……When I pulled out of the banking business in the wake of the 1997 Asian financial crisis, I had no intention of ever returning.
After Lippo Group sold off its banking business, we decided to focus on two areas as our core businesses — land development and the information and telecommunications industry.
As a land developer, the group needed to branch out, not only into retail but also into operating schools and hospitals. Still, I had no plans to re-enter the banking sector. In the telecom market, the group has been preoccupied with new businesses, including a mobile phone venture.
Several years ago, however, Lippo happened to acquire a small bank called Nobu National Bank in response to a request for help from one of my friends.
My friend had wanted to buy the bank, but Bank Indonesia, the central bank, refused to approve the acquisition. My friend asked me to buy it for him under my name.
When the acquisition came to light, the media trumpeted the news with headlines declaring that Lippo had returned to the banking scene. The way I looked at it initially was that I was simply letting my friend use my name, but gradually I became seriously interested in managing a bank again, given this new era of banking.
The growing use of digital technology is transforming banking into a kind of telecom industry as the sector as a whole moves toward electronic banking.
In Indonesia as in other parts of the world, online shopping has become part of the mainstream retail industry. Our retail unit has also set up an e-commerce company.
The rapid growth of online shopping is also driving the spread of electronic money and mobile payments.
Lippo Group has turned Nobu Bank into the core unit for its cutting-edge financial services, including e-money services. The transformative power of digital technology has sparked the fusion of retail, telecom and financial services.
Another example of digital transformation is in the hospital business.
Indonesia is an archipelago composed of more than 10,000 islands. Apart from a few large cities, the level of medical care in the country is very low.
Even if such medical equipment as X-ray machines, CT scanners and MRI systems are available, there are not enough doctors and experts, including radiographers, who can use them to diagnose diseases.
We are exploring the possibility of using artificial intelligence rather than human experts to perform diagnoses. Two business areas that we once considered to be completely distinct — IT and hospital operations — are fusing into one.
I mentioned Meikarta, a new city that Lippo is developing in a Jakarta suburb, at the outset of this series. The city is a comprehensive development project that involves all of Lippo’s businesses, and we expect various fusions will take place there.
Lastly, let me give a brief overview of Lippo’s overseas operations. In Southeast Asia, Lippo Group operates real estate businesses in Singapore, Malaysia and the Philippines. The group is growing its hospital operations in Myanmar and Vietnam, and it is expanding its partnerships with Japanese and Chinese companies in the hospital business.
Lippo Group also has office buildings and shopping malls in major Chinese cities and commercial properties in Australia.
Lippo once expanded its banking business into the U.S., and currently owns a skyscraper in Los Angeles.
Why has a company based in Indonesia, a developing country, been able to expand its operations on such a global scale? The answer can be found on by looking at a map.
To the east of Indonesia is the Pacific Ocean, a huge expanse of water stretching to the U.S. To the north of the country is the Asian continent including China, while Australia is located to the south. To the west of Indonesia is the Indian Ocean, which stretches to India and Africa.
Indonesia is located where the Indian Ocean meets the Pacific, the place where the world’s two economic growth centers intersect and connect with each other.
In other words, Indonesia is a country where Eastern and Western cultures meet and fuse. Some 260 million people live in this country, and the ranks of middle-class consumers are continuing to grow.
Indonesia has an immeasurable potential. I strongly urge anyone who has read my life story and developed an interest in Indonesia to pay a visit to the country. (B/AR/jr)
*) From NIKKEI Asian Review, October 09, 2018 11:01 JST
**) Mochtar Riady is the founder of Lippo Group
