Taking another look at Indonesia

Paul O’Brien was apprehensive before his first visit to Indonesia earlier this year.

“I thought of it as being dodgy, grubby and poor and wasn’t that keen on going. After a week, I was a convert. My perceptions were so wrong and so dated,” says the CEO of natural products company good Health Limited.

What O’Brien found over a week of business engagements around Jakarta were classy malls, good transport and roads, and friendly, generous people with a passion for health and education and a keen interest in getting ahead.

“I also walked the streets day and night, and felt absolutely, perfectly safe,” he says.

Indonesia is already New Zealand’s largest market in Southeast Asia and ranks seventh on the list of our trading partners globally.

Despite its importance, New Zealand Trade and Enterprise’s (NZTE) trade commissioner for Indonesia, Grant Fuller, says it’s easy to let outdated ideas about the country obscure the potential.

“Many New Zealand businesses still think rocky financial institutions, bombings and bird flu when they consider Indonesia, but the reality is quite different.

“Asia is one of the few regions of the world likely to continue a comparatively strong economic performance this year and it’s countries like Indonesia that provide real opportunities for New Zealand companies to increase export revenues and growth.”

Statistics paint a compelling picture. Indonesia is forecast to enjoy GDP growth rates of between 2 and 4 percent in 2009 and is on track to rank among the world’s top economies by 2050.

The market is huge with a population of 235 million spread across more than 17,500 islands.

Many people live on the breadline, but there is an emerging middle class with the drive and the purchasing power to buy imported products.

And it’s that domestic demand that is significant, says Fuller, given the current global economic crisis.

“Exports generate less than 30 percent of GDP in Indonesia so the economy is effectively sheltered from declining export markets. It is well placed to continue to grow and prosper, irrespective of what happens in other regions.” 

Nutritional supplements

Good Health’s Paul O’Brien had a strong incentive to get over his reticence about visiting Indonesia in January this year.

The company’s Asian export manager was ‘fizzing’ after a scoping trip last year and Good Health has since established a multi-level marketing (MLM) network selling dairy-based nutritional supplements.

Indonesia is now the company’s fastest  growing market and is expected to become its biggest overall market by the end of 2009.

O’Brien says MLM, which involves a hierarchy of distributors, sub distributors and sellers, works well in Indonesia.