There's a lot of hype amongst entrepreneurs and investors in Southeast Asia (SEA) when it comes to the topic of Indonesia's market size. Indonesia is undoubtedly SEA's anchor, and anyone who disagrees with that is as much in denial as that dude who's running for POTUS.
Indonesia's population is huge, but what is actually addressable for the flurry of tech-enabled B2C startups looking to serve Indonesia's consumers through the internet? Below is a quick'n'dirty back-of-the-envelope calculation I did.
After stripping out the rural population and non-internet users, we're left with 110 million urban internet users. Removing the children and the elderly from the equation leaves us with about 65 million addressable internet users. Assuming that some of these users are from the 'poor' and 'aspirant' class (who probably use the internet in LAN shops for basics such as checking emails), we're left with around 40 million users who would have the propensity to buy products/services online.
Don't get me wrong, this is still BIG. 40 million is very big. I have absolutely no problem with calling this 'BIG'. But what I do have a problem with is the "250 million" number that investors and entrepreneurs keep smacking about like golf balls in a driving range whilst they're sipping on their own kool-aid.
This 40 million number will grow with increasing internet/smartphone penetration and rural-urban migration. But for now let's focus on how we can really serve these 40 million users instead of the 250 million people from lala-land.