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Business trends

Indonesian property tycoon eyes blockchain in digital push

Lippo Group founder sees "no merits" in U.S.-China trade battle

Mochtar Riady, founder and chairman of Lippo Group, speaks during the Nikkei A300 forum in Tokyo on May 21. (Photo by Kohnosuke Urata)

TOKYO -- Mochtar Riady, founder and chairman of Indonesia's Lippo Group, on Monday said he is pursuing blockchain technology to accelerate the digital transformation of the property-to-banking conglomerate.

Speaking on the sidelines of a forum in Tokyo hosted by Nikkei, Riady, who turned 89 this month, called the technology behind blockchain "simple" and said it is "very useful" for improving the security elements of business. He added that the group is already considering the use of blockchain technology in its e-commerce business, without further elaborating.

One person close to the group said it is also looking to invest in blockchain startups.

Riady's remarks highlight the urgency among conglomerates in Asia's emerging markets -- where digital services like ride-hailing and e-commerce are taking off, thanks to widespread use of affordable smartphones -- to adopt digital technology in their businesses.

Riady made his name turning around Indonesia's troubled banks before establishing Lippo, which has grown into a sprawling conglomerate that has businesses in malls, apartments, hospitals and more. The group churns out some $7 billion in annual revenue, according to Riady, and U.S. magazine Forbes ranked him ninth in its Indonesia rich list with a net worth of $2.9 billion.

Lippo Group's assets include Lippo Village, a township in the outskirts of Jakarta. (Photo by Shinya Sawai)

Like many family-owned businesses in Southeast Asia, Riady has been spearheading a digital makeover of Lippo in recent years as tech-savvy startups increasingly become a threat to its malls and supermarkets. The group runs an online shopping platform, mobile payment service and a venture capital fund that invests in startups across the region. John Riady, the third-generation executive who oversees the group's digital operations, told the Nikkei Asian Review last year that it will invest $100 million every year to build its "digital muscle."

During Monday's forum, Riady said the rapid growth of digital services will have "some influence" on physical retailers but stressed that "if we are able to match human needs, you will find a way to survive." He called for an "offline and online" strategy that caters to demands for human interaction.

Riady, who was early among Indonesians to expand abroad and adopt modern management styles, said "there is a deep division of labor and interdependence in the world" and that the current trade friction between the U.S. and China will create "no merits" on either side.

"Trade war cannot solve the problem," he said, before adding that "President Trump and President Xi Jinping are great ... [they] will coorporate eventually."

While Lippo, one of the country's largest property developers, is known to be well-connected in the political community, Riady said it was important to "keep some distance" with politicians. "We buy purchased lands. We don't buy from government, but from the private. When we do business, our customers are the public, not the government."

Riady, whose father immigrated from China, said he has known Xi "for a long time" and called him a "humble" person who "always asks me about how I run business in [a] capital market."

Kenji Kawase, Nikkei Asian Review chief business news correspondent, contributed to this story

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