Export Potential in Indonesia
10 January 2014
Export Potential in Indonesia
Indonesia may not be as big in land mass and population as China, but it is in every other sense of the word because of its limitless opportunities for businesses–large and small alike. Here I take a look at Indonesia and why you should consider this vibrant market for exports and sourcing products.
The Land
With a population of 251 million (Source: CIA – The World Fact Book on Indonesia, July 2013 est.), Indonesia is the fourth most populated country in the world. It has posting the fastest population growth in its region for 15 consecutive years and is the world’s largest Muslim country. Indonesia’s young consumers are largely debt free, providing opportunities for future spending.
The country’s population stacks up against other countries as follows:
China: 1.3 billion
India: 1.2 billion
United States: 317 million
Indonesia: 251 million
Brazil: 201 million
With 17,508 islands, Indonesia is the world’s largest archipelago (chain or cluster of islands), spanning 735,358 square miles. The climate is typically tropical, hot and humid. The languages spoken are Bahasa Indonesia, English, Dutch and local dialects.
Growth Prospects
According to World Bank (http://export.gov/indonesia/considerindonesia/index.asp), Indonesia continues to post significant economic growth. World Bank goes on to say, “As of March 2013, the country's economy baseline outlook for growth is expected to be 6.2 percent in 2013 and increase to 6.5 percent in 2014. The country’s gross national income per capita has steadily risen from $2,200 in the year 2000 to $3,563 in 2012.”
The U.S. Department of State, through its U.S.-Indonesia Comprehensive Partnership, says, “Two-way goods trade grew to $23.4 billion in 2010, and in the first half of 2011 U.S. goods exports to Indonesia expanded by 17 percent year-on-year while imports from Indonesia grew by 22 percent.”
Most of Indonesia’s success is largely homegrown. Meaning, domestic consumption (roughly 60%) has enabled Indonesia to grow faster than its neighbors, such as Singapore, whose economy is more dependent on import/export trade and therefore more vulnerable to slowing export demand. Indonesian exports are worth about 25% of the country’s economy.
Homegrown Products
The products Indonesia is best known for are rice, peanuts, cocoa, coffee, palm oil, coal, poultry, beef, rubber, textiles, apparel and footwear.
Exporting to Indonesia
If you are interested in exporting to Indonesia, your best approach for entering the market is to work with local agents and distributors. The U.S. Commercial Service Jakarta helps U.S. companies identify and qualify potential Indonesian representatives. Check with the organization to see how it can help you get started (refer here: http://export.gov/indonesia/marketresearchonindonesia/index.asp). Once you find a qualified representative, visit the market and meet with him/her. Relationships are important to Indonesians. And they base a lot of their decisions on receiving competitive pricing, creative financing and after-sales service. Treat your representatives well and the return to your business will be increased revenues and profits.
What do Indonesians need? They seek infrastructure development. U.S. industry is well positioned and qualified to supply the kinds of architectural, design and engineering services and project management skills needed to successfully tackle major projects in Indonesia.
