Indonesians going into debt for Blackpink, Coldplay tickets shows dark side of fintech revolution

Indonesia’s rising prominence in the global music scene is encouraging, but reports of people going into debt to buy concert tickets is reason for concern
Online lending has made it easier for people to access loans but also exposed them to scams and the excesses that come with flaunting new-found wealth

Kamala Thiagarajan

Published: 8:15am, 14 Jul 2023

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In mid-November last year, 70,000 people queued for hours to buy tickets to Born Pink, the popular girl band Blackpink’s world tour concert in Jakarta that took place in early March. The British band Coldplay recently announced in an Instagram post that all tickets for its upcoming Music of the Spheres world tour in Jakarta, scheduled for November, were sold out.

For music lovers in Indonesia, there is no doubt that this is a great time to enjoy international music, and not just because Blackpink and Coldplay are making stops in the country. Citing records from the Ministry of Finance, a report by MUC Consulting indicates the rise of music concert events in recent months have been so significant that they have helped boost local entertainment tax revenues.

In January and February, concertgoers generated an income of 28.85 trillion rupiah (US$1.9 billion), up from 23.6 trillion rupiah during the same time the previous year.

While this might seem like something to be celebrated, a Bloomberg report has exposed how some locals are resorting to online lending to get into these concerts, much to the alarm of the country’s financial regulator. The Financial Services Authority has warned Indonesians to stay away from “buy now, pay later” services just to purchase concert tickets.

There is a genuine cause for concern. The country’s outstanding loans through digital platforms totalled 51.5 trillion rupiah in May 2023, up a whopping 28 per cent from just a year ago, according to Bloomberg.

The regulator also warned against getting scammed by fake lending apps. Reports indicate that predatory loan apps are booming after the Covid-19 pandemic, exploiting people and capitalising on their economic hardships.

Rosé of Blackpink performs during the 2023 Coachella Valley Music and Arts Festival on April 15 in front of adoring fans. Tickets to the group’s Jakarta concerts were sold out soon after they were released. Photo: Getty Images for Coachella/TNS

The rise of fintech and digital loan apps have democratised the banking process, making it easier for people from lower-income groups to secure lending. This progress also has a downside, though: such quick access to money can promote more reckless spending and consumerism, a risky prospect in a country with a large youth population.

More than half of Indonesia’s 270 million people consists of people between the ages of 18 and 39. A great deal rides on their success and productivity as they are expected to build the nation’s future.

But the sole issue here isn’t just that young people might be tempted to fritter away their money. The deeper story behind e-commerce in Indonesia tells a tale that is full of contradictions. Even today, an estimated 90 million people in Indonesia remain unbanked and don’t have access to a traditional bank account.

Serving this unbanked population is a priority for the government. At the same time, advising a tech-savvy younger generation that is increasingly exposed to the risks of fintech is emerging as an essential need as well.

Like many Asian economies, Indonesia is now grappling with the rapid changes ushered in by unprecedented e-commerce growth. It is the world’s 11th-largest market for e-commerce with a predicted revenue of more than US$44.8 billion this year, placing it ahead of Brazil.

Much of the e-commerce revolution in Indonesia can be accounted for by its rapidly growing middle-class population of nearly 52 million people, according to World Bank estimates. As a result, young Indonesians differ from their parents’ and grandparents’ generations in one vital aspect: they have more disposable income and a much more significant digital presence. Both these factors can explain Indonesia’s emerging influence as a major Asian hub in the music scene.

According to a UN report, the music industry is among the fastest-growing of the 16 creative economy sectors in Indonesia because it embraced digitalisation. During the pandemic, Indonesia became one of the top Southeast Asian streaming hubs for Spotify. More than 50 per cent of the workers in the music industry use e-commerce to scale up their production and expand their market presence.

Coldplay will perform in Japan, Taiwan, Indonesia, Malaysia, the Philippines and Thailand from November to February. Photo: EPA

This is true of other sectors in the country as well. In terms of internet users and retail e-commerce sales, Indonesia topped other regional countries such as Malaysia, the Philippines, Singapore, Thailand and Vietnam in 2021.

There is no denying that going digital has simplified and enriched people’s lives in many ways, but it is also fuelling a “wealth flex” culture. Flaunting wealth online is now routine and can lead to violent crimes. It can also create unrest and public backlash, especially for elected officials. In March, a report by The Jakarta Post revealed how Indonesian President Joko Widodo urged civil servants to refrain from showing off their wealth on social media.

Whether it is flaunting new-found wealth or people buying concert tickets they can’t pay for, it is clear the social, psychological and cultural implications of the fintech and digital revolution is something we have not yet fully comprehended. One thing is for sure: it is challenging for governments not just in Indonesia but across the developing world.

Kamala Thiagarajan is a freelance journalist based in Madurai, southern India