Young people are facing significant debt issues due to borrowing money to purchase tickets for concerts, particularly those of the famous K-pop girl group BlackPink.
The national financial management agency must remain vigilant about the increasing use of online loans among young people, which is resulting in a substantial amount of debt. Many of them find themselves unable to repay these loans, solely because they wanted to attend concerts of their favorite foreign idols, according to a report by the SCMP.
For instance, in November 2022, approximately 70,000 people queued for hours to buy tickets for Born Pink, a concert that was part of BlackPink’s world tour in Jakarta, Indonesia. Similarly, the upcoming Music of the Spheres world tour by the British band Coldplay also saw all its tickets sold out for the Jakarta show scheduled for November.
Conversely, the situation for BlackPink’s concert in Hanoi on July 29-30 is not favorable. Many ticket-holders are selling their tickets at a loss, hoping to recover as much as they can. However, it is essential to recognize that selling out tickets doesn’t always indicate a positive outcome.
The love for international music, particularly the chance to see famous artists like BlackPink and Coldplay, has created a great opportunity for music lovers in Indonesia. This has significantly contributed to the local entertainment tax revenue, as records from the Ministry of Finance and the MUC Consulting report show an increase in concert events in recent months.
While this may seem like good news, there’s a downside to it. According to Bloomberg, some local concert-goers are resorting to online loans to finance their attendance at these concerts. As a result, the Financial Services Authority has issued a warning to Indonesians, advising them against using “buy now, pay later” services solely for purchasing concert tickets.
This caution comes as the country’s outstanding loans through digital platforms have seen a significant increase, reaching 51.5 trillion rupiah in May, marking a 28% rise from the previous year. The regulator has also highlighted the risk of falling victim to scams by using fake, high-interest loan apps. These fraudulent practices, especially during the challenging economic times brought on by the COVID-19 pandemic, exploit people who are already facing financial hardships.
The rise of digital lending and financial technology has indeed provided more access to loans for individuals from low-income backgrounds. However, it has also led to a surge in consumerism and reckless spending, creating a risky financial situation in a country like Indonesia, which has a substantial young population.
With more than half of Indonesia’s 270 million people aged between 18-39, this generation plays a crucial role in shaping the nation’s future. The issue at hand is not merely about their penchant for lavish spending; it is also rooted in the fact that around 90 million people in Indonesia do not have access to traditional banking services, leading them towards riskier digital lending options.
As e-commerce continues to grow rapidly, Indonesia has become the world’s 11th largest e-commerce market, with a projected sales figure of over $44.8 billion for that year. This growth can be attributed, in part, to the burgeoning middle-class population of nearly 52 million people, according to the World Bank.
It is essential for the government to address this situation with a two-fold approach: serving the unbanked population while also educating the tech-savvy younger generation about the potential risks associated with financial technology. This way, Indonesia can continue to enjoy its booming music scene, attracting top music groups like BlackPink and Coldplay, without compromising the financial well-being of its youth, who are instrumental in building the nation’s future.
According to a United Nations report, the music industry is experiencing significant growth in the creative economy, primarily due to the application of digitalization.
Amidst the pandemic, Indonesia has emerged as one of Southeast Asia’s leading streaming hubs for Spotify. Over 50% of workers in the music industry are utilizing e-commerce to enhance production and expand their markets.
This trend extends to other sectors in the country as well. In terms of Internet users and e-commerce retail sales, Indonesia has outperformed neighboring countries like Malaysia, the Philippines, Singapore, and Thailand in 2021.
While digital transformation has undoubtedly brought about numerous benefits and enriched people’s lives, it has also fostered a concerning culture of “get rich on trends.”
A prevalent habit among many individuals is showing off their wealth online, which can lead to an increase in violent crimes and create public unrest, particularly when aimed at elected officials.
In March, The Jakarta Post reported that Indonesian President Joko Widodo urged civil servants to refrain from flaunting their wealth on social media.
Whether it involves flaunting newfound wealth or people purchasing concert tickets they can’t afford, the social, psychological, and cultural impacts of the fintech and digital revolution remain areas that we have yet to fully comprehend.
However, one thing is certain: this poses a formidable challenge for governments not only in Indonesia but across the developing world, SCMP reported.