Export Britain

Why do business in Indonesia?

Chris Wren is the Executive Director of BritCham Indonesia - for the latest updates follow @Britchamindo

Now, BritCham Indonesia is very well resourced to help British SMEs to navigate the turbulence. From video chats with experts that are really already ‘doing business’, to opening possible partnership networks, to guidance on visits, we must be an integral part of your risk management and market entry strategy.

Chris Wren

21 July 2014

I am often asked if the environment for doing business in Indonesia has changed significantly in the 20 years that I have been in market. As I ponder, I think that it surely must have but then I look at the real challenges to market entry, I think, maybe not. Of course my 20 years can be neatly divided into 2 distinct eras of Indonesian history and civil evolution – the dictatorship regime of former President Soeharto and his family (New Order) and the post New Order democratic era which has just presided over the fifth democratic presidential election.

During New Order time, the proposition for success was quite simple. Choppy waters were easily navigated by well-established and well-funded larger organisations that get access to the ruling family and bring them in as partners for a percentage. This was the simple way to manage risks such as regulatory change, legal uncertainty, bureaucratic red tape and unwelcomed competition. 

The choppy waters remain as choppy now as ever they have been. Yet there is more interest in market access to Indonesia, particularly among British SMEs. But why? Probably two factors significantly answer that question. Firstly, the low-hanging fruit in the smoother waters of Europe and the States hangs lesser and higher. Secondly, much more is known about the opportunities in Indonesia. BritCham claims much of the responsibility for that. Let’s face it, who can ignore the headline stats – 245 million people; half the population under 32 and the middle class growing by 3-5 million a year; a comfortable average of 5’5% GDP growth and the only ASEAN country with a position at the G20. Compelling indeed.

But, the UK Bribery and Corruption Act has put an end to the route one approach as a one-stop and very assured market entry strategy. Instead businesses have to do the hard yards doing all those very necessary pre-entry things such as research, visits, exhibitions, finding, filtering and appointing partners, agents and distributors, the right company formation structure, tax planning etc. Short cuts result in failure. Patience and setting aside proper funding for the strategic goal of market entry and sustainable development and growth results in a very exciting and rewarding adventure. Now, BritCham Indonesia is very well resourced to help British SMEs to navigate the turbulence. From video chats with experts that are really already ‘doing business’, to opening possible partnership networks, to guidance on visits, we must be an integral part of your risk management and market entry strategy.

A closing thought: pragmatism and a credible helping hand can provide access to the third largest democracy in the world, access to low-hanging fruit across an archipelago that spans the width of Europe. BritCham Indonesia is here to help.

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