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Marketing evaluate of online gambling in Indonesia sample essay

Introduction Developing our company business of online gambling enter to new market –Indonesia due to more and more competitors share market of China now, otherwise, the Chinese government crackdown illegal online gambling website from end of 2009 to now, so we must be to reduce the business risk and look for other potential new market to do the business and make sure company business stable development. The article will be introduce gambling, online gambling history, business environment and relation of market analysis of China, also guide to know currently status of online gambling and trend in China market.

For new Southeast Asia market, why need to go to Indonesia and isn’t others country, its every important question for us to know. We will be chose two markets of Southeast Asia countries as Thailand and Malaysia making comparisons with the new market as Indonesia. Before comparisons, also we should be known about Thailand, Malaysia market, how about those country business environment, and online market analysis. According with result from comparisons, we will get the answer in below review about why choose Indonesia to do business of online gambling, and SWOT analysis about doing business in Indonesia.

After that, also have formulate market strategic about what’s the best way to go to do business, and how to developing business in Indonesia as market resource, campaign, and local agent of online gambling etc. After Analysis Indonesia market and compare with other Southeast Asia country, we also need to know how to enter Indonesia market of doing business and develop the business Statement of the problem What is the market value of Indonesia for doing business of online gambling?

Indonesia is the third largest populated country in Asia after China and India, have enough resource in internet circumstance, economy and marketing resource to do business. Otherwise, Indonesia is the world’s most populous Muslim country, with about 90% of its 237 million citizens practicing Islam, Under Islam, gambling of all kinds is strictly prohibited, but gambling often continues as an important part of life of some Muslims. Revenue is major value for a firm; Indonesia lost around $320Million by illegal in 2009, its more than others Southeast Asia.

Follow the economy growth, Indonesia is Southeast Asia’s largest economy and has delivered consistently high annual growth exceeding 6% in both 2007 and 2008. Growth of between 2% and 4. 5% is expected in 2009. The market will generate more and more revenue in the future. What are the aspects of value analysis for new market? For the paper will do the analysis of Existing market as China, Malaysia and Thailand about environment analysis, market analysis, and currently status, after analysis different between Thailand, Malaysia, and Indonesia, we got know value of Indonesia market.

Others, to develop business in the new market, we also need to do competitors analysis, customer analysis and 4p analysis to know our company advantage and disadvantage. Existing market analysis China market- Environment analysis According to the latest figures from CNNIC, the number of Internet users in China rose to 420 million at the end of June, 2010, an increase of almost 36 million users in the first six months of year 2010 and including 115. 1 million users in the rural areas. The current Internet penetration rate in China is 31. 6% acording to Internet World Stats statistics.

YEAR| Users| Population| % Pen. | Usage Source| 2000| 22,500,000| 1,288,307,100| 1. 7 %| ITU| 2001| 33,700,000| 1,288,307,100| 2. 6 %| ITU| 2002| 59,100,000| 1,288,307,100| 4. 6 %| ITU| 2003| 69,000,000| 1,288,307,100| 5. 4 %| CNNIC| 2004| 94,000,000| 1,288,307,100| 7. 3 %| CNNIC| 2005| 103,000,000| 1,289,664,808| 7. 9 %| CNNIC| 2006| 137,000,000| 1,317,431,495| 10. 4 %| CNNIC| 2007| 162,000,000| 1,317,431,495| 12. 3 %| CNNIC| 2008| 253,000,000| 1,330,044,605| 19. 0 %| CNNIC| 2009| 384,000,000| 1,338,612,968| 28. 7 %| CNNIC| 2010| 420,000,000| 1,330,141,295| 31. 6 %| CNNIC|.

Mature netizens take a larger percentage in the age structure of the Chinese Internet users than before, and those above the age of 30 accounts for 41% of the total. At the same time, the educational background and income level of the Chinese netizens has lowered. The time period spent in the use of the Internet by Chinese netizens continues to increase and reached an average of 19. 8 hours per week per user. China Market analysis According to China Internet Market 2009 Q2 Report, the market size of China Internet in Q2 2009 is 16. 76 billion Yuan, having increased 17% compared to last quarter with a 22.

2% increase compared to Q2 in 2008. Also China is the world’s biggest online gaming market. According to the director of the Chinese development firm, Sino, Richard Li, the Chinese gambling market turns over $100 billion, 95 percent illegally. Just like Western countries, China needs to fund social services for its aged population, so pragmatism, rather than intolerance for bourgeouis entertainment, is triumphing. Current status and trends of online gambling in China After Germany world cup, more and more online gambling companies enter to China.

In end of 2006, just have around 20 companies in China market, until 2010, have more than 100 companies, the competitor increase fourfold. The market share reduces compare with before. Otherwise, we know the only forms of legal gambling in the People’s Republic of China (PRC) are the two government lotteries: the Welfare Lottery and the Sports Lottery. These are is very popular in China. From end of 2009 to now, the Chinese government strengthen promote Chinese lotteries, and crackdown illegal online gambling website and closed around 300 website. Lead China’s lottery market has generated RMB69.

4 billion in profits around in 2010 alone. Even so, the revenues generated by illegal gambling operations in mainland PRC are estimated to be 10-20 times larger than the combined revenues from both legal lotteries Trends of Online gambling in China These indicators tend to imply that gambling is socially acceptable in China, and that China’s enforcement policy extends only to unsanctioned casino operators, not to the citizens actually playing. Recently there have been signs that change is imminent, and that we may soon see the birth of Chinese legislation that governs online casinos in China.

Ultimately the reasons come down to money. The last decade has seen an unprecedented level of economic development in China, such that there are now far more wealthy Chinese than ever before – and these people are clearly gambling, whether they have to travel to Macau or beyond. Regulating the industry would allow the Chinese government to keep a larger portion of that growth capital inside China through licensing fees and through taxation. In the meantime, however, Chinese gambling fans continue to break the law whenever they visit an online casino. Malaysia Market – Environment analysis.

In Malaysia, it may come as a surprise to many that the Malaysia has one of the highest internet penetrations in the world, with 65. 7% of its population going online. It is fast catching up with America, which has over 74% of its population online. There are 16 million internet users in Malaysia. YEAR| Users| Population| % Pen. | Usage Source| 2000| 3,700,000| 24,645,600| 15. 0 %| ITU| 2005| 10,040,000| 26,500,699| 37. 9 %| C. I. Almanac| 2006| 11,016,000| 28,294,120| 38. 9 %| ITU| 2007| 13,528,200| 28,294,120| 47. 8 %| MCMC| 2008| 15,868,000| 25,274,133| 62. 8 %| MCMC|.

2009| 16,902,600| 25,715,819| 65. 7 %| ITU| 2010| 16,902,600| 26,160,256| 64. 6 %| ITU| Malaysia Economic Analysis The country’s rich natural resources ensure sound developments in agriculture, forestry and mining. Economic growth is also attributed to its border with the Strait of Malacca which is an important international shipping crossroad, which promotes the country’s international trade. Malaysia’s well developed manufacturing sector produces a diverse range of goods. The first three quarters of 2009, however, witnessed steep decline in the country’s economic growth.

Volume of exports reduced drastically due to reduced consumer goods demand globally. The situation, however, improved somewhat in the Q4FY09. The Tenth Malaysia Plan is all set to be introduced in June 2010. Malaysia Market analysis As for casino gambling in Malaysia, there are very few options. The country has only one legal casino, and though it is large and very complete, it is the only place where Malaysians can legally play table games and card games in the country. This has lead to a problem with underground gambling dens and sports betting shops that the Malaysian government is currently working to solve.

Before July 2009, online gambling is legal, and most of online gambling company get the operate license in Malaysia. After the 6 July 2009, The Malaysia government cancelled the entire license and does not offer licenses to open internet gambling sites. And also takes some measures to ensure that Malaysian players do not use foreign internet gambling sites. Also, Malaysian banks are not supposed to authorize transfers to or from online gambling websites. This rule is very loosely followed, however, and there is still a number of banking methods open to Malaysian players who want to gamble online.

In fact, some of the bigger online gambling websites that are hosted in other countries even offer their services in Malay, letting players make the best of their internet gambling experience. Current status of online gambling in Malaysia Malaysian gambling laws forbid all forms of sports betting except for horse racing, and online gambling in all forms is equally prohibited. But online gambling sites in Malaysia has proven been most popular in the Sarawak region, where visitors are 48 more likely to visit.

Sarawak stands out from other Barisan Nasional and even other Malaysian states in that the regional government disapproves the federal government’s moves to legalize online gambling. And most of gamblers go to there for online gambling. Thailand Market – Environment analysis The population of Thailand is now 66. 4 million, about 10 million of whom live in the capital city of Bangkok. Thais form the majority, though the area has historically been a migratory crossroads, and thus strains of Mon, Khmer, Burmese, Lao, Malay, Indian and most strongly, Chinese stock produce a degree of ethnic diversity.

Integration is such, however, that culturally and socially there is enormous unity. YEAR| Users| Population| % Pen. | GDP p. c. *| Usage Source| 2000| 2,300,000| 61,528,000| 3,7%| US$ N/A| ITU| 2007| 8,465,800| 67,249,456| 12. 6%| US$ 3,759| ITU| 2009| 16,100,000| 65,998,436| 24. 4%| US$ 3,940| ITU| 2010| 17,486,400| 66,404,688| 26. 3%| US$ 4,403| ITU| According to estimates of United Nations Population Information Network, the population of Thailand would be about 74 million in the year 2050. Until 2010s, total have 17. 4million internet user have 26.

3% population used Thailand Market analysis The primary form of legal gambling in Thailand is the national lottery. It was started in 2003, mostly because a large underground lottery system was already operating and the government felt the best way to drive it out was to create an officially sanctioned lottery system. But even the legal lottery is not immune from illegal activities – in 2006 the prime minister and other government officials were accused of skimming more than $1 billion from state lottery revenues. Online gambling in Thailand is also forbidden.

The Thai government does not provide licenses that would allow internet gambling websites to be hosted in Thailand. In fact, they have never even considered allowing for online gambling in Thailand since land-based gambling is mostly forbidden. In spite of the ban on internet gambling the Thai government does very little to prevent players from using foreign online gambling sites. These websites are hosted in different countries, places where the Thai government has no jurisdiction. This means there is little they can do to prevent players in Thailand from using them.

There are many online gambling sites that accept Thai players, though few are available in Thai. Current status of online gambling in Thailand Online gambling continues to permeate all countries and cultures, despite governments’ persistent efforts to outlaw the practice. Thailand is the latest country to find increasing numbers of citizens wagering online. If individuals running illegal sites are identified, the Thai Anti-Money Laundering Office will freeze any assets and arrest and prosecute those deemed culpable. Gambling in Thailand is highly illegal, but base on DSI data reveals at least 10,000 subscribers to suspected gambling sites.

Soccer wagering has become an increasingly popular form of play, particularly among younger gamblers. The appeal of gambling online continues to grow worldwide, and the most logical reaction of government is to tax the hobby and enjoy a steady new revenue source, rather than waste funds fighting a battle that is unwinnable. Indonesia Market – Environment analysis Indonesia is the third largest populated country in Asia after China and India. also is Southeast Asia’s largest economy and has delivered consistently high annual growth exceeding 6% in both 2007 and 2008.

Growth of between 2% and 4. 5% is expected in 2009. The consumer market continues to grow in the world’s fourth-largest country. There are more than 237 million citizens, 50% of whom are under the age of 30. GDP per person exceeds its ASEAN neighbors such the Philippines and Indonesia has a GDP per person three times that of Vietnam. Indonesia is a thriving democracy with significant regional autonomy Indonesia is a market-based economy but the government plays a significant role in the country’s economy with 160 government-owned enterprises.

Indonesia’s GDP per capita ranks fifth after Singapore, Brunei, Malaysia and Thailand. Indonesia’s GDP was US$258. 3 billion with a GDP per capita of US$1,193 in 2004. Indonesia’s real GDP grew at an average of 4. 6% annually from 2000 to 2004 driven by domestic consumption accounting for nearly three-quarters of Indonesia’s GDP Current status of online gambling in Indonesia According to Indonesian gambling laws all forms of gambling are illegal and prohibited. Indonesia is the world’s most populous Muslim country and about 90% of its 237 million inhabitants ardently practice Islam.

Gambling of all kinds is strictly prohibited by Islam. According to statistics, however, there are 23. 7 million residents who don’t practice Islam and many of them have found ways to gamble. Illegal gambling is prevalent throughout Indonesia. Dense population and police corruption have allowed illegal casinos to operate without regards to the Islamic ban on gambling. That’s the reason for many of the online gambling company go in to Indonesia market. In additional this country is a biggest country compare with other Southeast Asia country. Compare analysis with other Southeast Asia country.

Population Indonesia is the third largest populated country in Asia after China and India. Also is Southeast Asia’s largest economy and has delivered consistently high annual growth exceeding 6% in both 2007 and 2008. Growth of between 2% and 4. 5% is expected in 2009. The consumer market continues to grow in the world’s fourth-largest country. Indonesia is a market-based economy but the government plays a significant role in the country’s economy with 160 government-owned enterprises. Indonesia’s GDP per capita ranks fifth after Singapore, Brunei, Malaysia and Thailand. Internet user.

With 30 million Internet users as of the end of 2009, Indonesia is the 5th largest Internet market in Asia (after China, Japan, India, and South Korea). The number of Internet users in Indonesia is growing really fast (the highest growth among Asia countries after China), especially the number of users who use their mobile phone to access the Internet. In five years, about more than half of the Indonesian population or 150 million people are projected to have access to the Internet (most of them through their mobile phone). Compared to the population (not Internet users) of Singapore (4.8 million), Malaysia (27 million), South Korea (48. 6 million).

Thailand (67 million), Vietnam (86 million), and Philippine (90 million), it is clear that the number of Internet users in Indonesia will be significantly higher than the number of Internet users in those countries. Usage of Internet Internet users in Indonesia spend about 17. 2 hours online per month According to a survey conducted by Nielsen Indonesia, most Indonesians use the Internet for checking email (42%), reading newspaper (39%), searching for information about products or services (29%), reading magazines (27%), and chatting (23%).

A study by comScore shows only 50% of Indonesian Internet users do online shopping and they spend only 1% on their online time for shopping. Clearly, online shopping is still not the main reason for Indonesians to go online. While Indonesians are still cautious in using the Internet for shopping, there are very enthusiastic to online social networking. 28 million Indonesians have account(s) with Facebook, making them the 3rd largest Facebook users in the world. As of June 2010, Indonesians also produced the 3rd highest number of tweets in the world. It is not surprising at all that 87% of Indonesians does social networking and they spend 32.

6% of their online time or 5. 8 hours per month in websites such as Facebook and Twitter Most Internet users (84. 2%) in Indonesia use Search to find information they are looking for. The average number of Searches per user is 91. 4. 80% of Indonesian Internet users uses Google to do their Search. Above data is higher than others Southeast Asia country. Considering its high economic and Internet user growths, Indonesia has a great potential for Internet business. However, it would not be easy to win in this industry due to online gambling is specially industry in Indonesia.

External analysis- Conclusion Considering its high economic and Internet user growths, Indonesia has a greater potential for Internet business compare others Southeast Asia. Moreover, the Internet business there is still in a very early stage with a limited number of local players and products/services offered. However, it would not be easy to win in this industry. Unsophisticated payment infrastructure and conventional mind-set of its people will become the biggest challenges for entrepreneurs and investors who want to explore Indonesia’s untapped potential in Internet business.

The general message is that entrepreneurs and investors with long time horizons should look at Internet business in Indonesia as an alternative worth considering depending on the nature of the investment and the risk tolerance of the entrepreneur or investor. Internal analysis-Customer Behavior analysis Common Casino games of Indonesian Members play. * Baccarat * Blackjack * Sic Bo Current Indonesia Members’ Behavior Following table is current Indonesia members’ behavior of deposit and wager, the data is base on my current company data. Indonesia Business Performance

Annual stake generated: € 14. 3 Million and revenue generated € 657, 000(third higher than others Southeast Asia) Competitor analysis-4P analysis For now total have 4 major competitors doing business in Indonesia market Analysis above the data, doing online gambling business in Indonesia, should offer more competiveness product and promotion to attract new customer due to the current Indonesia member generated revenue is higher than existing market, additional the External analysis, new market as Indonesia has a greater potential for Internet business.

References * Rocky Fu (August 2009)China Internet Market Size in Q2 2009 * Internetworldstats(July 2010) China ecommerce and Internet Market Report * casinolistings(2009)The future of gambling in China * Casino King David Information as thing, Gambling History in China * Gamingzion (2007) Information as thing. Gambling in China * Economy watch(2010) Malaysia Economy * Tom B. (2010) Information as thing. Chinese Law Enforcement Rounding Up Illegal Online Gambling Operators * Michael F. (2010) Information as thing.

Journal of the China Arrests 3,430 with Online Gambling Ties * Asiaplace (2009) Information as thing. Malaysia Cracks Down on Internet Gambling * KEN NG, Klang(2009) Information as thing, Legalise online gambling * Cyrildason(2010) Information as thing, Sports Betting in Malaysia * Brian M. (2010)Online Gambling in Malaysia Most Popular in Sarawak * TomWeston (2008)Online Gambling Grows in Popularity in Thailand * CoolFounders (2010) A broader look at Indonesia startups and internet Business prospects * MR. SUNDERASAN(Oct 2009) PESTEL analysis of Indonesia * Water & stone (2010) Indonesia online 2010.

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