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Exporting to Indonesia – the secret to success

It’s difficult to overstate how promising a market Indonesia is for the building and interiors sector. It has the fourth largest population in the world and a surging middle class, which means there is a chronic need for new housing – over one and a half million new housing units are needed each year simply to keep up with demand. A $780m ‘One Million Homes’ programme is underway, but this will not be the end of the housebuilding in Indonesia.

Add this to new hospitals (Indonesia has the worst ratio of hospital beds to people in Asia, and has launched a healthcare building campaign to combat this) and $70bn of infrastructure investment up to 2020, and it is clear that Indonesia offers incredible opportunities for exporters – all in a stable, thriving market economy.


What are the barriers to market?

So why are more international sellers not making money in Indonesia? Distance is one thing – for European or US companies looking to tap into the market, Indonesia is a long way away. It’s not just the distance to Indonesia, but the distances within the country as well – Indonesia is not just Jakarta, and getting products to thriving regional markets needs expert knowledge of local legislation, tax and infrastructure.

Also, Indonesia is a stable market economy with a long history of welcoming international business, but its import and tax laws can be hard to navigate for a newcomer. This means making good contacts in the market will make things much easier.


How can you take the first step into the market?

Talking to companies that successfully sell to Indonesia’s booming market, particularly in the building sector, the one common theme is how vital it is to find a trustworthy local representative. This can be a distributor, an export representative or a sales agent – the most important thing is to find a reliable partner for a long-term relationship. “Choosing the right partner is extremely important: someone to share and have a learning experience with as you enter the market in Indonesia,” says Irish architecture and engineering firm PM Group, in this excellent guide to the Indonesian market produced by Enterprise Ireland. “Building strong relationships and trust at the outset is very important, with the client and the partner.”


How do you find a local partner?

To find the right local partner, Indonesian business culture comes into play. Face-to-face relationships are obviously important in every market, but for Indonesia they are vital – Indonesian buyers make decisions based on personal factors, and they will not do business with you unless you get to know them in person. Emails and phone calls are not going to cut it.

It is also unlikely you’ll settle on the right partner straight away, according to Lowe Engineering, a British company that exports heat exchangers to Indonesia. “Like a lot of Asian countries, the Indonesians use buying agents,” the company told Chamber International. “In fact we had to quote this job to five or six different buying agents. We never deal with the end-user directly but through these agents.”


Where can you find one?


So, going by the experience of these companies, spending time in Indonesia meeting potential local partners is key to successful exporting. And unless you want to spend all month crawling between offices in the Jakarta traffic, it is best to meet them all in one place – like the government-backed Indobuildtech Jakarta construction exhibition, one of the Indobuildtech series of trade events where thousands of Indonesian distributors, buyers and government representatives come to make new contacts and find new suppliers. Talk to us today about taking part.

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