Go digital or go bust: Indonesian ‘old-school’ tycoon Mochtar Riady

By Masyitha Baziad August 26, 2016

‘A sunset industry is one that does not recognise and embrace IT processes …’
Lippo Group’s moves in the tech space part of its own digital transformation

Go digital or go bust: Indonesian ‘old-school’ tycoon Mochtar Riady

ONE of the richest and most successful businessmen in Indonesia, Mochtar Riady (pic above) –founder and chairman of the Lippo Group conglomerate – has a simple formula for success: Embrace information technology (IT).

“The rule nowadays is simple: A sunset industry is one that does not recognise and embrace IT processes in its business, or one that has yet to move to e-commerce,” he told the audience at Indonesia Brand Forum 2016 in Jakarta on Aug 24.

“Whether you are a small business, family business owner, or even a corporation, changing and innovating your business using the latest technology is the only constant thing you need to keep doing,” he added.

Lippo Group is best known for its listed property business PT Lippo Karawaci Tbk, which owns and manages 43 malls, 20 hospitals, and eight hotels in Indonesia.

The group is now mainly led by Mochtar’s sons James and Stephen Riady, as well as grandson John Riady.

Last year, John launched a US$150-million tech fund under Lippo’s venture capital firm Venturra, and also committed to investing US$500 million in the group’s new e-commerce arm, MatahariMall.com. Venturra has also invested in Singapore-based ride-hailing startup Grab.

All the moves taken by Lippo Group in the technology space are not only about grabbing a business opportunity, but are also part of the group’s own transformation, according to Mochtar.

“We are no longer in the dynamo economy era, where every machine and device needed a dynamo to run,” he said.

“Now, it is all in chips, tiny little things that run the world today. That means we are already in a digital world – this world is faster, sometimes meaner, but leaves us with no choice but to follow,” he cautioned.

The 88-year-old tycoon uses the banking industry as a cautionary tale.

“This industry needs to move quickly to develop e-payments because sooner rather than later, automated teller machines (ATMs) will be junk; credit cards will be invisible; and bank branches will be [an unnecessary] burden,” he said.

Mochtar, also known as Indonesia’s financial magnate, argued that businesses need to be sensitive to the new era, which revolves around technology, as well as to keep up with consumer expectations.

“When businesses do not move fast, it is simple … they will get left behind,” he told Digital News Asia (DNA) on the sidelines of Indonesia Brand Forum.

He offered another example: Indonesia’s biggest taxi operator, Blue Bird Group.

“It was running very well, had excellent growth and a sustainable business, until the digital wave came and disrupted its entire business model.

“This is a classic example of how fast technology can change not only an entire industry, but human life as well,” he added.

Mochtar also argued that two other technologies are poised to upend the status quo: Nanotechnology and the life sciences.

“When I see how people are trying to make batteries from graphite these days, there is no doubt that in the future, all cars will no longer need fossil fuels but will run on batteries,” he said.

“That will disrupt the oil industry in a big way – now the question is, are industry players ready? Are they preparing for the disruption to come?” he added.

Mochtar is known for his passion in nanotechnology. Last year, he underwrote a cutting-edge nanotechnology development research centre for the University of Indonesia, which named it Mochtar Riady Plaza Quantum (MRPQ).

Even earlier in 2008, he built the Mochtar Riady Institute of Nanotechnology (MRIN) that focuses on research into liver cancer, and integrated it with Lippo Group’s hospital business Siloam Hospital.

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