It’s time to step out of the Jakarta bubble

And how the rest of the archipelago lives

I know this post might seem funny, coming from a Bule.

P.S. I have to double check whether I qualify as “Bule” given my brown skin, but that’s for another time.

Last weekend I had the pleasure of accompanying a few friends to Jogjakarta. While the city and its people can only be described as beautiful, what was eyeopening for me was to see where the rest of Indonesia is in terms of its purchasing power.

By all means, Jogja is a well developed city. The student town has 0.5M people, counts among the top-tier cities of Indo, has an international airport, and houses one of the most popular institutes in the country: Universitas Gadjah Mada. It enjoys a long-dated and diverse history, including having done a short stint as capital of free Indonesia.

Two things really caught my attention during this trip, while observing the people in Jogja. First, the young folks (mostly all students) are truly hipster. The above-average-income Jogja-ite drinks good coffee, wears nike sneakers, and owns a decent smartphone. Second, and more importantly, the same Jogja-ite is willing to only pay half of what a Jakarta-dweller would for the same goods.

It’s easy to break this down by recounting some of my expenses from the trip. I focus here on three basic necessities of humans:

Food

I was informed before going in, by many, that the food in Jogja is not only amazing, but also cheap. Even then, I was not prepared for what the city delivered. Our first meal was at a restaurant called Ayam Preksu, which our nice driver Ari took us to. A full meal per person here cost us 10,000 IDR, that’s 73 cents! It included very nice fried chicken, some sambal and toppings, UNLIMITED rice, and a drink. The same would normally cost thrice as much in Jakarta. To compare, a few weeks ago I ate at a roadside warung in Jakarta and paid 15,000 IDR for a Soto Ayam.

And this is not just a bottom-of-the-pyramid phenomenon in Jogja. During the trip we ate at a fine-dining restaurant called Sasanti, previously visited by Barrack and Michelle Obama, as well as (I hear) Jokowi. The mini meal below was priced at 50,000 IDR (3.6 USD). The same would easily cost double, if not more, in a comparable restaurant in Jakarta.

Side note: the best tempeh I had so far in Indonesia :)

Shelter

When my friend Dave saw the hotel prices in Jogja, I believe he jumped through the roof and hit his head. We decided to “splurge” and stay at Hyatt Regency. Tariff for double occupancy: 55 USD per night. The luxurious resort comes with a golf course on its grounds, and a river pool (!).

Over the next few days we managed to sneak out time to visit a co-working space called Sinergi. A very well-designed workspace, the management runs it with a surprising twist. The workspace, with high speed wifi, is free to use — they make money when people buy coffee from their cafe or book meeting rooms or use the printer! This has to be one of the most innovative business models I have seen in the co-working sector. It works in Jogja because the real-estate prices are still very low.

Clothing

When it comes to shopping, Jogja is no less cheap. The markets appear very similar to the ones in India. What is surprising though are the vast amounts of inventory piled up in each shop, all selling at dirt-cheap-extremely-fast-fashion prices.

And if you think premium clothing would be expensive in Jogja, then all you need to do is visit a traditional Batik shop in the city renowned for its Batik craft. I managed to get my hands on some nice Batik Tulis cloth, 3M in length, for 600,000 IDR (42 USD). For handcrafted Batik, that’s a steal!

By now you would have gotten the hint. Jogja is cheap, and even 100,000 IDR a day can go a long way in this city. You’ll be hard frought to spend that money in Jogja. All in all, Jogja’s cost of living would be half, if not lower, than that in Jakarta.

This is important if you are a founder building a business in Indonesia. You cannot assume that people will easily pay you a service fee for convenience, especially if that fee is any where above a few thousand rupiah. Also do not assume that people will buy from you every month, because the disposable income just might not be there.

So in future, spare me the likening of Indonesia to China. Also spare me a pitch if you are building a business for the elite in Indonesia. There are only a handful of them, in and around your neighbourhood, and that’s not what the country needs. The country needs you, Mr. and Ms. Entrepreneur, to solve its fundamental problems, which have the potential to scale across this giant archipelago and touch the 260M lives, down to the last individual.