Why Indonesian StartUp Unicorns Unwilling to Go Public?
The presence of e-commerce companies on the Indonesia Stock Exchange (IDX) is not as much as issuers from conventional industries. Regulations that are still not clear enough to regulate this industry are few of the reasons that e-commerce developers are reluctant to take the stock market.
Based on IDX data, there are only three e-commerce companies that have listed shares on the IDX, namely NFC Indonesia Tbk (NFCX), PT M Cash Integrasi Tbk (MCAS), and PT Kioson Komersial Indonesia Tbk (KIOS).
E-commerce has great potential because the value of transactions and assets of e-commerce companies can reach billions and even trillions rupiah.
At the moment there are three new e-commerce issuers which have very high valuations, although high or premium, because the new sector is still difficult for the market to accept, equating their perception of the e-commerce sector with other sectors.
The regulation which is not attractive for e-commerce companies is a tough challenge. For example, the Draft Government Regulation (Rancangan Peraturan Pemerintah/RPP) about e-commerce that has been running since 2015 has not been completed to date. In terms of regulation, for instance fo regulating online transportation companies, the policy is still tugging.
This is a picture of the market towards the e-commerce sector, meaning that the future challenges are talking about regulations, this is a significant risk. That is a big challenge for prospective e-commerce issuers to make market confidence in the sector stronger
Recently, the business-to-business e-commerce company Bhinneka.com decided to postpone plans to go public through an Initial Public Offering (IPO) because it was still waiting for additional capital. Previously, Bhinneka delayed registering on the stock exchange due to the constellation of the 2019 Presidential Election.
Currently there are four unicorn e-commerce companies that are valued above 1 billion US dollars, equivalent to IDR 14.10 trillion, assuming the exchange rate is IDR 14,100 per USD. The four companies are Gojek, Traveloka, Tokopedia and Bukalapak.
McKinsey’s latest research entitled “The Digital Archipelago: How Online Commerce is Driving Indonesia’s Economic Development” published in August 2018 projected that the e-commerce market value in the country would reach 65 billion USD, or around IDR 916 trillion, assuming the exchange rate was IDR 14,100 per USD in 2020. This value was recorded to jump eight times the e-commerce market value in 2017 amounting to 8 billion USD, equivalent to IDR 112 trillion.
The government itself previously launched a discourse to encourage Indonesian Unicorn companies to register shares on the Indonesia Stock Exchange.
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nice information