Trading with Indonesia

A report published this week gives exporters an insight into how to profit from the opportunities of trading with Indonesia.

‘Trade successfully with Indonesia’, produced by leading credit insurer Atradius, covers those factors that need to be addressed if export ventures to Indonesia are to be successful. Atradius is also broadcasting an accompanying webinar on this topic.

Indonesia holds immense opportunities for foreign exporters, especially those whose traditional markets are stagnant as economic problems continue to embattle many countries. It is one of the world’s fastest developing economies, whose growing middle classes have a taste for foreign goods and services. Add to that its government’s extensive investment in much needed infrastructure projects and the prospects for foreign businesses become even more apparent.

As the report points out, foreign suppliers need to take time to understand every aspect of the Indonesian marketplace.

A local representative is a prerequisite and choosing one that understands your business is essential. In a country as vast as Indonesia, it is also advisable to engage a distributor with a proven track record.

A business model that works in traditional markets may not in emerging markets like Indonesia. Pricing strategy needs to take into account the cost of distribution – Indonesia is as vast in area as the USA – and average incomes are still considerably lower than in more mature markets. Though there are many channels to promote products in Indonesia, foreign suppliers need to tread carefully. In a country steeped in religion and traditional values, there is a sensitivity to some elements of advertising that are acceptable in other countries.

Intellectual property (IP) theft is always a concern and, while the Indonesian authorities have made considerable progress in combatting IP theft, it can still be a real danger. Foreign exporters should register their patents, trade marks and designs at the earliest opportunity in Indonesia as registration in another country will not protect their rights.

Foreign suppliers must also ensure compliance with Indonesia’s often complex import regulations and take account of import tariffs, which can vary considerably by product.

Indonesian business culture can be alien to those used to trading in western countries. Even the nuances of the Indonesian language can be misleading, and so it is advisable for foreign suppliers to have a fluent Bahasa Indonesia speaker on their team.

The Indonesian legal system is based on the principle of Pancasila, valuing consensus above confrontation. If a dispute over payment arises, the contractual parties must seek agreement through mediation or arbitration before resorting to court proceedings.

‘Trade successfully with Indonesia’ refers to the support that Atradius itself gives foreign exporters to Indonesia, through its debt collection arm, specialising in the amicable debt resolution, and credit insurance giving peace of mind to those exporters seeking to establish valuable trade relationships while avoiding cash flow problems.

The report can be found below as related content.

About Atradius
The Atradius Group provides trade credit insurance, surety and collections services worldwide. With a presence through 160 offices in 45 countries, it has a market share of approximately 31% of the global trade credit insurance market. Atradius has access to credit information on 100 million companies worldwide. Its products help protect companies throughout the world from payment risks associated with selling products and services on credit.

For further information:
Atradius Corporate Communications
Christine Gerryn
Tel.: +31 20 553 2047
E-mail: christine.gerryn@atradius.com 
URL: atradius.com