Twitter Looks to Indonesia to Boost Growth
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A year after announcing it would open an office in Jakarta, Twitter has finally hired a team to develop business in the market of 250 million people as the company works to overcome weak global growth in users and advertising revenues.
The Indonesia team will focus on business development and marketing, with staff dedicated to building media partnerships, selling advertising and public policy development, Parminder Singh, managing director for Twitter in Southeast Asia, India, North Africa and the Middle East said in an interview.
Mr. Singh wouldn’t give the number of new staff, saying only that hiring is at an early stage but is growing “very rapidly.”
“Across a spectrum of functions, we are staffed here to do business,” he said.
In March, Twitter’s then-Chief Executive Dick Costolo visited Jakarta to announce the office opening, but Mr. Singh said it took time to get the regulatory approvals needed and set up the physical office infrastructure.
Rick Mulia, the country business head appointed in March, resigned in June citing personal reasons. He’s since been replaced by Roy Simangunson, former country manager for Yahoo Indonesia.
Twitter is looking to emerging markets like Indonesia that are fast embracing smartphones and social media as user growth levels off in more developed markets and revenue bounces back from a hit it took last year after the company made changes to some of its ad functions.
In the second quarter of the year the microblogging site recorded revenues of $502 million, growth of 61% from a year earlier and well above its own projections. But user growth has been sluggish.
Core monthly active users– those who access Twitter via the Web or mobile at least once a month–stood at 304 million in the first quarter, up from 302 million in the first three months of the year.
Boosting those numbers is where Indonesia matters. The world’s fourth most populous country has gained global attention for its voracious use of social media, and Jakarta has been deemed the world’s most active Twitter city.
“Across a spectrum of functions, we are staffed here to do business,”
While the company doesn’t give out user numbers by country, it considers Indonesia one of its top emerging markets and Mr. Singh called it a “bright spot” in the Asia-Pacific, a region he dubbed Twitter’s “growth engine.”
Indonesia is “the next phase of our growth,” said Mr. Singh.
A key part of the company’s business strategy in Jakarta, he said, will focus on building partnerships with agencies and big-name advertisers, such as banks and telecom companies, and on launching new products to draw in users.
While more than three-fourths of the company’s users are outside the U.S., only 36% of its revenue is derived internationally.
Targeting mobile users will also be a focus in Indonesia, since about 88% of the company’s overall advertising revenue comes from mobile. Although Internet penetration rates remain low in Indonesia, the majority of people get online through their mobile phones, and the number of smartphones is seeing rapid growth.
Twitter’s acquisition of India-based ZipDial earlier this year could also potentially be used to help it reach millions more on feature phones. The platform allows users to access Twitter through mobile messaging. When these users were included in the company’s second quarter user data, its user base grew to 316 million from 308 million.
“For a lot of people their first experience on the Internet will be using a mobile phone,” Mr. Singh said. “That makes us very well placed to leverage the entire mobile revolution and mobile popularity in this region.”
In March, the company opened an office in Hong Kong to build up advertising dollars and reach out to rapidly growing developers and smartphone makers. Mr. Singh said the company “would love to be in China from a usage point of view,” but is currently focused on business development through Hong Kong.
In June the company announced plans to double its staff in Singapore. It also has offices in India Australia, Korea, and Japan.
Questions & Answers
Q.What led to the delay in establishing Twitter's office in Jakarta after the initial announcement?
What led to the delay in establishing Twitter's office in Jakarta after the initial announcement?
Mr. Singh explained that regulatory approvals and setting up the physical office infrastructure took time. This caused the delay after the initial office opening announcement was made in March by the then-Chief Executive.
Q.What is Twitter's strategic focus for business development in Indonesia?
What is Twitter's strategic focus for business development in Indonesia?
Twitter plans to build partnerships with advertising agencies and large advertisers, such as banks and telecom companies. They will also focus on launching new products to attract users and target mobile users, from whom a significant portion of revenue is derived.
Q.How will Twitter address the low internet penetration in Indonesia to reach more users?
How will Twitter address the low internet penetration in Indonesia to reach more users?
Twitter will focus on mobile users, as most people in Indonesia access the internet via smartphones. They might also use their acquisition of ZipDial, an India-based platform, to reach feature phone users through mobile messaging.
Q.What is the rationale behind Twitter's decision to prioritise emerging markets like Indonesia?
What is the rationale behind Twitter's decision to prioritise emerging markets like Indonesia?
Twitter is targeting emerging markets because user growth has slowed in more developed regions. These markets, like Indonesia, are rapidly adopting smartphones and social media, offering a significant opportunity to boost user numbers and revenue.
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