Did you know that Indonesia is the biggest economy in South East Asia and the 16th largest in the world? With a population of 250 million and a growing middle class it is predicted to be the 7th largest world economy by 2030.
All this means that Indonesia is a great place to do business. Here we explore the market in more detail and identify the recipe for success.
The aspirational middle class have growing influence – they are brand loyal and tech savvy and are the fourth largest Facebook and fifth largest Twitter users worldwide. This aspiration is driving growth in education, healthcare, finance, professional services, oil and gas, IT, infrastructure projects and retail.
So what are the challenges of accessing the Indonesian market and how easy is it to get a foot in the door?
Well there are still concerns about corruption and transparency and the regulatory nature of the business environment. Logistics can be a challenge and infrastructure is still underdeveloped but there is a lot of investment in this area. And finally there is the concern about whether the workforce have the right skills to deliver business growth.
So the message here is all about due diligence – do your research!
Take the education marketplace as an example of current opportunities. Indonesia’s aim is to have 500 vocational institutions and they are keen for international support. They are also seeking training in management skills, engineering and English language. There is also a market for specialised training in professional development, finance, tourism and the oil and gas industries.
There are two and a half million teachers in Indonesia and over half of them require additional qualifications. Tertiary institutions are also keen to develop their credibility by developing partnerships with international providers. And there have already been some educational successes – a new University of Cambridge qualification was recently launched and the University of Newcastle has signed an Memorandum of Understanding to deliver a new Medical Doctoral degree.
So how can you ensure success in the Indonesian market?
Well firstly choose a good partner and do your research. Business is very relationship based and communication is of paramount importance – you must be prepared to visit as email is not considered to be an optimal way to do business. Adapt to and follow the local etiquette and be flexible – particularly around meetings and appointments.
Be price sensitive and also expect questions and be prepared to respond quickly. Make regular trips and show commitment to Indonesia – the key is to develop and maintain relationships even after the deal is done.
And above all be PATIENT – consensus takes time although be prepared for the fact that once decisions have been made things may move quickly. The rewards will be worth the wait!
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