As many markets in Indonesia are growing and some are just emerging, the country offers an interesting potential to sell your products and services.
Many industries and sectors are depending on the import of goods, tools, machinery, equipment and the growing demand of FMCG, F&B and many more will keep Indonesia a country with a strong dependency on imports.
However, for buyers and sellers it is difficult to find each other and get together. Apart from the spatial distance and the cultural differences, the lack of local presence of many foreign companies in Indonesia is a hindrance to get into the market and make their products and services visible to the Indonesian customers and consumers.
The problem - the connection with the local market
For foreign companies it is difficult to establish reliable and solid contacts with potential customers in Indonesia and to build the necessary relationships for successful sales if there is no local presence. Of course, it is always possible to present products and services to a wide audience in Indonesia through trade fairs and exhibitions.
But this is not always sustainable and keeping track on leads and potential buyers becomes difficult after the exhibition is over and the sales guys have left the country. Indonesia is a country where personal contacts and relations make the deals. Follow up of leads, contacts and projects from a distance turns out quickly to be complicated, inefficient and does not bring the desired results.
In Indonesia the personal presence of a sales contact and the direct approach of potential buyers on the ground is essential. Getting good opportunities, running sales and closing deals from the distance is almost impossible because Indonesians buy primarily on the basis of trust and a good and long lasting relationship.
For sales managers who fly in two or three times a year to Indonesia it is almost impossible to build and maintain the relations which are necessary for successful sales
Customers in Indonesia do not buy impulsively. Making deals and negotiating contracts with Indonesian buyers are a marathon and need endurance and permanent presence. The direct personal communication and availability are important factors when making business in Indonesia and cannot be replaced by e-mail, telephone or video conferencing.
Establishing the customer relation is a challenge
The question is now: how to overcome these problems as a foreign company? How can you increase your market presence and sales activities in an efficient and effective way? How do you find, connect and stay in touch with buyers and how can you run your sales in Indonesia at all?
Sending a sales manager from your headquarter to Indonesia on frequent business trips might not be the best choice as the limited presence does not fit to the way of establishing connections and doing business in Indonesia.
The easiest way is to have a local presence in Indonesia but there come the next hurdles. Opening a local office such as a sales representation is going together with registration process, a local setup, administrative works and certain legal and fiscal compliance liabilities. Getting the ball rolling you need local employees and might need to send one of your sales guys to Indonesia on a permanent basis incorporating all the stay and work permit issues. All in all this means that you spend a lot of time and money for the admin stuff rather than being active in sales activities.
A very common way is to find local distributor who is taking over the representation works for you. Looks like a cheap and easy solution on first sight but might turn out not be as good as it sounds. Many times local distributors have competitors’ products in their portfolio and you cannot be sure if your product is offered to their buyers as first choice or in an appropriate way. Also many local distributors do not go pro-actively to the market. They act more like a shop and wait until customers come to them asking for a specific solution or product and then offer them what they have on stock.
The question of the distribution channel
Sales trips for establishing good and promising customer contacts are not the first choice to get a foot on the Indonesian market.
One option we mentioned above, is the involvement of a local distributor or agent in Indonesia. The company takes the products or services into its portfolio and, in turn, offers these to its customers or tries to establish customer contacts and acquire orders. However, cooperation with a local company as a distributor or agent is not always easy and sometimes cause more pain than gain.
The first difficulty is to find a suitable and reliable distributor company in Indonesia which is willing to put your products into their portfolio. Of course you will get in touch with many friendly and helpful people on exhibitions or my searching on the web for local partners but how can you make sure that you can trust them, if they have the sales channels they promise, are reliable and help you really to run your market entry?
To get reliable information about the potential partner might become difficult. Websites of Indonesian companies, if at all available, are not particularly meaningful. Databases or company directories also give little information and to investigate on their particular trustworthy is almost impossible for a foreigner.
If you are in the lucky position to find good partner you will need to keep track on their performance, the way they promote your products and have to support them strongly in doing so. Difficult to maintain this from a distance and by some business trips a year.
Another possibilities is to setup your own local sales representative office. This will bring you in direct contact with the market and your customers will have a contact person on the ground. But as we talked already this goes along with a registration process, administrative setup and is thus associated to cost and an strong commitment to the market. If you have already solid business connections and sales activities a representative office is a logical step but for a newcomer it is many times a unnecessary burden and a costly first step. You never know how your local performance will develop and to wind up an existing office in case of an exit is hard to accomplish.
The best solution to get in to the market is to have a person on the ground who is connecting for you, looking for leads and business opportunities and helping you to get the good deals.
As a "newcomer to Indonesia" searching for this it often happens that you receive offers from rather dubious people telling you to work free, but "only" require a small commission to get your products into the market. Only too often it happens that they ask you for some thousand bugs here to cover their travel costs or some thousand bug there to pay for some “expenses” to get a project. By this you can quickly run into costs of some ten thousands US-Dollar without knowing what’s going on and, in the worst case find yourself in paying some bribes without even knowing it.
Agents & facilitators bear unpredictable risks
The so-called helpful "facilitators" usually bring more difficulties than lucrative business, even though they promise you a great deal (for example, "good contacts", invitations to investor journeys, meetings with supposedly important political representatives, etc.) and promises. Whenever you meet such a person take utmost care. Nothing is it seems and being promised.
What choices do you have to get a secure and good start?
We mentioned already that you need a person on the ground but one whom you can trust, you can control, you know what they are doing and at the same time are actively helping you to support you on the market.
The best way to accomplish this is to get a good business development consultant who can serve you with this.
This consultant will help you to select the right people who understand your product, have good connections and conduct sales activities for you. At the same time you have an adviser at your side who can tell you objectively what is possible, where the opportunities are and what steps you need to take to increase your market share or to settle in the market. Of course you will have to pay for this as well but many times the costs for such a service are less than you would spend for many business trips to Indonesia and are a good and secure investment into your future business.
If this sounds like a plan to you, Indoconsult will appreciate to assist you. We offer Sales Force Indonesia to foreign companies, getting a secure and promising path into the Indonesian market. Within the last years we helped foreign companies to make the first steps to Indonesia and helped them to run successful and sustainable business with Indonesian customers.
Just contact us and we will find the ideal solution for your Indonesia sales.