business expansion in Indonesia

7 Actionables to Successfully Expand Your Business in Indonesia (+With Case Studies)

InCorp Editorial Team

Table of Content

Four years ago, the Indonesian community was stirred by the arrival of the ice cream and tea store featuring its chubby mascot, Mixue. It quickly drew crowds of eager customers lining up to taste the viral ice cream. Not long after the opening of its first store, the China-based ice cream did business expansion in Indonesia almost simultaneously across Indonesia. The rapid expansion of Mixue’s ice cream and tea stores in Indonesia garnered widespread attention. 

Netizens even affectionately dubbed Snow King, Mixue’s snowman logo, as the “Angel of Vacant Store” due to its swift proliferation across cities. This is one of the recent success stories of foreign brand expansion done right in this country. Numerous foreign businesses have achieved remarkable market penetration in Indonesia. Grab, a Singapore ride-hailing company, stands out as one of the most widely utilised ride-hailing services across almost every city in Indonesia. 

Similarly, Skintific, a Canadian-Chinese skincare brand, swiftly cemented its position as a staple among Indonesian skincare enthusiasts, often being mistaken as a local skincare brand due to its popularity and presence in the market. All of these businesses operate on different models and marketing strategies, yet they each successfully reach top-of-mind awareness in the new country. 

If there is anything that we need to learn, it is that you don’t have to be a gigantic multinational company like Samsung or Coca-Cola to successfully expand your business to the Indonesian market. Leveraging its dynamic and diverse consumer base, Indonesia offers a fertile ground for businesses of all sizes to thrive and carve out their niche in this rapidly growing economy.

Understand the Market Dynamic, Adapt, Localise

Before venturing into Indonesia’s bustling marketplace, it’s essential to gain a comprehensive understanding of its unique dynamics. Conduct thorough market research to assess consumer preferences, competitive landscape, and regulatory frameworks. By understanding the market nuances, you can tailor your business strategies to resonate with local demands and capitalise on emerging opportunities effectively.

Now, let’s go back to Grab’s successful story. Upon its first entry into the Indonesian market, Grab encountered formidable competition from two major players: Gojek, Indonesia’s startup unicorn, and Uber, the globally renowned ride-hailing giant. However, Uber struggled to gain a foothold in Indonesia’s market despite its success in various parts of the world. It eventually closed its office, leaving Grab and Gojek to dominate the scene. 

Grab’s Successful Story

Grab’s success can be attributed to its strong focus on the local market and its ability to adapt to the distinct cultures and languages of the countries it expanded into. This localised approach proved instrumental in attracting a larger user base and capturing Uber’s market share. While Uber aimed to provide standardised services globally, Grab recognised the importance of tailoring its offerings to meet Southeast Asian users’ specific needs and preferences.

Unlike Uber’s one-size-fits-all approach, Grab adopted a hyper-local strategy, prioritising friendly and customised services that resonated with the cultural values of the region. By hiring local talent and developing region-specific services, Grab distinguished itself as a company deeply rooted in the communities it served. 

This localised focus not only helped Grab withstand Uber’s initial dominance but also positioned it as a preferred choice for users seeking personalised and culturally relevant ride-hailing experiences in Southeast Asia.

While the Indonesian market offers vast opportunities for business expansion, it’s crucial to recognise that understanding Indonesian consumers’ unique behaviours and preferences is paramount for successful market penetration. Despite its size and diversity, Indonesia’s consumer landscape is characterised by distinct cultural nuances, purchasing habits, and communication styles that can significantly impact business operations and consumer engagement strategies.

Prioritise Talent Development

A skilled workforce is the backbone of any successful business endeavour. Invest in talent development initiatives to nurture local talent and empower employees with the skills and knowledge needed to thrive in a competitive landscape. By prioritising talent development, you not only cultivate a capable workforce but also foster loyalty and drive innovation within your organisation.

Collaboration with local media agencies can be instrumental in crafting compelling advertisements that resonate with Indonesian audiences. Recognising that different countries have distinct behaviours and preferences, leveraging the expertise of local agencies allows for the creation of targeted campaigns that effectively capture the attention of Indonesian consumers and drive profitability. 

Partnering with local influencers can elevate brand visibility and establish a strong presence in the Indonesian market. Local influencers deeply understand Indonesian culture and consumer trends that help your brands connect with audiences on a personal level, ultimately positioning the brand as a familiar and trusted household name. 

Forge Strategic Partnerships

If Indonesia is an entirely new water for you, try to establish your foothold by leveraging a strategic partnership with a local company. Navigating Indonesia’s business landscape can be complex, especially for newcomers. Forge strategic partnerships with local businesses, government agencies, and industry stakeholders to gain invaluable insights and establish a robust network. Collaborative ventures not only enhance market penetration but also foster cultural understanding and facilitate smoother operations. 

Leverage a strategic partnership with InCorp (formerly Cekindo), which can help you with business setups such as business licensing and company registration, business visas, and in-depth business and legal advisory. You will also need a helping hand to navigate the complexities of Indonesia’s business bureaucracy, something that InCorp can help with all of your compliance documents, due diligence, and legal administration. 

Partner Up with Local Distributors

If your business is based on consumer goods, one of our recommendations is leveraging local agents and distributors to advance your penetration into the Indonesian market. When selecting a local distributor or agent, reliability is non-negotiable. Look for a partner with a distributor’s license and a solid understanding of Indonesia’s business landscape. 

This partner should not only assist with importation procedures and customs clearance but also play a pivotal role in expanding sales within the country. An agent represents the foreign principal, whereas a distributor operates independently in marketing and selling the principal’s goods and services. 

Once both parties reach an agreement, the agency/distributorship agreement and a statement letter from the Attaché of Trade of the Indonesian Diplomatic Representation in the principal’s country of origin need to be submitted to the Ministry of Trade.

Utilise Online Marketplace

If your brands produce consumer goods, one of the easiest ways to penetrate the market is by selling your products through online marketplaces. Why? Because online marketplaces offer a win-win scenario for both consumers and sellers. 

These platforms make your brand easily accessible, provide transparent product information, and maintain a consistent and familiar customer experience. Shoppers trust the marketplace environment, eliminating any second-guessing in the purchasing process. This inherent trust factor significantly boosts the likelihood of consumers purchasing, even if they’re unfamiliar with your brand. 

However, do be selective with your marketplace. Some internationally popular marketplaces like Amazon, Alibaba, or eBay are foreign to most Indonesians. They are more used to the local unicorn marketplaces such as Tokopedia, Bukalapak, and Sociolla (for beauty products) or Singapore-owned marketplaces like Shopee, Zalora, and Lazada.

Deep Understanding of Indonesian Culture

Learning from Uber’s experience, it’s clear that a one-size-fits-all marketing approach falls short in Indonesia due to its diverse cultural nuances. To navigate cross-cultural marketing effectively, thorough market research is essential to understand customer behavior, preferences, and cultural subtleties. 

For example, Indonesians place a high value on family gatherings during holidays like Eid-Al Fitr, Ramadan Month, Christmas, and Chinese New Year, so take notes on that for your tailored, targeted marketing efforts. You can also try to leverage brand ambassadors who speak Indonesian, a strategy that successful Korean skincare brands employ, which can enhance brand connection and resonance with the local audience. 

It’s also crucial to note that pricing, financing options, technical expertise, and after-sales service significantly influence purchasing decisions in Indonesia, highlighting the importance of addressing these factors in business strategies.

Localise Your Contents

To truly connect with your Indonesian audience on a deeper level, localisation of your content is crucial. This means translating every aspect of your communication, from website content to social media posts and product descriptions, into easily understandable Indonesian. However, relying solely on machine translation tools like Google Translate can lead to stiff and awkward translations. 

Instead, enlist the expertise of professionals who not only translate your content accurately but also possess a deep understanding of Indonesian practices and culture. It is not easy to do your localisation efforts alone. Partner up with Elite Asia, a leading translation and business localisation service in East and Southeast Asia, who can help you with:

360° Translation Services: 

There are so many documents for your legal compliance in Indonesia, and you will need a certified translator to understand all the legal documents thoroughly. Not only that, Elite Asia’s translation service covers almost everything a business needs, from document translation, website localisation to social media localisation.

Cultural and Market Localisation: 

Leverage their cultural and market localization expertise provides valuable insights into local customs and consumer preferences, enabling you to tailor your products or services to meet the needs of the Indonesian market. 

Digital Marketing and E-commerce Strategy: 

Get valuable advice on digital marketing and e-commerce strategies specifically tailored to the Indonesian market, helping you maximise your reach and impact in this dynamic and diverse market landscape. 

In Summary

To sum up, expanding your business into Indonesia requires a strategic approach that considers the country’s unique cultural and market dynamics. Learning from Uber’s experience, it’s evident that a one-size-fits-all marketing strategy falls short in Indonesia’s diverse landscape. To effectively penetrate the market, prioritise understanding Indonesian culture, adapt your marketing messages to resonate with local audiences, and leverage local influencers and partners. 

Additionally, partnering with reliable agents and distributors can streamline market entry and distribution processes. Embracing digital channels, such as online marketplaces, and localising your content to the Indonesian language and culture are also essential strategies for success. 

This article has been produced in collaboration with Elite Asia.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

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