5 Steps to the Indonesian Market

Entering an overseas market can be costly – and risky. Here are five tips to help you market Indonesia is ASEAN’s largest consumer market. Not-with-standing the present economic slowdown Indonesia’s economy has been growing steadily, resulting in the concomitant rising of the proportion of its middle-class population. Numerous sources indicates that the middle class now represents circa 30 percent of the Indonesian population, or more than 70 million people, and that group will grow far larger in the coming decade, in both absolute and percentage terms. Prior to the present economic slow-down some 8 million people graduate to the middle class segment each year. At this rate, according to a BCG report, by 2020, this group will reach a total of 141 million people, or 53 percent of the population. At that point, the island of Java alone will have more middle class population than the entire population of Thailand, Malaysia and Singapore.
In turn, the consistently enlarged middle class population will likely bring a wave of consumer spending on day-to-day fast moving consumer items, greater ownership rates of homes, vehicles, and white goods like consumer electronics; and increased adoption of services such as financial counseling and education.
It is not surprising therefore that the large pool of potential middle class consumers moving from ‘must have’ to ‘nice to have’ purchases together with the newly found drive from among the nation’s governing elites to attract even more foreign investment into the country is bringing in global companies into the Indonesian market.
Being global or even multinationals however provides little guarantee that you will be successful in Indonesia too.
I shall not delve into details of strategies which have propelled some players into tremendous success or others into forever wannabes but instead I want to offer you 5 simple steps which I know will be useful as you enter the Indonesian competitive landscape.

1. Do Due Diligence
Your very first step is always to carry out market research. The market research I am referring to here is not simply about buying data from research companies but more precisely it is gaining an understanding of the soft as well as the hard aspects of the market. Research data is an important tool to help you gauge market trends, consumer insights, competition and policies but you will also need to supplement that with the personal ‘feel’ of the market.
• Talk to local people when gathering empirical data (some renowned research agencies do actually gather their data from interviewing industry players with little, if at all, groundwork.)
• Acquaint yourself with your target consumers.
• Identify and monitor your domestic competitors.
• Keep yourself informed of changes and appraised.

• Don’t spend too much time on research, as the market is rapidly changing.
• Don’t take everything at face value. Indonesian are extremely polite and

2. Value proposition
‘Made in Britain’, ‘Made in Japan’ can be an advantage.
Indonesian love brands and products from advanced nations. If you are the sole UK brand in the market, congratulations! You are in a very strong position. However, it is not enough to pitch your products as ‘Made in Britain’. You will need to discover and maintain a unique selling point that can convince Indonesian consumers, as well as differentiate your brand from others.
Tips: To find the right proposition, start by identifying the Indonesian consumer’s issues. Then find the link between your product and those issues, while addressing how your products can help the consumers to solve their problems.
To name a few: Indonesia concerns about education, food safety, baby food, baby products, health, skincare; and, about social standing, image and peer approval.
3. Make your product available to consumers in Indonesia.
• Decide how you are going to distribute your products. The Indonesian market is divided into traditional and modern. The complex geographical element of the country often calls for significant attention be given the way your product is to be distributed.

4. Build aspiration among Indonesian consumers
• Have exposure on popular social media websites, such as facebook, Instagram, Snapchat. Millions of Indonesian accesses these sites daily if only to quickly update their status. Use other relevant platforms to create content about your products and brand.
• Tell your target audience about your brand.
• Promote ‘acceptability’ by building the right association for your brand.

5. Engage with your Indonesian consumers
• While no population is homogenous, Indonesians share some characteristics that companies must understand. These consumers tend to be extremely family oriented. Family is a major influence. Indonesians emphasize the needs of the family over those of the individual, and this dynamic underlies most, if not all, purchasing decisions
• Although Indonesian typically justifies indulgences and large purchases based on functionality and benefits for the family more than on other attributes, the intangible emotional values offer by a brand, however, can strongly influence buying decision. Get involved with the things they love and give them opportunities to emotionally connect with you.
• Bargain hunting is an integral part of the Indonesian shopping pattern. The weaker your brand the more susceptible you are to price pressure.

Posted in Articles, Perspectives to Ponder Upon, Rudolf's Articles.