economies.” The meetings (October 8-14) are one of the world’s largest and influential events on finance and economy as it will bring together central bank governors and finance “THE MAIN OBJECTIVE OF HOSTING ministers from 189 countries along with prominent persons from pri- THE MEETINGS IS TO SHOWCASE vate sector, academics, NGO, and media. Also featured are seminars, INDONESIA AND ASIA AS REFORMED, investment forum, FGD, work- shops, and cultural shows. In a press briefing recently, RESILIENT, AND PROGRESSIVE Finance Minister Sri Mulyani In- drawati pointed out that one of ECONOMIES.” the main agendas of the meeting

38 | FORBES INDONESIA OCTOBER 2018 ernment preparing five top tour- ist destinations, namely Bali itself, Jakarta, Lombok island; Labuan Bajo, which is the de- parting point to the Komo- do islands and other attractions on Flores, the Borobudur temple, as well as Cen- tral Java and Yogyakarta. There will be special will be infrastructure and financial At the end of the Meetings del- tours to Lake Toba in North Suma- technology (fintech) development. egates are expected to issue The tra and to the Toraja Highlands in “The meetings are very important Bali Initiative, which covers four South Sulawesi,” Luhut said. as they are held amidst a global issues, namely capital package Tourism is one of the president’s economy that is undergoing huge related to the IBRD and the IFC, focal points as it is a huge forex changes,” she said. urbanization, human capital index earner and sound provider of jobs. As The venue for the meetings is the and fintech, all of which are aimed per July nine million foreign tourists huge and spectacular Bali Nusa Dua to strengthen the world economy visited Indonesia, up by 13% over the Convention Center at Nusa Dua Re- while urbanization involves joint same period last year. sort area, which offers 21 luxury ho- studies between the Bank and the “We hope to earn $15-17 billion tels. The Bali province government National Planning Body (Bappe- from tourism this year, up from last has constructed a roundabout and nas) and the Finance Ministry. The year’s $12.5 billion. Next year $20 an underpass to ease the normally studies will result in key policies billion are expected to flow into the congested traffic that runs from Nusa that would help countries manage state coffers thanks to the 20 million Dua to the airport and from Kuta urbanization in ways that lead to tourists that are projected to visit the beach to Denpasar. optimum economic growth. country,” he said. Luhut claims that both the IMF The third issue is Human Capital Security for the meetings is and the World Bank are happy with Index (HCI) that focuses on invest- high on Luhut’s mind. 600 CCTVs the way preparations are organized ment policies dealing with health have been installed throughout the and that “the meetings this time are and education and the fourth is fi- vicinity of Nusa Dua, Banyuwangi the biggest in the history of both nancial technology (fintech), a topic and Lombok. A central command multilateral bodies.” He envisions Jokowi had raised in his meeting unit has been set up to coordinate $2-3 billion of investments will be with IMF’s Lagarde. over 20,000 military personnel and pledged by investors during the “The meetings are also a means 5,800 police force to make sure all meetings. to promote tourism, with the gov- goes well.

OCTOBER 2018 FORBES INDONESIA | 39 IMF-WORLD BANK MEETINGS 2018 LUHUT B. PANJAITAN

orn in 1947 in North Sumatra, Luhut spent most THE MEETINGS of his childhood years in the province. He later IN DOLLARS AND moved to Band- ung,B West Java, and entered high school and be- SENSE came one of the founders of the Indonesian Student The IMF-World Bank meetings will not only Action Union (KAPI) that bring together over 15,000 people compris- demonstrated against the ing finance ministers and central bank gover- Old Order and eventually nors from 189 IMF and World Bank member brought down then Presi- countries, representatives from NGOs, parlia- and souvenirs. “Many of the delegates, which dent Sukarno from power. ments and the media in one place, but also number over 15,000, will bring along family In 1967, Luhut entered prime, bona fide investors. members to spend holidays here,” he said the Indonesian Armed “Jack Ma from Alibaba has confirmed his He added that Rp 3.7 trillion (about $400 Forces Academy (Akabri) attendance, and so have top executives from million) worth of improved infrastructure and three years later re- Citibank, Facebook and Black Rock, among will be felt during the event, including a new apron at the I Gusti Ngurah Rai airport and ceived the Adhi Makayasa, others,” said Luhut Panjaitan, Chairman of the National Committee on the IMF-World Bank the Benoa Tourism Port. The meetings are an award conferred to its Annual Meetings. expected to boost Bali’s economic growth by best graduate. In 1988, he He added that over 79 projects worth 0.64% to 6.5%, according to Karana. earned a Master’s degree $86 billion will be offered to investors – Garuda Indonesia will also reap profits as in Public Administration mostly infrastructure – $42 billion of which the flag carrier has added 14 extra interna- from George Washing- to foreign investors. A special publication on tional flights per day to Bali on the eve and ton University and a year investment opportunities is currently being after the meetings. Meanwhile, Transportation later graduated from the prepared by the ministry of state companies Minister Budi Karya Sumadi has allocated six National Defense Univer- and will be distributed during the meetings. sites for the delegates’ 100 aircraft to park. sity, both in Washington Meanwhile, Head of Bank Indonesia’s “But they cannot all be accommodat- DC. His stellar military office in Bali, Causa Iman Karana, estimated ed in Bali, some of the aircraft will have to be kept in Surabaya and Makassar, which career is complemented that the meetings will see Rp 5.7 in circulation, thanks to expenses related to accommo- will mean additional income to the two by brief stints as ambassa- dation, transportation, consumption, leisure cities,” he said. dor to Singapore and trade and industry minister in the early 2000s during the term of President Abdur- rahman Wahid. Prior to entering his civilian career, Luhut had held various battle- field and training po- sitions, among others Commander of Group 3 Kopassus, Commander of Infantry Weaponry (Pussenif ), Commander of Army Education and Training (Kodiklat). He COURTESY OF KEMENTERIAN PUPR (2) COURTESY

40 | FORBES INDONESIA OCTOBER 2018

IMF-WORLD BANK MEETINGS 2018 LUHUT B. PANJAITAN

“I have strong principles, one of which is always tell the truth. I have RI ECONOMIC SNAPSHOT this to say to my seniors: do not tell lies to the young generation,” he says. ASIAN TAPER “We should trust official data, not FINANCIAL TANTRUM SEPTEMBER CRISIS (1998) (2013) 2018 rumors. Let’s us not deceive the pub- GDP GROWTH (% YOY) 7.0 0.0 5.1 lic with false information,” he said, al- luding to Gerindra chairman Prabowo GREDITS GROWTH (% YOY) - 23.5 0.7 Subianto’s and former President Susi- CURRENT ACCOUNT DEFICIT (% OF GDP -2.7 -3.0 -2.3 lo Bambang Yudhoyono’s (SBY) public RESERVES (MONTHS OF GOODS IMPORTS) - 32.9 33.0 statements questioning the state-run EXTERNAL DEBT (%GDP) 02.1 32.9 33.0 stats body BPS findings on the na- INFLATION (%YOY) 5.2 4.2 3.4 tion’s under-10% poverty level. At the end of the one-hour meet-

2017 2018f* 2019f* ing, Luhut shared his views on Indo- nesia’s current economic situation. REAL GDP Annual Percent Change 5.1 5.2 5.2 “I don’t see the country facing a huge PRIVATE CONSUMPTION Annual Percent Change 5.0 5.1 5.1 crisis. Sure, we need to be cautious. INVESTMENT Annual Percent Change 6.2 6.8 6.8 But we should not need to be overly CURRENT ACCOUNT BALANCE Percent Of Gpd -1.7 -2.4 -2.3 concerned we are facing a crisis simi- CONSUMER PRICE INDEX Annual Percent Change 3.8 3.4 3.7 lar to that in 1998, the conditions are

SOURCE: WORLD BANK, SEPTEMBER 2018 *FORECAST very different,” he said. “The major difference lies in the leadership. Jokowi is not corrupt, he also set up Detachment 81 (now resigned from the position to join is an exemplary and clean leader, none Sat-81/Gultor) of Kopassus, the In- Jokowi’s presidential campaign. of his family members have business donesian Red Berets. When Jokowi was elected presi- with the government.” In 2004, Luhut entered the busi- dent, he created a new Cabinet-lev- “And remember, we have Sri Mu- ness world by setting up PT Toba el position and appointed Luhut as lyani as finance minister, whose cred- Sejahtera and several subsidiaries Chief of Presidential Staff. Jokowi ibility in the international world is involved in mining, energy and ag- later reassigned him first as Co- impeccable. All of this makes global riculture. With wealth came social ordinating Minister for Political investors confident in Indonesia.” responsibility; Luhut is the chair- Affairs and later as Coordinating Moreover, he added, our eco- man of the DEL Foundation, which Minister for Maritime Affairs, his nomic fundamentals are much better oversees schools a technology col- current position. than they were in 1998. Growth in the lege for underprivileged students, a Luhut makes it clear that it is his second quarter is 5.27%, the highest bilingual high school for gifted chil- duty “to protect my boss.” since 2014 while the inflation rate is dren, a kindergarten and an elemen- When early this year Jokowi 3.20% in August. This shows that the tary school. He is also the founder handed over official deeds to government has managed to maintain of the Luhur Bakti Pertiwi Founda- landowners and senior politician stable prices. tion, which nurtures young Indone- Amien Rais dismissed the move “We are lucky that Indonesia is sian talents. In 2011 Luhut received as “fake”, Luhut immediately shot holding the meetings as the infra- Ernst & Young’s Entrepreneur of the back. “Who does Amien think he structure the government has im- Year Award in the Social Develop- is? I know his track record, it is not proved will benefit many. In fact, ment category. exactly unblemished. So, don’t talk this includes several schools in Bali, In tandem with his venture much because if you do we will dis- Banyuwangi and Lombok as they will into business, Luhut entered poli- close all,” he said in a strong public be recipients of over 400 computers tics as deputy chairman of Golkar statement that to this day still re- used in the event,” he said at the con- Party’s advisory board. In 2014, he verberates. clusion of our one-hour meeting. F

42 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 43 IMF-WORLD BANK MEETINGS 2018 JOHN G. NELMES J

John G. Nelmes, IMF Senior Resident Representative for Indonesia, has nothing but praise over the way the government prepares this month’s IMF-World Bank meetings in Bali. He also gave high marks to ministers who are grappling with the rupiah’s volatility against the U.S. dollar. “Indonesian officials are doing all the right things to deal with the matter,” said the Canadian-born career IMF official in a recent interview with Forbes Indonesia. Nelmes came to Indonesia in Septem- ber 2016. He is expected to be here for another two to three years, he said, giving him the chance “to see more of this beau- What are the issues that the IMF will tiful country.” bring to the meetings? BY TAUFIK DARUSMAN We’re very pleased and honored that Indonesia is hosting the IMF’s Annual Meetings in Bali. This will put Indonesia at the center of the world’s economic stage and allow it to showcase its growing importance “INDONESIA’S and voice in the global economic policy dialogue, as well as the on- going economic, social and human ECONOMY developments that have taken place in Indonesia in recent years. The meetings bring togeth- IS DOING WELL.” er around 300 Finance Ministers and Central Bank Governors from COURTESY OF JOHN G. NELMES COURTESY

44 | FORBES INDONESIA OCTOBER 2018 the IMF’s 189 member countries. which will outline some broad per- that are key for raising the econo- They’ll attend the annual Board of spectives to foster fintech’s poten- my’s growth potential. Spending on Governors and policy committee tial benefits and mitigate its possible energy subsidies is increasing, but meetings of both the IMF and the risks. We are also organizing a series these aren’t well targeted. Finally, World Bank, and meetings among of seminars related to women in financial deepening remains an im- international country groups such the workplace, youth employment, portant objective to help reduce re- as the G20. And equally important, social protection and the future of liance on external financing. they will be joined by development work, how global trade can promote The good news is we believe In- Ministers, representatives of civil growth for all, leveraging policies donesia has the appropriate tools to society, parliamentarians, the pri- for sustainable development, the address these challenges and sustain vate sector, academics and other ob- future of finance, and growth chal- and even raise economic growth servers to discuss on-going issues of lenges for Asia to remain at the fore- over the medium term. Public debt global concern. front of the global economy. levels and the budget deficit are At the same time, Indonesia will low by international standards, and host a gathering of ASEAN Leaders What is the IMF’s view on Indone- the budget plans to raise revenues to share their experiences with the sia’s economic prospects? and spending in critical growth-en- IMF and the World Bank in devel- Indonesia’s economy is doing hancing and social areas. Monetary oping strong growth and economic well. We are projecting growth to be policy has been very proactive in fundamentals over the last decade. around 5.1% this year, and slightly responding to external pressures by Many important issues will be higher next year, led by investment rising interest rates, while allowing on the table for discussion, particu- and recovering consumption. Infla- the exchange rate to move and act as larly as the global economy seems to tion is projected to remain low and a shock absorber to these pressures. be entering a period of flux. Global stable around 3.5%. The current ac- Indonesia’s youth and expand- growth appears to have plateaued count deficit has widened, although ing labor force, as well as the rapid while becoming less even, with to some extent this reflects higher expansion of the digital economy, the U.S. economy growing strongly imports for infrastructure investment, represent opportunities for higher supported by expansionary fiscal which should help to raise the econo- growth. policy, and other major countries’ my’s growth potential down the road. Steps to increase foreign direct growth rates easing. At the same While the overall outlook is investment and improve the busi- time, downside risks to the outlook positive, there are challenges ahead. ness environment are reform areas are rising, including from possible These come both from the external that could be accelerated to protect abrupt shifts in global financial con- side as well several domestic fac- investor confidence and differenti- ditions as U.S. interest rates increase tors. Externally, the tightening of ate Indonesia from other emerging and the U.S. dollar appreciates, and global financial conditions due to market economies. capital flows retreat from emerg- higher U.S. interest rates and dollar ing market countries. The threat of strength could be bumpy if mar- What is the IMF’s view on the ru- a systemic increase in trade tensions kets suddenly revise their expec- piah’s continuous fall against the is another important downside risk tations about the speed of interest U.S. dollar? to the outlook, and challenges from rate increases, or if there is a sudden It’s true the rupiah has depre- inequality, climate change and geo- decline in risk appetite, from ris- ciated against the dollar, however political risks remain. ing trade tensions for example. This it’s important to look at this from a The Annual Meetings provide could cause global financial market broader perspective. The U.S. dollar a chance for attendees to discuss volatility that would impact emerg- has been strengthening on a global policy solutions related to poverty ing market countries. basis, appreciating by almost 10% eradication, jobs and growth, eco- Domestically, Indonesia has this year against a basket of major nomic development, and aid effec- a relatively low tax revenue base, trading partners. To a large extent tiveness. To give a few examples, we which constrains its ability to spend this is a natural adjustment process are planning to discuss what we’re more in important areas such as due to tighter global financial condi- calling the Bali Agenda on Fintech, health, education and infrastructure tions, following the normalization of

OCTOBER 2018 FORBES INDONESIA | 45 IMF-WORLD BANK MEETINGS 2018 JOHN G. NELMES

monetary policy in advanced econo- policy advice for the government to family members with them and will mies, particularly the U.S. where the foster inclusive growth and econom- stay on to enjoy the beauty of Indo- Fed is raising rates as the economy ic stability. nesia’s many tourism destinations is growing above its longer run po- We also provide technical as- after the meetings. tential and we are starting to see sistance and training for public of- The overall economic impact of inflation inch upwards. ficials to support the government’s the Annual Meetings will be much Higher interest rates in the U.S. larger than have resulted in a decline in capi- these di- tal inflows not only to Indonesia, rect expen- but to emerging market countries INDONESIA’S ECONOMY ditures, more broadly. Bank Indonesia has however, responded well with several rate IS DOING WELL OVERALL, because hikes, and by allowing a gradual hosting the depreciation of the Rupiah against WITH MORE INTERNATIONAL meetings the dollar. will bring What is interesting, and some- investment times overlooked, is that the Rupiah RESERVES, LOWER opportu- has remained relatively stable when nities and measured against a basket of the INFLATION AND LOWER DEBT tourism to currencies of Indonesia’s main trad- Indone- ing partners. So, Rupiah flexibility sia lasting against the dollar has in fact facili- COMPARED TO THE PAST. for many tated a broader measure of exchange years. rate stability. It’s in this sense that effort to improve public institutions Without a doubt, the meetings will the exchange rate has acted as a and strengthening human capac- strengthen Indonesia’s reputation shock absorber that will help main- ity in the areas of taxation, budget as a leading global destination for tain overall economic stability. expenditure management, monetary conferences and visits by project- Indonesia’s economy is doing and exchange rate policies, banking Indonesia as a safe, capable, and well overall, with more interna- ing and financial system supervi- well-organized venue for hosting tional reserves, lower inflation and sion and regulation, and economic high-level meetings. lower debt compared to the past. statistics. The staff of the IMF are par- Having said all of this, it’s impor- ticipating in a coral transplantation tant for the government to continue How large is the IMF delegation event during the meetings, where we closely monitoring the impact of a and its financial contribution to the are partnering with an NGO in Bali weaker Rupiah against the dollar on meetings? and the Ministry of Maritime Affairs corporations’ exposure to U.S. dollar We are expecting around 15,000 to help rebuild a reef in Nusa Dua. denominated debt. people to attend the Annual Meetings. The idea is to do something that has The IMF itself is expected to bring lasting positive benefits to the envi- How much does Indonesia owe, if around 300 participants from vari- ronment and the livelihoods of Indo- any, to the IMF? ous departments. Typically, over one nesians, and we will be providing a Indonesia doesn’t owe anything thousand seminars and meetings take grant for the activity. to the IMF, there are no outstand- place during the Annual Meetings. The IMF and our staff are also ing loans. The last time Indone- The IMF will be paying for ac- donating to Indonesian NGOs to sia borrowed from the IMF was in commodation of its participants, and support the recovery efforts and hu- 2000, and this was fully repaid in providing computers and other hard- manitarian needs that resulted from 2006. Our engagement with Indo- ware for the meetings, which will be the tragic earthquake that struck nesia consists of economic policy donated to serve the people of Indo- Lombok. We hope that, at least in discussions with officials and vari- nesia once the meetings are com- some way, this will help those in ous other stakeholders to formulate plete. Most participants are bringing need directly. F

46 | FORBES INDONESIA OCTOBER 2018 INVESTMENT IDEAS TEGUH HIDAYAT

TEGUH HIDAYAT IS AN INDEPENDENT INVESTOR IN INDONESIAN STOCKS, AND FUND MANAGER. SINCE 2009, HIS SPECIALTY IS VALUE INVESTING, TRYING TO FIND PROSPECTIVE INVESTMENTS AT THE LOWEST POSSIBLE PRICE. TEGUH IS ALSO A REGULAR COMMENTATOR IN THE MEDIA, HAVING APPEARED IN BISNIS INDONESIA NEWSPAPER, KONTAN NEWSPAPER, IDX CHANNEL, AND METRO TV.

INVESTMENT OPPORTUNITY IN ‘CONSUMER GOODS’ STOCKS

WHAT industries offer sets. PBID’s revenue, Rp986 billion in the first quarter consistent profits and long- of 2018 or almost Rp4 trillion in one year, is double term growth in Indone- the company’s total assets. Historically, PBID’s rev- sia? That’s right, consumer enues, net income and equities rise steadily from year goods! So, if you are look- to year. Unless the government sets an environmen- ing for stocks to be kept tally friendly policy and bans the use of conventional for 5–10 years or longer, plastic bags, we have one investment opportunity in the best choices are stocks the plastic & packaging sector. in the sectors of food PBID is a market leader in its industry with 46.5% and beverage, cigarettes, market share, and their brands of plastic bags such One of the criteria pharmaceuticals, cosmet- as ‘Tomat’ and ‘Sparta’ are also quite popular. Its bal- of a ‘wonderful ics, and financial services, ance sheet is fairly ‘clean’ without odd accounts such company’ is if the especially banking. The as gains or losses in currency exchange, its debt is company’s sales in companies sell its products small and the net income is in accordance with the and services directly to the cashflow. The company has also already paid divi- one year is larger people en masse. dends for fiscal year 2017 (although the company than its assets. And as long as the pop- only went public in December 2017). ulation continues to grow, PBID’s management is clearly traditional: make the net asset value of the companies in these sectors products, sell them, and share the profit equally among will also grow. As they sell their products to the public, all shareholders. After its listing at the initial price of ‘the power of brand’ allows one company to have ad- Rp850, the shares moved normally and rose gradually in vantages over the others, while companies with popu- line with the company’s fundamentals. When the com- lar brands usually have better financial performance pany’s IPO proceeds reached Rp319 billion, the money over the others in the same industry. was used for working capital and factory expansion. However, because of the belief that the companies All of the above factors indicate that PBID, a rela- will post consistent profit every year, the valuation of tively a small company with a market cap of Rp2 tril- shares in the consumer goods sector is relatively high lion (about $145 million) at a price of Rp1,100 per compared to those in the other sectors. Even if there share, can be expected to continue to book profits year are consumer shares whose valuations are low, its after year. As such, the shares are very suitable for fundamentals are usually poor. But what if I tell you long-term investment. The bonus is, with PER 6.6 and there is a non-consumer company with lower stock PBV 1.5 times at a price of Rp1,100, obviously its stock valuations but good fundamentals and also offers valuation, which is still very cheap for its fundamental long-term investment prospects? performance and prospects. The company is PT Panca Budi Idaman, Tbk PBID might take a while to rise as its shares are not (PBID), a manufacturer and distributor of plastic bags too liquid, and the company is not yet publicly known. for food packaging, groceries and others established As long as its performance continues to grow, and in 1979. Normally, a chemical manufacturing company most likely it will, the stock is ideal for long-term in- (plastics are made from chemicals) such as PBID is not vestments. If you are looking for a ‘casual stock’ whose promising as they import raw materials. This exposes movements do not fluctuate, I present you: PBID! F it to foreign exchange risks. Also, they sell their prod- Full Disclosure: When the analysis was written, the ucts to other companies and not to end users. author is in a position of holding PBID stocks at an One of the criteria of a ‘wonderful company’ is if average purchase price of Rp945 per share. This posi- the company’s sales in one year is larger than its as- tion could change anytime without prior notice.

OCTOBER 2018 FORBES INDONESIA | 47 FORBES INDONESIA TECHNOLOGY PASARPOLIS Dealing with Risks

Insurtech Pasarpolis offers insurance to all at a price cheaper than a cup of coffee.

BY MARELLA PUTRI

ot just any company can attract simultaneously the nation’s three largest unicorns to a strate- Ngic partnership, but that is exactly what Pasarpolis achieved: a series-A funding of estimated $5-8 million investment from Go-Jek, Tokopedia and Traveloka. Starting as an insurance comparison site, Pasarpolis has grown into an insurance technology (insurtech) startup offering microinsurance. The aim is to solve the protection gap by focusing on middle- to-lower income market through affordable insurance. “Our mission is to maximize technology in democratizing protection to everyone, providing microinsurance and educate the importance of insurance among Indonesians. We are really redefining insurance by making it very simple and convenient for customers,” said Cleosent Randing, 31, Founder and CEO of Pasarpolis. He founded Pasarpolis in 2015 after noting the low penetration and awareness of insurance in Indonesia. claims processes using technology lieved that people here shun insur- Thus, the company’s tagline of ‘in- and invites people – particularly the ance as they perceive it as being surance for all’. middle-to-lower classes – to have complicated and expensive. With the Pasarpolis simplifies insurance better access to insurance. It is below insurance penetration rate in In-

48 | FORBES INDONESIA OCTOBER 2018 “Our mission is to maximize technology in insurable hits monthly. Pasarpolis is also working with democratizing protection to everyone, providing government-run social security BPJS microinsurance and educate the importance as its only online partner where of insurance among Indonesians. We are really people can register or pay for the redefining insurance by making it very simple and product through provider Telkom- sel, where subscribers can pay using convenient for customers,” said Cleosent Randing. e-money T-Cash. It is also in discussion with national airline Garuda In- donesia at only 2.9%, Pasarpolis sees help insurance partners operate bet- donesia on the same issue. huge growth potentials in the sector. ter. Secondly, to have more ecosys- Encouraged by being the larg- The products offered are tailored tem partners with the aim to grow est insurtech in Southeast Asia and to cater to various needs of both from the current number of 10 to 30 following in the footsteps of Gojek’s customers and merchants across by the first quarter of 2019. In the expansion in the region, Pasarpolis Pasarpolis’ ecosystem partners. For larger scheme of things, it shows has established offices and partnered example, some popular ones are life- how insurtech can help address the with local insurance companies style products which include ship- socio-economic barriers of insur- along with local ecosystem partners ping returns, extended warranty, and ance, create valuable opportunities in Thailand and Vietnam, which al- purchase protection on e-commerce. for ecosystem partners, and at the lows them to target and service the Meanwhile for Go-Jek, protection is same time satisfy customers. market better. They plan to start op- also available to the drivers and their Currently, Pasarpolis is working erating by this month. belongings ranging from jackets, hel- with 30-40 traditional insurance com- Looking ahead, Cleo believes mets, phones, and even customers’ panies. Even though Pasarpolis takes that as digital businesses are on the food in case of an accident. much lower fees compared to what rise here, it is only a matter of time Another is travel insurance claim insurance agents normally get, the before Indonesia will be on a par for flight cancellation on airlines/ scheme works well for both parties. with China: around one-fifth of its online travel agency. In partnership No agents will talk and offer Rp population is insured and that in- with Citilink, it insures up to one 5-10 million insurance policies to un- surtech makes most of its revenue million passengers per month. Upon derinsured people like low-income from e-commerce. For example, filling up the online flight form, one Gojek drivers or farmers. By us- Zhong An, which is backed by three needs only to tick the insurance oping our technology, however, these giant Chinese technology compa- tion provided below, which is priced people can now have access to insur- nies, has a market capitalization of as low as Rp 25,000, to have them- ance. So, it does not alter nor replace $18 billion. This is why the role of selves registered. In a situation the role of insurance agents. Rather, ecosystem partners is important, where a flight is delayed, the news it improves the accessibility of insur- forcing Pasarpolis to be selective in will be sent from the responsible ance to more people. seeking partners. From the recent airline’s system to Pasarpolis’, which By the second quarter of 2018, investment, Pasarpolis will be able will then trigger an SMS/email noti- Pasarpolis already has 1.25 million to learn how the unicorns’ have fication sent to the claimant’s phone customers, which is a 400% rise from been servicing their ecosystem and along with fund compensation. The around 200,000 customers in the sec- thereby adding more services ben- instant process therefore conve- ond quarter of 2017, 250,000 of whom eficial to potential customers. niently eliminates the tedious tradi- subscribe voluntarily from the strate- “In other markets except Indo- tional way of reporting and submit- gic partnership with Gojek by paying nesia, most ecosystem partners have ting claims and waiting for weeks to an average of Rp 7,500 every month. insurance technology. So, the chal- receive the refund. Thanks to nearly 90% digitally han- lenge now is to educate ecosystem Pasarpolis allocates the bulk of dled claims management, Pasarpolis partners like the OTA and e-com- the unicorns’ investment for two can reduce its overhead and opera- merce to understand the value of in- main purposes. Firstly, to provide tional expenses significantly. More surtech that can drive customer sat- simple claim services that can cope potentials are to be gained from every isfaction and increase revenue, and with the speedy system of notifica- single transaction of their partners at the same time also enable us to tions for numerous customers as such as Traveloka, Tokopedia, and deliver more insurance to people,” F AGOES RUDIANTO FOR FORBES INDONESIA FORBES FOR RUDIANTO AGOES well as utilizing their big data to JD.id as they have around 200 million said Cleo.

OCTOBER 2018 FORBES INDONESIA | 49 FORBES INDONESIA TECHNOLOGY HEARTFLOW

ohn Stevens’ corner office in Redwood City, Cali- fornia, has a niceJ view of the San Francisco-Oakland Bay Bridge. His desk, though, is a hand-me-down, and the cracked leather up- holstery on the chairs reveals their history as Ikea floor models. “We can probably afford some new chairs now,” he says. You’d think. Heart- Flow, the health-tech startup of which Ste- vens is chief executive and president, has raised $467 million, most recently at a $1.5 billion valuation, from investors such as Wellington Man- agement, Baillie Gifford & Co., GE Ventures and BlueCross BlueShield Ventures, according to Pitchbook. The valuation is based on a big idea: a noninvasive test that peers into a patient’s coronary arteries to see how blocked they are.

Right now, such a test involves threading a catheter from the groin up to the heart and measuring blood flow, a slightly risky procedure called fractional flow reserve (FFR) that is done a million times a year worldwide to Breaking decide whether a patient needs a stent to open a clogged artery. Using software trained with a deep-learning al- gorithm, HeartFlow says it can get a similar measurement from a CT scan, a lower-risk, three-dimensional Hearts picture of the heart constructed with X-rays. Medicare reimburses HeartFlow $1,450 per test. HeartFlow has raised $467 million for a test “This will be the most effective way of looking at to detect heart disease. Problem: It might cardiovascular disease and safer than anything else on not make patients better off. the market,” says Bill Weldon, HeartFlow’s chairman and the former chief executive of Johnson & Johnson. BY ELLIE KINCAID “And when you put those together, it’s a combination

you can’t beat.” He sees the test being used routinely. FORBES FOR TIM PANNELL

50 | FORBES INDONESIA OCTOBER 2018 the 1990s was studying how wind a more recent comparison to a sham coursed over the wings of fighter jets. procedure raised doubts that they are Could the same mathematics explain better than medication. So does using blood moving through the heart? He HeartFlow prevent unnecessary pro- hooked up with Christopher Zarins, cedures or cause them? the chief of vascular surgery at Stan- For every $1,450 test, HeartFlow ford’s School of Medicine, earning a says, it prevents $4,000 in costs. But Ph.D. for the cardiology work and be- “do patients live longer and have coming a professor at Stanford him- fewer heart attacks when you do this self. Together, they founded Heart- approach, as opposed to something Flow in 2007. more routine?,” asks Venkatesh Mur- Taylor, HeartFlow’s chief tech- thy, a cardiologist at the University of nology officer, did a study of his early Michigan. Indeed, do patients need a software on a dozen patients in Lat- cardiac flow measurement at all? via and raised $2 million in venture “I don’t wake up in the middle of capital. Stevens had been inspired the night thinking can we do an FFR to become a surgeon as a boy, after a in more people,” says Ethan J. Weiss, pitchfork went through his toe, but a cardiologist at UC San Francisco. quit his job doing heart operations for Then there are technical doubts. the startup life two decades ago. He HeartFlow calculates flow by look- joined Taylor in 2010. ing at the shape of a blood vessel, In a 2014 study, HeartFlow’s as one might guess the speed of a software analyzed the CT scans of stream from the shape of its banks. 254 patients, matching FFR 84% of “Trying to measure FFR from a CT the time in detecting a clog and 86% scan is like trying to run a marathon when blood was flowing freely. Later on one leg,” says Darrel Francis, a that year the FDA approved Heart- professor of cardiology at the Na- Flow’s software as a medical device tional Heart & Lung Institute in the to evaluate the symptoms of coronary U.K. According to a report in JAMA artery disease. Cardiology, analyses that used CT HeartFlow CEO John Stevens at the Experts use the HeartFlow test scans to measure flow, including but Grand American Hotel in Salt Lake City. mainly in ambiguous cases. Hank not limited to HeartFlow, were much He says he quit being a heart surgeon because he could help more people as Plain, 60, a healthcare investor who less accurate in sicker patients. an entrepreneur. focuses on medical devices, got a CT HeartFlow says the report is “funda- scan that showed calcified plaque mentally flawed.” in his coronary arteries, but a stress There are also many believers, Skeptics are legion. “Over time, test (a walk on a treadmill with like Robert D. Safian, a cardiologist these kinds of technologies get electrodes on his chest) indicated at Beaumont Health in Royal Oak, hyped, and when they get studied, no problems. Then a CT scan was Michigan, who has received $3,000 reality sets in,” says Steven Nissen, put through HeartFlow’s software, from HeartFlow for travel. “Initially, the chairman of cardiology at the which revealed two partial block- I was one of the worst skeptics, but Cleveland Clinic. “Someone takes an ages. His doctor decided to insert now I’m completely converted and idea that seems very sexy and attrac- two stents. “It’s very scary to know I think it’s amazing technology,” he tive, but when you get down to the you have coronary artery disease, says. He’s used HeartFlow for the science, it isn’t solid.” knowing it played out with other past three years on 2,000 patients. The technology’s usefulness may family members,” Plain says. “It’s Most large U.S. insurers pay for come down to a deeper question: How good to be back, focused on life.” HeartFlow’s test, as does the ever- effective are stents for treating heart An open question is when stents skeptical U.K. National Health Ser- disease, and do you even need to know are worth their cost and risk. They vice. Medicare is paying for it except whether an artery is open or not? save lives when placed during a heart in the western U.S. Says Stevens, the HeartFlow was started by Charles attack and ease chest pain. But a chief executive, “At the end of the Taylor, who as a Ph.D. student in 2,287-patient study a decade ago and day, the data will win.” F

OCTOBER 2018 FORBES INDONESIA | 51 FORBES INDONESIA TECHNOLOGY E-CASH Where E-cash Is King China’s fintech giants are consolidating their gains and using their capital heft.

BY SARA HSU

Demand for digital payments by Chinese consumers has been massive.

hina has experienced a WeChat Pay is not part of a subsidiary, startups, by some accounts, has al- fintech explosion in re- it continues to reap funding from Ten- ready slowed. This means that, despite cent years, with top com- cent investors. Tencent (see p. 45) is a China’s slowing economy, these firms panies dominating the juggernaut whose Hong Kong Stock have the means to continue growing. industry.C It’s not an accident that Exchange shares, even after a recent It’s not just about money, however. Alibaba spinoff Ant Financial and dip, have risen 100-fold since its IPO These firms have hit the mark when it Tencent rule digital payments, or in 2004. Its market cap reached a high comes to meeting pent-up demand for that Yirendai and Lufax are major of $577 billion in January. Credite- their fintech services. For Ant Finan- players in the online lending sector. ase’s peer-to-peer lending company cial’s Alipay and Tencent’s WeChat All of these companies have gar- Yirendai is also listed, on Nasdaq with Pay, that demand for digital payments nered large amounts of investment, a market cap of $1.2 billion. Ping An- has proved to be massive, as Chinese expanded into areas with high levels affiliated Lufax has reportedly post- consumers require faster and safer of demand and have successfully di- poned a possible listing in Hong Kong transactions. Both applications have versified out of their core business. but was said to be targeting another other beneficial features. With Alipay, Ant Financial is not yet publicly funding injection of $2 billion. users can obtain consumer or seller listed, but it received Series C funding All of these companies have plenty loans, credit that is often unavailable of $14 billion in June. While Tencent’s of capital, even as funding for smaller via banks. Alipay can be used for of-

52 | FORBES INDONESIA OCTOBER 2018 fline or online purchases, particularly successful in filling a demand gap. borrowers. These borrowers likely will on Alibaba’s e-commerce websites. Again, many consumers and small turn to the likes of Yirendai and Lufax. WeChat Pay offers WeChat users the businesses have a hard time obtain- Finally, all of these firms have ability to send money to one another ing loans from China’s formal finan- diversified out of their core busi- even if they don’t have a bank account. cial sector—namely, from banks. They nesses into areas that successfully WeChat Pay can also be used offline are often forced to borrow on the curb complement and add value to their and online, such as to purchase goods market at very high interest rates. mainstream activities. Ant Financial pushed by WeChat. With the advent of peer-to-peer (P2P) has Alipay and also offers a wealth- Chinese regulators, increasingly lending companies, smaller borrowers management product called Yu’e Bao, concerned about potential risks to with little to no collateral have found which has become the world’s largest the financial system, imposed a series themselves able to borrow for the first money market fund, drawing cus- of curbs that will crimp the compa- time. The P2P lending sector is go- tomers seeking better returns than nies’ revenue streams and curtail their ing through a regulatory shakedown, what savings accounts typically offer. rapid pace of expansion. For example, as riskier companies with Ponzi-like The combination of Alipay and Yu’e both Alipay and WeChat Pay are now business models are shut down. The Bao has helped Ant Financial attract required to process payments through larger firms, like Yirendai and Lufax, customers to its financial services a central clearing account, and the have shown their compliance with the that help them both spend and save. payments they receive have to be new regulations, which require open- Tencent has added digital content deposited at commercial banks in ac- ing a custodial account for funds and and membership subscriptions sold counts that pay no interest. Previously, company registration. The crackdown through WeChat. Yirendai and Lufax they had generated interest income is likely to drive off some lenders as- both offer wealth-management prod- from the payments they were holding sociated with the smaller firms, but it ucts in addition to loans, giving Chi- in their own escrow accounts. would be impossible to eliminate the nese investors more alternatives for Yirendai and Lufax have also been high demand for funds among small where they can park their money. F

OCTOBER 2018 FORBES INDONESIA | 53 FORBES INDONESIA TECHNOLOGY BITMAIN

main by applying price-to-sales ratios from comparable companies including Nvidia, AMD, Qualcomm, Mediatek and Cisco. It is important to note that there Crypto Boss are no directly comparable companies The mining billionaire no one has heard of. given the unique nature of Bitmain. We picked these companies because BY JASMINE TENG they are also fabless chip makers, companies that design and sell chips and hardware but outsource production to other manufacturers, according to Daiwa Capital Markets analyst Rick Hsu’s guidance. Bitmain is not purely a semiconductor company; a portion of its revenue is also derived from its mining pools, BTC.com and Antpool. And given the novelty and volatility of the current cryptocurrency industry, the application of these mining chips is uncertain, according to Mark Li, a senior technology analyst at Sanford C. Bernstein & Co. Brett Simpson of Arete Research noted that Bitmain should be viewed as an early-stage version of Cisco, when there was plenty of uncertainty in the future of IP. Despite his role as the technical backbone behind Bitmain, little is known about Zhan, an engineer who developed the custom application- specific integrated circuit (ASIC) chips ith rumors, controver- that have propelled the global growth sy and news buzzing of the largest crypto-mining chip pro- about its upcoming ducer. Even his LinkedIn profile is IPO, Chinese crypto- stark, listing only “CEO at Bitmain” and Wcurrency-mining chip firm Bitmain has nothing about prior jobs or education. been thrust into the spotlight in recent Here’s what we know so far. After months. Jihan Wu, Bitmain’s cofound- graduating from Shandong University er and co-CEO, has gotten most of the with a degree in electrical engineering media coverage, largely because of his in 2001, Zhan received a master’s in en- prominent online social presence. gineering from the Chinese Academy of Meanwhile, Micree Zhan, Bit- achieve a $14 billion market capitaliza- Sciences’ Institute of Microelectronics main’s other cofounder and co-CEO, tion once it offers shares to the public, in 2004. He went to work at Tsinghua has kept a much lower profile but according to its pre-IPO investor ma- University as a research and develop- owns a much bigger stake in Bitmain terials. That would make Zhan’s stake ment engineer at the Research Institute than Wu does. Zhan is Bitmain’s tech- worth at least $5.1 billion and Wu’s of Information Technology. nical mastermind and owns 36.58% stake worth nearly $2.9 billion. In 2006 he began a new job as the of the company, while Wu’s stake is Forbes isn’t so bullish. After talking head of research and development and 20.5%, according to the leaked pre- with analysts, we estimate Zhan’s net manager of the integrated circuit de- IPO investor decks. The Beijing-based worth at around $4 billion and Wu’s at partment at Chinese company Unitend company is confident that it will close to $2.3 billion. Forbes valued Bit- Technologies, which specializes in cir-

54 | FORBES INDONESIA OCTOBER 2018 cuit design. At Unitend, Zhan oversaw China Grand Prosperity Investment Wikipedia page about bitcoin and the design and development of specific from 2010 to 2013 before he cofound- promptly agreed to join the venture, chips for digital television; the ship- ed Bitmain. A cofounder of 8BTC, a Bloomberg reports. ment volume of these chips exceeded China-based Bitcoin forum launched in Four years later, in 2017, Bitmain one million during his time there. He’s 2011, Wu is reportedly the first person brought in $2.5 billion in revenue, pre- also published numerous papers and to translate the bitcoin white paper— dominantly from sales of its crypto- patents about circuit chips and helped the original report written by Satoshi currency-mining equipment, accord- write the national standard for univer- Nakamoto that explained the funda- ing to the investor decks. In the first sal transport interfaces, a protocol used mentals of bitcoin—into Mandarin. He quarter of 2018 alone, Bitmain had in digital television devices. In 2010 also drew attention to himself in 2016 $1.9 billion in revenue. The company Zhan founded DivaIP Technologies, when he tweeted a vitriolic response to hopes to complete its IPO on the Hong a Beijing-based startup to develop TV someone who criticized his support for Kong Stock Exchange before the end set-top boxes. He met Wu by chance Bitcoin Cash. of the year, but little is known thus far. when the startup was canvassing the In 2013, Wu approached Zhan This could be a monumental step not streets of Beijing, and Zhan sought about founding Bitmain together. Wu just for Bitmain but also for the larger advice from Wu regarding funding, sought Zhan’s expertise in chip design cryptocurrency community. The in- Quartz reports. Though Wu was unable to develop the mining chips needed dustry has been attempting to nudge to help in that specific regard, the two for virtual currency mining. Mining its way back into the spotlight after would meet up again three years later. bitcoins and other cryptocurrencies a brief frenzy over cryptocurrencies The younger of the duo, Wu gradu- requires brute force that these ASIC that began at the end of 2017. After the ated from Peking University in 2009 chips provide, in order to solve the investor decks were leaked, however, with a dual degree in economics and complex math problems that verify uncertainty over mining-rig sales in psychology. According to his Linke- transactions on a blockchain. The 2018 have raised doubts over the fea- dIn profile, he worked as an invest- morning after their meeting, Zhan sibility of a $14 billion-size IPO. So ment manager at private equity firm spent two hours poring through the watch this space. F

OCTOBER 2018 FORBES INDONESIA | 55 AMERICA’S MOST INNOVATIVE—AND FEARED—BUSINESS LEADER IS COMING OFF A THREE-YEAR RUN THAT HAS MADE HIM THE RICHEST PERSON OF ALL TIME. NOW HE TELLS FORBES HE’S ONLY BEGUN TO GROW. CORPORATE AMERICA, YOU’VE BEEN WARNED.

BY RANDALL LANE

56 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 57 JEFF BEZOS

nlike America’s oth- adds the man whose company should er tech giants, Am- hit $210 billion in revenue this year. azon doesn’t have “But we just don’t have that issue.” “WHAT BEZOS a traditional cam- If Jeff Bezos is already the world’s HAS DONE pus. The 45,000 or most feared businessperson, the pros- so employees and pect of him “unconstrained” should IS PERHAPS executives in Seat- sober every corporate leader. Yes, THE MOST tle, out of 575,000 he’s ruthless and a master of the long worldwide, fan game, but Bezos’ greatest strength, REMARKABLE across numerous borne out over the past few years, has ACHIEVEMENT high-rises down- been his ability to shape-shift Ama- town and in the zon into adjacent businesses—some I’VE SEEN.” South Lake Union neighborhood. of which were adjacent only in retro- Amazon’s “headquarters” defaults spect—on a massive scale. It’s quan- to where Jeff Bezos, the company’s tifiable: Forbes has been ranking in- wants. Second, the scale that Ama- Ufounder and CEO, happens to be, cur- novative companies for eight years, zon needs for growth practically de- rently Day 1 Tower. Its name comes and we recently worked with a trio of mands aggressiveness. And, finally, by from a perpetual Bezos maxim: that, management professors to try to de- dominating retail and digital business relatively, we’re still at “day one” of termine the country’s most innovative services, both of which touch almost the internet—and, by extension, that business leaders (see p. 84). The four- every other industry, he’s now posi- Amazon is just getting started. prong methodology—incorporating tioned to move adjacently into just That’s getting harder to say with public reputation and influence, val- about any business where he finds a straight face, with sales, profits and ue creation and the premium that in- added value. He’s playing in the mul- the stock price all soaring, the latter up vestors assign to the chief executive— tibillions in at least four markets— 270% over three years and 103% in the places Bezos squarely at the top. healthcare, entertainment, consum- past 12 months. Amazon is closing in “What Jeff Bezos has done and er electronics and advertising—that on Apple to become the world’s most is likely to do is perhaps the most re- constitute many of the companies not valuable company, and Bezos, whose markable achievement I’ve seen,” already terrified of Amazon. It’s no personal net worth approaches $160 Warren Buffett told me last year, after coincidence that each of those four billion, has in the process become the I asked him, open-ended, to name the either hits or approaches the “tril- planet’s richest person, by far. most impressive business mind in his lions” potential Bezos alluded to. Nevertheless, Bezos talks about almost eight decades of market-watch- While his pioneering peers of the Amazon like it’s a giddy startup that ing. “Because he’s taken two very ma- first dot-com era embraced and popu- just closed its Series A. “For all prac- jor industries, and simultaneously, and larized the “open kimono,” Bezos has tical purposes, the market size is un- sort of under the nose of competitors, always viewed stealthiness as an asset, constrained,” says Bezos, his rolled-up he’s become in effect the leader and is masking new initiatives inside larg- sleeves showing off Popeye-like fore- redefining them and succeeding at re- er expenditures and feigning disinter- arms, the product of midlife weight ally big businesses.” est in burgeoning favorites. As Bezos’ training that has produced buzzed- Though Bezos and Buffett were public profile has expanded, public about results for the referring to retail and utter ances and interviews (despite his 54-year-old. His growth the cloud, Bezos is ac- ownership of the Washington Post) rationale comes from a tually unconstrained have become increasingly rare. Bezos “super-lucky” conflu- in far more ways. First, refuses to discuss Donald Trump, who ence: The retail market, thanks to AWS, the has taken to beating up on him and Amazon’s original quar- company famous for the Post on Twitter, but he clearly un- ry, is “many trillions,” emphasizing growth derstands he has a target on his back. as is, he says, the cloud over profitability is fi- When asked, as the head of an ascen- market that Amazon nally spitting out bil- dant advertising company, whether Web Services (AWS) pi- lions—and Bezos has he took any lessons from Facebook’s oneered. “There are dif- the market credibili- travails last year, his answer was suc- ferent businesses where ty to reinvest it in pret- cinct, political and inconceivable. the market is limited,” ty much any way he “No,” says this advocate for corporate

$8.7 $7.8 Billion Billion $4.7 $5.1 $4.8 Billion Billion $4.3 Billion $3.6 $1.6 $1.8 Billion Billion $1.2 Billion Billion Billion

YEAR 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Forbes 400 Rank 102 18 48 189 100 32 38 42 70 35

58 | FORBES INDONESIA OCTOBER 2018 learning, pausing for a few seconds to out some failure,” says Jeff Wilke, the $1581 underscore that he wasn’t going there. longtime Bezos lieutenant who runs Billion Ditto questions about becoming a data Amazon’s consumer and retail opera- company. “I’ve never really thought tions. “Those we sort of celebrate. In TO INFINITY of Amazon in that way,” says the man fact, we want them to occur all over who runs as data-driven a company the place. Jeff doesn’t need to review AND BEYOND as any, before reverting to his stump those. I don’t need to review those.” JEFF BEZOS’ NET speech. When it’s suggested that it’s But regarding the larger ideas and WORTH AND RANK ON THE FORBES 400 at least a tool, Bezos quickly inter- verticals—a.k.a. “one-way doors”— jects: “One of many tools.” that change the direction of the com- Nevertheless, during the morning pany, Bezos prides himself on playing he spent with Forbes outlining how “chief slowdown officer.” He’s look- he channels innovation and chooses ing for three things. First, originality. where to expand, a road map for Ama- “We have to have a differentiated idea. zon’s future emerged. Given Amazon’s It can’t be a ‘me too’ offering,” he says. size, it moves both vertically and hor- Second, scale. “We’re gifted with some izontally, each direction portending very large businesses we’ve built over a lot more disruption. Even five years time, and we can’t afford to put our en- ago, Bezos seemed content merely to ergies into something that if it works, try to sell everything to everybody, be- it’s still going to be small.” And, final- coming the bane mostly of retailers ly, a Silicon Valley-worthy ROI. “Even and wholesalers. But this master inno- at substantial scale, it has to have good vation artist now has the ultimate pal- returns on capital.” ette: any industry he chooses. Ultimately, the ideas that hit that troika, Bezos says, emanate from FOR THIS UNCONSTRAINED era, one of two models. Either by look- the most important word at Amazon is ing backward at customer needs—as yes. Bezos explains, correctly, the train we’ve noticed people act a certain ditional corporate hierarchy: “Let’s way, so let’s try to serve them with $81.5 say a junior executive comes up with a product. Or peering forward—we Billion a new idea that they want to try. They know how to do something valuable, have to convince their boss, their boss’s so let’s find customers. boss, their boss’s boss’s boss and so The Amazon juggernaut ultimate- on—any ‘no’ in that chain can kill the ly stems from the latter. Originally a $67 whole idea.” That’s why nimble start- niche player, Bezos could have easily Billion ups so easily slaughter hidebound di- focused just on becoming the world’s nosaurs: Even if 19 venture capitalists digital bookstore, the way crafts be- say no, it just takes a 20th to say yes to long to Etsy and shoes to Zappos get a disruptive idea into business. (now owned by Amazon, naturally). Accordingly, Bezos has structured But in mastering selling books, Bezos Amazon around what he calls “multi- saw that he could use those $47 ple paths to yes,” particularly regard- tools—from inventory manage- Billion ing “two-way doors”: decisions that are ment to recommendation en- often based on incremental improve- gines—to move adjacently: first ments and can be reversed if they into music and DVDs, then toys prove unwise. Hundreds of executives and electronics, then can green-light an idea, which employ- $30.5 ees can shop around internally. “He Billion knows and we know that you can’t in- $27.2 Billion vent or experiment with- $23.2 Billion $19.1 $12.6 Billion Billion $8.7 $8.8 Billion Billion

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 33 28 18 13 11 12 15 4 2 2 1

1BASED ON 8/27/2018 STOCK PRICE. OCTOBER 2018 FORBES INDONESIA | 59 APRIL 3, 1995 Books. First sale: Fluid Concepts and Creative APRIL Analogies: Com- NOVEMBER 2000 22, 2004 puter Models of Amazon Market- Jewelry: the Fundamental place: Third- $10,000 en- Mechanisms of party sellers start gagement Thought. selling everything rings to from cameras to $10 charm dollhouse furni- bracelets. ture on the site.

JUNE 11, 1998 Compact discs: more than 125,000 NOVEMBER 2, albums in 60 genres. 2005 Mechanical SEPTEMBER 22, 2003 Sporting Turk: micropay- goods: tennis rackets, electric ments to humans scooters, team jerseys. performing tasks computers can’t.

FEBRUARY 2, 2005 Amazon Prime: initially just free two- day shipping for $79 a year.

JULY 16, 2002 Amazon Web Services: renting computing power, database storage SEPTEMBER 7, 2006 Amazon and content delivery to Video: thousands of TV (mostly) small businesses. shows and movies, from Star Trek to Buffy the Vam- pire Slayer, to download. NOVEMBER 10, 1999 Home improvement (cement mixers, smoke detectors), software (Microsoft Of- NOVEMBER 7, 2002 Apparel: clothing from fice 2000, Photoshop), more than 400 brands, including Gap, video games (Game Boys, Nordstrom, Ralph Lauren and Eddie Bauer. Where in the World Is Carmen Sandiego).

‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

JEFF BEZOS logistical problems, and rather than had $17.5 billion in revenue. view those skills merely as accretive Even those customer-driven con- pretty much anything that can be to the core business, Bezos saw them cepts create skills-based dividends. sold at retail. And he again leveraged as businesses unto themselves. An in- Take the Kindle reader, Amazon’s that knowledge audaciously (and ternal need for part-time develop- first foray into hardware, back in successfully) in opening up Amazon ers led to Mechanical Turk, one of the 2007. Wilke, who came from Allied- as a platform for independent sellers, world’s first crowdsourcing gig mar- Signal, remembers protesting to the who were formerly competitors—ce- ketplaces. Building a staggeringly effi- board. “I spoke up and said, ‘I don’t menting his legacy as a transforma- cient delivery infrastructure led to the agree. I think we’re likely to miss our tive retailer, in the pantheon with the Fulfillment by Amazon service, and planned delivery date. Our yields are likes of Sam Walton, Aaron Mont- mastering how to take money for each gonna be too low. We’re gonna under- gomery Ward and Sears Roebuck’s purchase led to Amazon Pay. Most im- produce. We’re gonna frustrate cus- Julius Rosenwald. portant, as Amazon began building tomers. Hardware’s hard. We’re a This is where the story should have enormous capabilities to store its data software company.’ ended. But as the Western world’s in the cloud, Bezos figured out that “Jeff said, ‘Well, I’m willing to con- dominant online retailer, Amazon was other businesses might want to store cede that all those things will happen, also solving huge technological and their data there as well. In 2017, AWS and I still think that the right vision

60 | FORBES INDONESIA OCTOBER 2018 3,000 AUGUST 28, 2017 Whole Foods: forks over 2,000 $13.6 billion in cash for NOVEMBER 16, 2010 grocery chain. Amazon Studios: film and TV production. 1,000 Manchester by the Sea is first big hit.

500 JANUARY 2018 Amazon Go: NOVEMBER 19, 2007 new kind of store, with no Amazon’s Kindle checkout required, opens to ebook reader. public in Seattle.

THE AGE OF AMAZON 100 IN THE PAST 21 YEARS, AMAZON’S STOCK HAS RISEN A STAGGERING 98,000%—AS THE COMPANY JULY 22, 2009 WENT FROM HUMBLE ONLINE BOOKSTORE TO 50 Zappos: buys e- commerce shoe SELLING EVERYTHING FROM APPLES TO VIDEOS. retailer for just under $1 billion in stock.

JUNE 28, 2018 Pillpack: an- 2013 Amazon Fresh: nounces plans 10 grocery delivery to buy online service expanded to pharmacy; deal L.A. and San Francisco. hasn’t closed. 5

NOVEMBER 14, 2011 Kindle Fire: streaming access to 100,000 movies and TV shows. JUNE 23, 2015 Amazon Echo: first smart SEPTEMBER 15, 2008 speaker; uses virtual Motorcycles and ATVs. assistant Alexa.

‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

for our company is to be really good at going to be just time to learn a skill. It ployees, with the idea of creating a building hardware, so we need to get might take time for the thing to real- scalable, clonable model. It’s no small started learning.” And so they did. Kin- ly flower.” In other words, if you study thing: Those three companies employ dle is a romanticized product at Am- the skills Amazon is currently learn- 1.2 million. Add in their dependents, azon, both because of the hardware ing, you’ll have a fair idea of what it and it’s like running a pilot project for breakthrough and because it harks will soon be selling. everyone in Oregon or Connecticut. back to the company’s roots in books. And right now Bezos is learn- Bezos is adamant about Amazon’s It didn’t transform the company, ing about healthcare. It’s America’s intentions here. “This is a nonprofit though, and other hardware failures, biggest industry—18% of GDP—and initiative, as you guys know. It’s very like the disastrous Fire smartphone, one of its most inefficient. Last year, different,” he interjects, before even followed. But Bezos’ decision also Bezos, along with Buffett and JPM- a full question can be asked about it. eventually led to the Amazon Echo organ Chase CEO Jamie Dimon, an- Buffett, for his part, concurs, having smart speaker, a true game-changer. nounced that their three companies explained to me a few months ago: “We have a lot of hardware expe- would pool their efforts, hiring high- “We were deluged by people after the rience today, but back then we didn’t profile CEO Atul Gawande to lead a announcement who said, ‘We want to have those skills,” says Bezos, laugh- nonprofit initiative to deliver better join in.’ And we said, ‘You don’t have ing. “You have to be patient. It’s not care at a lower cost for their own em- to join in. Steal everything we get, if

OCTOBER 2018 FORBES INDONESIA | 61 JEFF BEZOS we get anything.’ ” The “if we get any- sphere designed to serve as something thing” is key. “Like Columbus leav- of a company commons—is a food ing, we don’t know where the hell store that pokes out from the bottom THE WORLD’S we’re going exactly,” Buffett added. of Day 1 Tower. Amazon’s $13 billion “But we hope there’s another conti- Whole Foods purchase last year is only MOST INNOVATIVE LEADERS nent out there and we don’t go off a the second-most-interesting grocery shelf at some point.” initiative at Amazon; the first is Ama- What did Thomas Edison have that But even if they do sail off the zon Go, an 1,800-square-foot experi- Nikola Tesla didn’t? Well, the lat- Earth, Bezos wins, as Amazon bur- ment in frictionless brick-and-mortar ter died penniless. And Edison had nishes its skills accounting for around purchases that opened in January. what professors Jeff Dyer of Brigham Young University and Nathan Furr of Go, a food store, might be the one fifth of the domestic econo- INSEAD business school call inno- my. While any breakthroughs devel- most Amazonian thing at Amazon. vation capital. Dyer and Furr have oped with Buffett and Dimon “would Bezos has always stressed frugali- ranked the leaders with the greatest still be inside that nonprofit enti- ty, and here are his employees (and innovation capital today by measuring ty,” Bezos says, “each of the compa- a few Seattle residents and tour- four essential qualities: reputation for nies can pursue their own initiatives.” ists) shopping for their lunches, buy- innovation (looking at media coverage Bezos has already started. In June, ing them from Amazon and in do- over five years), social connections and networks (on Twitter and Linke- Amazon agreed to pay almost $1 bil- ing so also providing the company dIn), track record for value creation lion for PillPack, a startup that deliv- reams of data to hone its skills. More (based on the market value growth ers pre-packaged daily prescription important, Go demonstrates what’s of their companies) and investor ex- envelopes. It’s everything that Ama- possible when different aspects of pectations for future value creation zon is good at: fulfillment, customiza- Amazon’s myriad operations come (measured by the premium investors tion and dependability. And it’s an- together. Go en com passes knowl- put on their companies’ stock). Here other toe in the healthcare pool. edge gained from purchases at Whole are the ten top finishers; Forbes will publish a full list of the 100 most in- Bezos is also going to school Foods; from Amazon’s increasingly novative leaders in 2019. in advertising. Amazon’s most re- sophisticated algorithmic and hard- cent quarterly performance revealed ware capabilities, in the form of AI, a startling number: Amazon is on camera and sensor technologies, and generate recurring subscription pace to exceed $8 billion in advertis- which combine to figure out what’s revenue (an estimated $10 billion in ing revenue this year—roughly dou- taken off the shelf (and put back) and 2017)—in a similar vein to warehouse ble last year’s total. And why not? who did the taking; and from Ama- clubs like Costco and BJ’s Wholesale. Google might know what you’re in- zon Pay, which seamlessly But as it grows, it’s surged into a way to terested in buying, Facebook might handles the transaction once the shower its 100 million-plus subscribers be able to deduce what you’d be in- company’s app registers the inputs. with perks and privileges. And those clined to buy, but Amazon knows Grabbing a chocolate milk here on perks create endless new adjacen- what you’ve actually bought, or even the way out feels like shoplifting—no cies and business lines. Prime explains whether you showed intent to buy. checkout lines, no scanning, no swip- why Amazon has started to encroach That raises all sorts of issues. ing. If healthcare and advertising on Netflix and is expected to spend $5 Bezos talks exuberantly about his represent huge expansion verticals billion on programming this year, in- consumer obsession, but there are on Amazon’s de facto vertical cam- cluding the highly touted Marvelous few customers who want to be tar- pus, Go brings together what’s possi- Mrs. Maisel. In just three years, “Prime geted with more ads. Bezos says the ble horizontally when Amazon puts Day”—an annual 36 hours of special trust that Amazon has built with its all the pieces together. deals just for members, with partici- customers will ensure the compa- The most important aspect of it pants spending billions on more than ny doesn’t cross a line—and that cus- all is Prime. At its core, it’s a market- 100 million products this July—has be- tomers, in turn, will give him the ben- ing tool, a way to encourage buying— come a shopping holiday with a ma- efit of the doubt. “It’s very valuable, nia surpassed only by Black Friday and and so you would never do anything Cyber Monday. Access to Prime is how to jeopardize it,” he says. “It’s what al- Amazon gets its outside retailers to pay lows you to expand the business.” If “TRUST IS more for Fulfillment by Amazon. Bezos can walk that line, it’s easy to Prime also underpins Amazon’s envision the Facebook-Google adver- WHAT ALLOWS brick-and-mortar strategy. Prime’s tising “duopoly” gaining a third ma- YOU TO same-day deliveries and pickups re- jor entrant. quire more physical beachheads, EXPAND THE which in turn help underwrite ex- WHEN YOU WALK AMONG the Se- BUSINESS,” pansion into all sorts of fields Ama- attle high-rises, the most interesting zon could never have justified, such building in Amazon’s neighborhood— BEZOS SAYS. as food, the kind of perishable prod- with apologies to a stunning new bio- uct that doesn’t fit into the classic Am-

62 | FORBES INDONESIA OCTOBER 2018 MOST INNOVATIVE LEADERS 1 2 3 4 5 Jeffrey Bezos Elon Musk Mark Zuckerberg Timothy Cook Satya Nadella AMAZON.COM TESLA MOTORS FACEBOOK APPLE MICROSOFT THREE-YEAR MARKET VALUE CREATION $450 BIL $48 BIL $376 BIL $369 BIL $278 BIL THREE-YEAR STOCK MARKET GAINS 366% 819% 563% 123% 84% INNOVATION PREMIUM 72.8% 79.7% 70% 12% 26%

6 7 8 9 10 Marc Benioff Shantanu Narayen Reed Hastings Jeff Weiner1 Larry Page/Sergey Brin SALESFORCE.COM ADOBE SYSTEMS NETFLIX LINKEDIN ALPHABET THREE-YEAR MARKET VALUE CREATION $50 BIL $68 BIL $78 BIL $16 BIL $491 BIL THREE-YEAR STOCK MARKET GAINS 143% 365% 1351% 96% 197% INNOVATION PREMIUM 82.4% 62.8% 71.5% 60% 37.5%

1RANKINGS INCLUDE CEOS OF COMPANIES THAT HAVE BEEN ACQUIRED IN THE PAST TWO YEARS. LINKEDIN WAS ACQUIRED BY MICROSOFT. azon model. After years as a book- about machine learning as opposed to works on, delegating the day-to- store killer, the company now has 16 a lot of other technologies is just how day business operations. Long-term permanent Amazon Books locations horizontal it’s going to be,” Bezos says. thinking has been Amazon’s hall- across 11 states. And Amazon recently “There’s not a single category of busi- mark, and the cash spigot from AWS opened a second Go in Seattle. “They ness or government or anything, really, empowers Bezos to keep running have to have something that’s special that can’t improve itself.” the retail juggernaut with near-ze- and new,” Bezos says. “And that’s what Even the much ballyhooed “HQ2” ro margins and unassailable efficien- you’re seeing if you’re paying attention second headquarters bake-off, which cies, as well as invest in far-flung ar- to our physical-stores strategy.” Amazon insiders continue to say will eas. “I very rarely get pulled into the Prime, in short, has become Am- be finalized by year’s end, speaks to today,” Bezos says. “I get to work two azon’s central nervous system, con- Amazon’s horizontal outlook. (Forbes or three years into the future, and necting everything in the company— is betting on Washington, D.C., where most of my leadership team has the and giving Amazon a path to expand Bezos already has a base and which same setup.” into new markets while also juicing has the talent, logistics and access to “Friends congratulate me after a its core retail business—without re- influencers; by shortlisting both the quarterly-earnings announcement ally being it’s own thing. “It can’t be Virginia and the Maryland suburbs, as and say, ‘Good job, great quarter,’ and a stand-alone business because it’s well as the District of Columbia, Bezos I’ll say, ‘Thank you, but that quar- completely tied in to our consumer can also play three governments with- ter was baked three years ago.’ I’m offering,” Bezos says. in one metropolitan area against each working on a quarter that’ll happen Similarly, as seen with Go, artifi- other for the best sweetheart deal.) In- in 2021 right now.” cial intelligence will increasingly con- creasingly, Bezos says, geography at It’s that mindset that has com- nect what previously seemed like dis- Amazon is becoming irrelevant. When panies in dozens of industries run- parate product lines, from cloud to separate teams need to work togeth- ning scared. “I come up with ideas. retail. Take the wildly successful Echo, er, “what you want is those two groups We could sit here with an idea, and I which has made Jeff Wilke’s existen- to have infrequent meetings and set a could fill this whiteboard in an hour tial question about Amazon—is it a road map of the future.” He adds: “If with 100 ideas,” Bezos says. “If I hardware or a software company?— you organize correctly, people do not have a week with no brainstorming moot. It’s an effective piece of hard- have to be in the same building or the meetings, I complain to my office, ware empowered by AI-driven soft- same city or even the same time zone, like ‘Come on, guys, help me here.’ ” ware, which drives Amazon’s retail because you can work off a road map.” Corporate America, take note—ei- sales, leverages Amazon’s content and And make no mistake, that road ther innovate or Jeff Bezos will do it so on. “The most interesting thing map is “pretty much all” that Bezos for you. F

OCTOBER 2018 FORBES INDONESIA | 63 LeaderBoard AMERICA’S TOP COLLEGES WE LOOKED for low student debt, high postgrad salaries, high graduation rates, proven career success and strong student satisfaction. For the full list of 650 schools, go to forbes.com/top-colleges.

1 (Rank) HARVARD UNIVERSITY (School) Cambridge, MA (Location) 9,915 (Enrollment1) $69,600 (Annual Cost1) 5% (Acceptance Rate11)

2 4 6 YALE UNIVERSITY MASSACHUSETTS CALIFORNIA New Haven, CT INSTITUTE OF INSTITUTE OF 5,472 TECHNOLOGY TECHNOLOGY Cambridge, MA Pasadena, CA $71,290 4,524 979 6% $67,430 $68,901 8% 8%

3 5 7 STANFORD PRINCETON UNIVERSITY OF UNIVERSITY UNIVERSITY PENNSYLVANIA Stanford, CA Princeton, NJ Philadelphia, PA 7,034 5,400 11,716 $69,109 $66,150 $71,715 5% 7% 9%

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8 10 12 BROWN UNIVERSITY DUKE UNIVERSITY GEORGETOWN Providence, RI Durham, NC UNIVERSITY 6,926 6,609 Washington, D.C. $71,050 $71,764 7,453 9% 11% $71,580 9 17% DARTMOUTH COLLEGE Hanover, NH 4,310 $71,827 11% 11 13 WILLIAMS CORNELL COLLEGE UNIVERSITY Williamstown, Ithaca, NY MA 14,566 2,093 $70,321 $70,650 14% 18%

18 14 UNIVERSITY OF UNIVERSITY OF CHICAGO CALIFORNIA, Chicago BERKELEY 6,001 Berkeley, CA $75,735 29,310 16 AMHERST 8% $65,003 COLLEGE 17% Amherst, MA 1,849 $71,300 14% 15 COLUMBIA UNIVERSITY IN THE CITY OF 19 NEW YORK POMONA 17 COLLEGE New York City BOWDOIN Claremont, CA 8,124 COLLEGE 1,563 $74,199 Brunswick, ME $69,725 7% 1,806 $68,070 9% 15% 22 UNIVERSITY OF MICHIGAN–ANN 20 ARBOR NORTHWESTERN Ann Arbor, MI 24 UNIVERSITY 28,983 SWARTHMORE COLLEGE Evanston, IL $62,176 Swarthmore, PA 8,791 29% 1,543 $72,980 $68,846 11% 13%

21 23 UNIVERSITY HARVEY 25 OF NOTRE MUDD JOHNS DAME COLLEGE HOPKINS Notre Dame, IN Claremont, UNIVERSITY 8,530 CA Baltimore, MD $69,395 842 6,042 19% $74,428 $69,863 13% 13% 66 | FORBES INDONESIA OCTOBER 2018 Daniels’ third bold move invited Purdue’s Bold Plan the most criticism from higher-ed Mitch Daniels wants to make college more affordable and purists. Last year he paid $1—yes, a dollar—to acquire the beleaguered for- increase his university’s enrollment. Higher-ed purists are aghast. profit, largely online Kaplan University from former Washington Post owner WAITING FOR MITCH DANIELS working-class Americans. Graham Holdings Co. Purdue instant- to pick up a call to his office in West Daniels believed Purdue wasn’t ly boosted its enrollment by 30,000 Lafayette, Indiana, you hear a record- fulfilling that mission. “The only costs Kaplan students—most of whom are ing of Purdue’s marching band followed that have outrun healthcare in the last female, between the ages of 30 and 60, by a hard-to-believe statement: “Purdue three decades are college tuition, room and the first in their families to go to has frozen tuition at 2012 levels through and board,” he says. His solution: Freeze college. They are now working toward 2019 for all undergraduate students.” student costs at 2012 levels. Purdue’s ad- degrees at the newly named Purdue Daniels, the president of Indiana’s missions staffers balked. “I said, ‘Look, I Global University. After Purdue covers flagship public university, then gets on just landed here on Mars, and I can tell operating costs and collects $50 million the phone and says something even you that the people back on Earth think in tuition, Kaplan is entitled to 12.5% of more startling: In inflation-adjusted college costs too much.’ ” Purdue Global’s revenue. dollars, Purdue costs $4,000 less per Attacking affordability from an- So far, so good. Applications are up year for out-of-state students than it did other angle, in 2016 he introduced in- 67% since Daniels became president. when he took the job in 2013. In-staters come-share agreements. Students who Enrollment is at an all-time high, as are pay nearly $3,000 less, at just under exhaust federal loans can fund their ed- alumni donations, graduation rates and $23,000 this academic year for tuition, ucation with an agreement to sign over the number of startups launched by Pur- room, board and expenses. a share of their future income, usually due researchers. Purdue also ranks No. Back in 2013, Daniels, now 69, between 3% and 5% for up to ten years 126 on Forbes’ list of America’s top colleg- dashed hopes that he would run for the after they graduate. (Repayments are es, up from No. 143 last year. While other Republican presidential nomination, capped at 2.5 times initial costs.) Critics institutions are cutting tenure-track jobs, signing on at Purdue instead after two hate ISAs because they’re unregulated Purdue has added 75 tenured engineering terms as Indiana’s popular moderate and untested. Milton Friedman is said professorships and increased the number GOP governor—and setting out to fix the to have invented the idea but famously of students earning STEM degrees by broken business of higher ed. His first noted that they were “economically 33% (minorities are up 50%). priority: make good on Purdue’s mission equivalent . . . to partial slavery.” Dan- Then there’s Boiler Gold, a craft beer iels says, “If you want indentured ser- as a land-grant university, a designation on which Purdue’s hops and brewing dating back to the Civil War, when the vitude, it’s the student-loan program. analysis lab is collaborating with a local federal government allotted land and With ISAs, the risk shifts entirely to brewer. “It started as a research project,” funds to universities that would teach the lender,” since grads who don’t find says Daniels, “and now we can’t make agriculture and the mechanical arts to work pay nothing. the stuff fast enough.” F

BEST VALUE SCHOOLS THE MOST GRATEFUL GRADS These universities score well on net price, net student debt, alumni earnings, How to measure college ROI: Find the schools with the alumni who give back in droves. timely graduation, school quality and access for low-income students. For public institutions, we used in-state tuition. To see the full list of Best Value 7-YEAR MEDIAN 3-YEAR 2018 Colleges, go to forbes.com/best-value-colleges. DONATIONS PER AVERAGE ALUMNI GRATEFUL COLLEGE STUDENT PARTICIPATION GRAD INDEX 1 2 3 4 5 1 DARTMOUTH COLLEGE $24,039 41.3% 99.81 UNIVERSITY OF UNIVERSITY OF BRIGHAM UNIVERSITY OF UNIVERSITY OF 2 WILLIAMS COLLEGE 23,434 47.8 99.77 CALIFORNIA, CALIFORNIA, YOUNG CALIFORNIA, WASHINGTON– LOS ANGELES BERKELEY UNIVERSITY IRVINE SEATTLE 3 PRINCETON UNIVERSITY 23,536 40.5 99.67 Los Angeles Berkeley, CA Provo, UT Irvine, CA Seattle 4 AMHERST COLLEGE 21,354 45.1 99.38 TUITION2 $14,170 $5,460 $13,738 $10,974 $13,261 5 DAVIDSON COLLEGE 19,994 44.5 99.05 6 7 8 9 10 6 CLAREMONT MCKENNA COLLEGE 22,776 33.8 98.8 HARVARD STANFORD PRINCETON UNIVERSITY OF AMHERST 7 HAVERFORD COLLEGE 19,810 38.1 98.68 UNIVERSITY UNIVERSITY UNIVERSITY CALIFORNIA, COLLEGE Cambridge, Stanford, CA Princeton, NJ SAN DIEGO Amherst, MA 8 WELLESLEY COLLEGE 16,328 49.0 97.79 MA $49,617 $47,140 La Jolla, CA $54,310 9 WABASH COLLEGE 19,850 31.4 97.78 $48,949 $14,018 10 UNIVERSITY OF NOTRE DAME 17,472 35.5 97.64 TOP COLLEGES EDITED BY SUSAN ADAMS AND CARTER COUDRIET WITH REPORTING BY GWEN AVILES, AVILES, GWEN BY WITH REPORTING COUDRIET AND CARTER ADAMS SUSAN EDITED BY COLLEGES TOP GRADS GRATEFUL ADAMS. SUSAN PURDUE BY AND AISHA POWELL. TIA NANJAPPAN GUO, QUANZHI FORBES FOR TIMPANNELL BY PHOTOGRAPH SCHIFRIN. HANSEN AND MATT SARAH BY 1ENROLLMENT IS TOTAL NUMBER OF UNDERGRADUATES. ANNUAL COST IS THE ESTIMATED TOTAL COST OF ATTENDANCE FOR OUT-OF-STATE STUDENTS LIVING ON CAMPUS IN 2017–2018. 2TUITION IS FOR THE 2017–2018 ACADEMIC YEAR. SOURCE: NATIONAL CENTER FOR EDUCATION STATISTICS.

OCTOBER 2018 FORBES INDONESIA | 67 68 | FORBES INDONESIA OCTOBER 2018 OCTOBER 2018 FORBES INDONESIA | 69 LeaderBoard

Nas averaged over $320,000 per tour stop, playing 46 shows during our 12-month scoring period.

The Top-Earning Rappers

MONTHS-LONG TOURS and endorsement deals with companies such as Sprite 1. JAY-Z | $76.5 MIL and Hennessy enabled the highest-earning hip-hop artists on our annual list to bring 2. DIDDY | $64 MIL in an average $44 million over the past year. Some of them also have acquired lucrative equity stakes, including Nas, 45, who makes the list for the first time a quarter-century 3. KENDRICK LAMAR | $58 MIL after releasing his debut album. A few years back, Nas kindled a friendship with ven- 4. DRAKE | $47 MIL ture capitalist Ben Horowitz at a dinner party and has since snagged stakes in Silicon 5. J. COLE | $35.5 MIL Valley darlings (Lyft, Coinbase) and online media (Genius, Mass Appeal). His inter- 6. DR. DRE | $35 MIL est in these startups is only natural, he says. “[Hip-hop artists] are always advancing 6. NAS | $35 MIL technology—from one turntable to two turntables and a fader.” He has already enjoyed some exits, including the reported $1.1 billion sale of doorbell startup Ring to Amazon 8. PITBULL | $32 MIL in February. “There wasn’t a time when [rappers] didn’t think about investing. It just 9. FUTURE | $30 MIL

so happens that the world is opening up.” For more, go to forbes.com/hip-hop. 10. KANYE WEST | $27.5 MIL ROBEHMED. NATALIE BY O’MALLEY GREENBURG. ADDITIONAL REPORTING ZACK BY FORBES FOR VOGT FRANCO

70 | FORBES INDONESIA OCTOBER 2018 FORBES INDONESIA FORBES LIFE LUXE INVESTMENTS Score the Ski Watch, Boot the Bordeaux Expert advice on luxe investments.

BY CHRISTIAN KREZNAR

BUY HOLD SELL Jean-Claude Killy Patek Philippe Richard Mille Rolex—Dato- Ref. 2526 High-End Modern Compax With fewer than 600 Production Legendary skier’s of these produced in Watches timepiece line from the the 1950s, most with When a downturn ’60s is an increasingly porcelain-enamel dials, arrives, the first to feel hot alternative to the near-mint-condition it will be watches that famed Rolex Daytona. models will see prices retail over $500,000. Be mindful: Dial and rise steadily. Have an extra one? (But case condition are of course.) Move it now everything. while resale prices are JOHN REARDON high. International head of watches, Christie’s

BUY HOLD SELL 2015 Tenuta Delle All Northern 1982 Red Terre Nere Etna Rhône Reds Bordeaux Calderara Sottana Availability of older Time to crowbar open Proprietor Marc de vintages of Côte Rôtie, those original wooden Grazia was one of the Hermitage and espe- cases of ’82 and either first to recognize the cially Cornas is sparse; drink or sell. The ripe- potential demand has skyrock- ness of that legendary of Sicily’s long-dormant eted. Place vintage has started to Etna region. This spicy your largest bets on turn the flavors of aging red, rich in raspberry Cornas’ “big four” into those of stewed ANTHONY GIGLIO fruit and silky tannins, vintners: Thierry Al- fruit. Wine director for American will last beyond a lemand, Auguste Clape, Express’ Centurion Lounges; decade. Noel Verset and Robert contributing editor to Michel. Food & Wine

BUY HOLD SELL Loie Hollowell Ulay & Marina Lucas Cranach Young painter of Abramović the Elder abstract and suggestive Collaborative Four paintings by the work, on the tip of ev- Polaroids German Renaissance ery collector’s tongue, An exhibition of solo master have sold in is showing at the Pace and collaborative works excess of $1 million this Gallery in London this in London next year is year. His works aren’t autumn. Only one work likely to drive demand in limited supply. Can has auctioned; it sold for these radical per- demand keep up? ZOHAR ELHANANI for $68,750, four times formance artists, par- CEO of MutualArt, a the midrange estimate. ticularly their Polaroids “Mother’s Milk” (2018) comprehensive online art- from the 1980s. market information guide by Loie Hollowell

OCTOBER 2018 FORBES INDONESIA | 71 FORBES INDONESIA FORBES LIFE MERCEDES-BENZ

of cooling air to the engine. Being inside the car is also a unique experience for a Mercedes car, it is theatri- A Seductive cal and exotic with a large transmission tunnel in the middle that houses drive controls of the car. You sit low to the ground just like Benz you do on an exotic sports car and the dashboard places The Mercedes-AMG GT C is the most powerful a firm emphasis on width, yet liveable from the AMG GT line up creating the impression of a powerful wing. The high BY YESSAR ROSENDAR beltlines, concave door pan- els, dynamically rising centre console and low seat position ercedes-Benz con- ing heritage as the 15 chrome-plated gives the driver a spot-on tinued its heritage of vertical bars echo the look of the cur- driving position. Driving the powerful and exot- rent Mercedes-AMG GT3 customer car gives you the most ex- ic-looking sportscar sports racing car. The new front apron otic experience among the Mwhen it launched the Mercedes-AMG brand’s current line up of GT, the second sports car developed cars; if you sit low you can in-house by the brand after the SLS THE EIGHT-CYLINDER see through the small boxy AMG. Last year the brand launched ENGINE THRILLS front window the long hood the facelift version of the car and in- of the car. The car has a long troduced the Mercedes-AMG GT C, WITH ITS IMMEDIATE hood because it is a mid- the top of the line model above the RESPONSE, A engine car, with the power AMG GT S and below the extreme train located behind the tuned AMG GT R. The car offers LINEAR, FINELY front wheel. 557 horsepower and 680Nm – 47 hp CONTROLLABLE When driven normal- and 30 Nm more than the AMG GT ly on the streets, the car is S – and a 0-100km/h time of just 3.7 POWER DELIVERY quite comfortable as a sports seconds. The car is the sweet spot for AND POWERFUL car and has a unique driv- the AMG GT collection as it offers ACCELERATION IN ing ambience. If you sit low more power yet is still comfortable with your head beside the to be driven on the road compared to ALL RPM RANGES. door, the noise from the big the track-focused AMG GT R. It uses rear tires are audible. It is a the same body styling as the AMG GT emphasises the car’s width and gives it blessing and a curse, as it gives the car R; it is wider 57 millimetres than the a road-hugging appearance. The front a sporty driving ambience although AMG GT S which gives it not just a apron also houses another feat ad- noise from the tires may be too much more aggressive stance but also better opted from the GT R, the Airpanel ac- for a long and easy drive on the high- handling as it can use wider tires. tive air management system. Vertical way. You also sit near to the exhaust Among the line up at the Mer- louvres located in the lower area of the on the back that makes it easier to en- cedes-Benz Dream Cars, the GT C is front apron can be opened and closed joy the mighty and growly V8. certainly the most striking in term of by an electric motor in around one The 4.0-litre V8 biturbo engine is sportiness. The car offers the complete second, ensuring the cooling perfor- one fun power plant, as the 557-horse- aesthetic package with the intimidat- mance is according to need. Constant- power engine is a fire-breathing hoo- ing Panamericana grille, wide and low ly achieving the ideal position calls for ligan typical of an AMG engine. The stance, and purposeful silhouette. The highly intelligent and fast control. The eight-cylinder engine thrills with its striking AMG Panamericana grille is large outer air inlets also enhance the immediate response, a linear, finely influenced by the brand’s motor rac- aggressive look while providing supply controllable power delivery and pow-

72 | FORBES INDONESIA OCTOBER 2018 SPONSORED CONTENT

erful acceleration in all rpm ranges. Its drive sports car with agile handling, the current offering of Mercedes- power delivery is rapid with maxi- and the steering response is spot on. Benz. The V8 engine from AMG is mum torque of 680 Nm from 1900 However, you must remember that always amazing, and the one in the GT to 5750 rpm. You get that satisfying it is a rear wheel drive; it must be re- C is a fine example. With the complete pace and power, with that powerful spected especially in corners. When package of dual clutch transmission crack and bang at each lift of throttle tested on damp roads you will see the and other technical marvels from on sport mode. The gear shift is also traction control lights on frequently AMG, it makes a compelling sports car. fast and refined, thanks to the use of a on full throttle and you must be care- It is not a driver’s car like the Porsche seven-speed dual clutch transmission ful not to upset the car balance espe- 911; it is on a different realm and is with modified hardware and soft- cially on corners. more of an exotic car yet is worthy as ware. The first gear has a higher ratio The Mercedes-AMG GT C offers one of the Dream Cars collection from for more agile acceleration and very the best performance, looks, and the brand. F fast responses to sudden accelerator drivability from the AMG GT line up, Disclosure: Mercedes-Benz hosted the movements. It is also a fun rear wheel which is the most exotic-looking in trip to Malaysia for the test drive.

OCTOBER 2018 FORBES INDONESIA | 73 FORBES INDONESIA FORBES LIFE NISSAN

lobally, Nissan Motor Com- pany is a predominant force in the automotive spectrum. Its alliance with Rejuvenating MitsubishiG and Renault has made it the world’s largest car manufacturer. The combined sales of the three companies stood at 10.61 million cars last year, Momentum with Nissan being the largest contributor at 5.82 million units. Nissan’s Yutaka Sanada aims to double its market In the case of Indonesia, the situa- share in Indonesia. tion is not so rosy yet. The largest car BY YESSAR ROSENDAR market in South East Asia, Indonesia only recorded sales of 14,488 Nissan cars last year. The number is a fraction experience. Indonesia, which sold over portant to our growth,” Yutaka Sanada, booked by the current market leader, one million new cars last year, is an im- Nissan regional senior vice president Toyota, which recorded sales of 372,614 portant market for the brand as other for the Asia and Oceania region, says cars last year, and is far from the peak regions have already matured and offer in an exclusive interview at the recent sales that Nissan recorded in 2012 with less growth potential. Gaikindo Indonesia International Auto 67,143 cars. Nissan now aims to regain “Nissan’s key focus of growth is Show (GIIAS) 2018. its growth momentum and market Oceania and Asia. I have strong confi- At GIIAS 2018, Nissan share in Indonesia by launching a prod- dence that we can make it, the Indone- launched the Nissan Terra, a premium uct offensive and revamping customer sian market is very crucial and very im- mid-size SUV with a starting price of

Yutaka Sanada, Nissan regional senior vice president for the Asia and Oceania region

74 | FORBES INDONESIA OCTOBER 2018 Rp 460 million. Indonesia is one of the making it easier and cheaper to develop sustainable. We are adding more re- top five markets to receive the vehicle cars. “We can reduce costs in ways that sources to this domain,” Yutaka says. immediately after the launch. The car enable us to put more features in our The dealership is managed PT Mi- forms part of Nissan’s product offensive cars,” Yutaka says. One example is elec- mosa Putra Abadi (MPA), which has that includes a revamp of its existing trification, which Yutaka says requires recently been appointed as the sixth models. “In our product offensive we huge investment that can be offset by official Nissan dealer partner in Indone- are putting core products in core seg- volume sales. “The alliance is a signifi- sia. As part of Nissan’s Customer Power ments. We don’t have a model like the cant power,” he added. and the company’s mid-term plan Nis- Nissan Terra in this segment. It will be Nissan is one of the pioneers of san M.O.V.E to 2022, all Nissan-Datsun done incrementally as we renew some electric vehicle (EV) when it launched brand dealerships will be aligned with models in key segments. Naturally, it the Nissan Leaf in 2010. In the Alli- the Nissan Retail Concept, offering will expand the segment,” Yutaka says. ance, Nissan aims to take the lead in the customers a convenient location for According to him, as the mid-size electrification domain. “We are proud purchasing, leasing or servicing their SUV has already significant competi- to be the number one provider in this Nissan and Datsun cars. The new retail tors with a market size that is not so segment and we want to maintain this design concept displays changes in all big, the segment will grow gradually leadership. Electrification will also be a areas – from sales and service to finan- to become a significant market. “Nis- key differentiator,” Yutaka says. cial services – to deliver the best pos- san’s global presence in some markets Increasing sales in the fu- sible experience to customers. is very strong. Naturally, I feel there ture also means that the brand must The Nissan Retail Concept revolves is huge potential here and the region be prepared in terms of network and around five key components: the iconic as well. So we have confidence in aftersales service. To that end, Nis- red Nissan tablet at the showroom en- doubling our presence in the coming san recently introduced a new net- try and pylon creates a powerful and years,” Yutaka says. work concept by way of its newest exciting brand identity; the exciting red According to Vincent Wijnen, Se- retail outlet in Bekasi, West Java. The “Nissan Drive” sign intuitively navi- nior Vice President for Nissan Asia and opening was the next step in Nis- gates customers through the Nissan Oceania, Indonesia will be the big- san’s growth strategy through a new brand experience and creates a sense gest market in the region in terms of mid-term plan for Indonesia. The new of excitement; a variety of consultation volume. The Asia and Oceania regions outlet has adopted the Nissan Retail areas for catering the diverse needs of are an important market for the brand Concept (NRC), which offers improved customers; a premium cozy lounge to as it has a fast-growing and relatively customer services within a globally elevate customer experience; and an young population different to Eu- consistent brand experience. Nissan exclusive delivery area. Currently, there rope or Japan. Nissan is also targeting Datsun Bekasi Barat offers customers are 105 Nissan-Datsun outlets operating younger customers by bringing more a complete range of Nissan and Datsun across Indonesia. All existing outlets technologies into their cars. “Our vision is to provide products and services that meet those demands. Our cars should “WE HAVE CONFIDENCE TO DOUBLE OUR be enjoyable, environmentally friendly, PRESENCE IN THE COMING YEARS.” safe, and connected,” Vincent says. According to Vivek Vaidya, Senior models, including the new Nissan Ter- will gradually implement the new Nis- Vice President of Mobility at Frost & ra and Datsun GO live Special Version. san Retail Concept to improve every Sullivan, GDP growth rate and favour- The total facility covers approximately aspect of customer experience at Nis- able demographics point towards a 1,100 square meters, including a sales san dealerships. According to Yutaka, strong long-term growth rate. Indone- and workshop area with 10 bays. the brand is not so much focusing on sia is still considered a developing auto- “We have a very concrete plan, number of dealers but on the quality of motive market. According to the World which is to improve our service. One sustainable and consistent service. Bank, the Indonesian ratio is 78 vehi- typical example is the Nissan Retail “We already have a manufacturing cles/1,000 people compared to Malay- Concept, which enhances the stan- facility here and we plan to fully sia with 290 vehicles/1,000 people and dards of service at our outlets. With utilize it. Our industry is dynamic and Thailand 206 vehicles/1,000 people. this I think we will improve our service significantly changing. So, we may The alliance plays a signifi- to customers, this is on top of the prod- consider some further enhancement cant role as the brands collaborate on uct offensive and is a core part of our in the future if significant demands sharing platforms and components, efforts to make our performance more require us to do so,” Yutaka says. F

OCTOBER 2018 FORBES INDONESIA | 75 FORBES INDONESIA THE EYE BY YESSAR ROSENDAR

Heritage Tribute

Parisian luxury house, form a horse pro- Hermes just introduced file inspired by one of its latest luxury the Hermès “Robe watches offering with du Soir” silk scarf the Arceau Robe du designed by Florence Soir. The watch fea- Manlik in 2018. Set against tures a meticulous an electric blue backdrop and assembly of multi- matching strap, the colour- colored fragments of ful fragments are lit up by the which the combination rose gold glow of the round case forms an artistic mo- with its asymmetrical lugs and tif; it is a horological slim leaf-type hands. Designed by creation imbued with Henri d’Origny in 1978, the famous the Hermès saddle- and round case with its stirrup-inspired leather-making heritage. asymmetrical lugs lends its classicism It comes in a 41 mm- to the unbridled originality of this model. Sweeping diameter rose gold case, over the leather mosaic dial, the slender hours and min- and the dial features utes hands are driven by a self-winding Manufacture Hermès 2,200 tiny juxtaposed movement that can be admired through the sapphire crystal leather squares that case-back. Issued in a 12-piece limited numbered edition.

The Island of the Gods is graced with another luxury Clifftop Haven resort with the opening of the Six Senses Uluwatu, Bali. Away from the crowds and set atop a rugged cliff in Pecatu, it is close to the island’s famous temple and namesake, one of six believed to be Bali’s spiritual pil- lars. The resort features 103 rooms which include villas and suites, along with one three-bedroom Presidential villa (The Reserve) and a four- bedroom mansion (The Retreat) that draw upon the local culture, embrace nature and offer every creature comfort. All villas and suites offer stunning Indian Ocean views and are built with locally sourced and sustainable materials. For one that wishes to rejuvenate, the resort also features the Six Senses Spa that offers locally inspired specialty treatments together with and extensive range of signature therapies. There are multi-day wellness programs and detox, as well as a selection of activities and complimentary morning yoga. Onsite activities include a vast central pool, and event lawn to compli- ment the beautiful ballroom, meeting rooms and a wedding pavilion.

76 | FORBES INDONESIA OCTOBER 2018 The French champagne house Moët & Chandon starting next year will have a new Chef de Cave, a French term for head wine maker for its prestige champagne brand, Dom Pérignon. Vincent Chaperon will become the new Dom Pérignon Chef de Cave, succeeding Richard Geoffroy that whom he has been working closely since 2005. Since he began working alongside Richard Geoffroy, Vincent has taken part in thirteen harvests and declared four vintages with him. They are, in the order in which they were declared, the 2005, 2006, 2009 and, most recently, 2008. Avid for lesser traveled paths and guided by a passion as observant as it is reasoned, Vincent Chaperon brings to the Dom Pérignon project his winemaker’s sensitivity and com- New Directions

mitment to progress. In recent years he has initiated bold explorations of Dom Pérignon and its creative heritage. Today, these initiatives have begun to inform the knowledge, perception, vision and experience of Dom Pérignon in inventive and unprecedented ways that are already inspiring the future. This passing of the torch coincides with the declaration of Dom Pérignon Vintage 2008, the culmination of the collaboration between Richard Geoffroy and Vincent Chap- eron. It recounts a shared vision, a fruitful dialogue between two exceptional talents and nature. Dom Pérignon Vintage 2008 revisits the archetype of vintage champagne to a degree that could be termed a “paradoxical new classic”, drawing on the best of the two winemakers’ approaches with complementary mutual understanding, blending Richard’s sophisticated and comprehensive knowledge with Vincent’s audacious intuition. www.domperignon.com

OCTOBER 2018 FORBES INDONESIA | 77 FORBES INDONESIA THE EYE BY YESSAR ROSENDAR

tion was also held in line with Senayan City’s 12th Annual Infinite Merit Award, which celebrates the theme of sports for 2018. The Sporting Charity award was given to Bambang Pamungkas for his dedication and achievements in the field of sports in Indonesia.

TAG Heuer, the Swiss luxury watch brand which has always been closely associated with the world of competitive sports, recently held the TAG Heuer Sports Hub Exhibition at Senayan City, South Jakarta, a cycling-race charity participated by notable national athletes and actors. Presented by President & CEO of Time International Irwan Mussry, the race donated Rp 200 million to Yayasan Olahraga Anak Nusantara (YOAN), a local non-profit foundation developed by actor Ibnu Jamil which supports children to be inspiring, next generation athletes on par with international tournament standard. The exhibi-

Locally-assembled Goodness

Recently MINI Indonesia celebrated the final unit roll off from the very first production milestone for BMW Group Indonesia. The batch of the locally-assembled New MINI Countryman at BMW Group Production Network occasion marks a successful journey from 2, PT Gaya Motor. The car is the first locally assembled model from MINI and it is another the first introduction of the MINI brand in Indonesia in 2011. In this short period of time, MINI has gathered lots of fans in Indonesia, and continues to do so with the addition of a new dealership earlier this year. The New MINI Countryman is the largest MINI model in our current line up and boasts the most comprehensive set of new features among all MINI models, featuring a variety of innovations in terms of space, function, design, and premium characteristics. With the car locally assembled, it can be delivered more quickly to customers and will be packed with more features than before. The New MINI Countryman is presented in two variants - the locally-assembled New MINI Cooper Countryman and New MINI Cooper S Countryman Sports.

78 | FORBES INDONESIA OCTOBER 2018 After successfully holding its first ‘When Jakarta Meets London’ in August 2017 Premier Collaborations by presenting guests with experience from the Savoy London, last September Fairmont Hotel Jakarta came back with ‘When Jakarta Meets the USA’ (WJMU) by bringing American cuisine and lifestyle from various states to Jakarta. Sim- ilar to the previous event, three guest stars are invited to take over the hotel’s restaurants: Chef Marcellus Coleman of California’s Fairmont Sonoma Mis- sion Inn, Pastry Chef Lindsay Le Blanc of Boston’s Fairmont Copley Plaza, and principal bartender and mixologist Mitar Prentic of Employees Only New York City. Timed differently from September 4-9, guests will experience special din- ings and bars at Fairmont Jakarta: NYC’s Employees Only’s signatures at Barong Bar, five-course dinner including wine selection of American Gourmet Din- ner at VIEW Restaurant, Afternoon Tea Soiree at Peacock Lounge where guests Great Gatsby Party – the highlight party of WJMU held at K22 Bar where guests are spoilt with American classic dessert are served with free-flow cocktails of NYC’s Employees Only and entertained by by Chef Lindsay LeBlanc, extravagant various performances.

Rejuvenate and Recharge

Nu Skin Enterprises, the premier anti-aging company that develops and distributes a comprehensive line of beauty, wellness solutions and health supplements, recently introduced Ulti- mate Duo, supplements duo consists of ageLOC R2 and ageLOC Y-Span. The Ultimate Duo works beyond any age to energize body and mind to perform at its peak. This supplement duo works together to provide systemic anti-aging benefits. ageLOC R2 helps to optimize body at the cellular level to promote energy levels and mental sharpness. Its Day and Night formulas support the well-being of our brain, heart and mus- cles. ageLOC Y-Span supports optimal physical performance by promoting energy and stamina while improving mental youthfulness. Daily consumption of the two health supplements is rec- ommended for adults expecting ultimate health performance despite their routine activities.

OCTOBER 2018 FORBES INDONESIA | 79 Thoughts on Advice “GIVE A MAN “I am glad I A FISH, AND paid so little YOU’LL FEED attention to HIM FOR A DAY. good advice. TEACH A MAN Had I abided TO FISH, AND by it I might HE’LL BUY A “COUNSEL INVOLVING RIGHT have been FUNNY HAT. saved from TALK TO A AND WRONG some of my HUNGRY MAN SHOULD NEVER most valuable ABOUT FISH, BE SOUGHT FROM mistakes.” AND YOU’RE A CONSULTANT.” A MAN WHO —EDNA DOES NOT SAY ST. VINCENT —SCOTT ADAMS HIS PRAYERS.” MILLAY “I GIVE MYSELF —FULTON J. SHEEN SOMETIMES ADMIRABLE ADVICE, BUT I AM “They tell me not to drink, and I do drink. INCAPABLE OF TAKING IT.” They tell me not to eat, and I do eat.” —MARY WORTLEY MONTAGU —WILLIAM MAKEPEACE THACKERAY “People are very “I ALWAYS ADVISE fond of giving away that which PEOPLE NEVER TO they need most GIVE ADVICE.” themselves. It is —P.G. WODEHOUSE what I call the “To ask advice is in nine cases “All your life people will depth of generosity.” out of ten to tout for flattery.” tell you things. And most —OSCAR WILDE —JOHN CHURTON COLLINS of the time, probably 95% of the time, what they’ll “NO ONE WANTS ADVICE—ONLY CORROBORATION.” tell you will be wrong.” —MICHAEL CRICHTON —JOHN STEINBECK “The best advice I ever received was ‘No one else knows what they’re doing either.’ ” —RICKY GERVAIS “Advice is “WHO CANNOT GIVE what we ask GOOD COUNSEL? for when we ’TIS CHEAP, IT COSTS FINAL already know THEM NOTHING.” THOUGHT “Listening to advice the answer but —ROBERT BURTON wish we didn’t.” often accomplishes —ERICA JONG “LISTEN TO ADVICE AND ACCEPT DISCIPLINE, AND AT far more than THE END YOU WILL BE COUNTED AMONG THE WISE.” heeding it.” —PROVERBS 19:20 —MALCOLM FORBES

SOURCES: ANATOMY OF MELANCHOLY, BY ROBERT BURTON; LIFE OF JOHN CHURTON COLLINS, BY JOHN CHURTON COLLINS; HOW TO SAVE YOUR OWN LIFE, BY ERICA JONG; THE TIMES BOOK OF QUOTATIONS; THE LETTERS AND PRIVATE PAPERS OF

WILLIAM MAKEPEACE THACKERAY; THE PICTURE OF DORIAN GRAY, BY OSCAR WILDE; THE LOST WORLD, BY MICHAEL CRICHTON. HISTORIC GLENN WEINER/ZUMAPRESS/NEWSCOM; IMAGES; LIFE PICTURE COLLECTION/GETTY ALFRED EISENSTAEDT/THE IMAGES; BACHRACH/GETTY SANCHEZ/AP; MARCIO JOSE LEFT: FROM TOP CLOCKWISE COLLECTION/NEWSCOM LISZT IMAGE; ARCHIVE/GETTY HULTON IMAGES; ERIC LIEBOWITZ/GETTY IMAGES; ULF ANDERSEN/GETTY IMAGES; ROGER VIOLLET COLLECTION/GETTY COLLECTION/ALAMY;

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