No, this isn’t going to be a list of the
one million things, but as my time in Indonesia comes to an end, I thought I
would sit down and provide my perspective as to what it has been like working
in the Indonesian market. Well put simply, it has been an amazing experience. Well of course I can’t just leave it at
that! It has been an amazing journey and learning experience from both a personal
and business perspective, learnings that I expect I will carry with me for some
time.
Indonesia is an incredible place with high
growth potential both for local businesses, as well as businesses and
individuals from overseas looking to invest into Indonesia. There is so much
happening in Indonesia and for the joint venture that Telkom and Telstra have
established, we have had our own journey in navigating the business environment
in this market. Like everything else, (including the traffic), establishing the
joint venture in Indonesia was very much a journey, and to understand how best
to navigate your path to maximise the opportunity, you need to first understand
the market itself.
Indonesia is going through a significant
growth phase at the moment, and Indonesia’s demographics are a great starting
point to suggest they will continue to see this growth continue through a
digital lens. With a population of more than 250 million people, and the
average age being 28[i], there
is a rapidly growing and eager young working population.
As such, this also means a growing desire
to leverage new found purchasing power to determine lifestyles. This has been
best represented by the penetration of mobile phones into Indonesia standing at
121%[ii]
and Smartphones accounting for almost 1 in 4 of those. Indonesia, as of 2014,
was the third largest “Twitting” nation and the second largest Facebook nation[iii].
This to me demonstrates a population that is highly connected and, with only a
21% Internet penetration rate, there is clearly further opportunity for
Indonesia to expand the digital aspect of their lives for both public and
business services.
The reason why I view these figures as
important is that, as for any market to achieve success in our digital era, it
needs to be connected and have a population which is digital savvy. Indonesia is
clearly rapidly moving in that direction. With the fourth largest GDP in Asia
(closing quickly on Japan),[iv] combined
with a Government under President Jokowi, which is clearly striving to create a
market open to investment and value creation, Indonesia is on its way in
positioning itself as a growth centre for many years to come.
So Indonesia is a growth market and
becoming highly digital, well pack your bags and head over, right? … Ok, well
glad it sounds exciting but before you do head for the airport let me share my
journey with you so as hopefully you can realise that success you seeking. Prior
to moving to Indonesia, I had travelled to Indonesia many times - and no not
just Bali before you ask – I believed I had experience in knowing what
Indonesia would be like, the culture, what it meant to do business, and
managing the joyous travel times between meetings. I was clearly only scratching
the service when it came to understanding what it means to work in Indonesia.
Well one of my first learnings is that
“jetting” in to visit and experience the working environment is simply not
enough from which to draw experiences. In
fact it comes down to the actual experience of living and breathing the market,
and connecting with the people to understand the real opportunity and likewise the
challenges faced by the teams on the ground.
In establishing our business in Indonesia
we knew there would be challenges, but we had underestimated the breadth of
these challenges, as well as the amount we would need to adapt to ensure we
established a path for success. As we landed on the ground to establish our
business we quickly realized what we had hoped would be a few bumps in the road
ended up being some obstacles in the road that would need to be navigated:
1.
As we were working with the
largest telecom provider in Indonesia, doing business would be easier. Of
course we all knew it would be different to other markets, but that was why we were
there to enter new markets and create new value. Shortly after we arrived
however there was a change in Government, which led to a change in our partners’
leadership. This was apparently the norm given it’s a state-owned business.
2.
The supply chain we were
familiar with from Australia, or other parts of the world, would already be in
place in Indonesia, with the recognition we would need to adjust some terms regarding
language and local terms and conditions. The supply chain proved to be very
different to our expectations, with vendors engaging with their distributors
differently. In addition, the responsibility of managing the hardware supply
chain proved to be very much the providers’ responsibility, especially given
the proactive service that we were seeking to provide our customers.
3.
Given we already had the
support of our joint ventures partners executives, it would simply be a matter
of being open for business would immediately start to drive the opportunity. Of
course, given we were going to a new element of the partner’s business, there
would always be some people not totally happy with our approach but that was ok
as “they would simply adapt to us”. We
soon realised as the new kid on the block it was up to us to build those local
relationships, establish trust and ultimately demonstrate our value to our
partners and customers to encourage those partners to collaborate with us
instead of seeing us as a new threat to their existing business models.
4.
Business engagement would be
transparent as it would be the same as many other places in Asia. It would
simply be a matter of re connecting with the local representatives of our
global partners and we would be ready to go. We quickly learned that many of
our technology partners already had their own local partnerships established
with in country System Integrators and telecom divisions, and in matter of fact,
we were disrupting a model that was believed to already be working well.
Now with all of
this said the path to securing our business license took longer than we had
expected, but this ended up being a hidden benefit in as it gave us the time to
understand these challenges and many others as we were establishing this
business. That proved invaluable as the time we gained gave us the window to
understand how we could set ourselves up for success. Whether it was building
one of the largest stakeholder management maps I have ever seen, or
establishing a supply chain across a nation from zero, through to redefining
the localised product set we would need to demonstrate relevance, all of these
developments helped to shape what our business is today. Through these
learnings, and the business’ ability to adapt to them, we have realised the
results that I have previously shared in earlier blogs.
The message I
hope you take away from this blog is that there are a few key critical
considerations when establishing your business in Indonesia:
1)
Ensure you have a clear target and plan – don’t assume you know what it is as soon as
you step off the plane but make sure you understand the environment you are
looking to operate in and then start to shape your plan.
2)
Make sure you have a solid partner you can work with
who understands the market you are seeking to address and more importantly is
able to help you navigate through the challenges, and equally help you to
identify new opportunities you may not have originally identified in your plan.
3)
Be agile. Things won’t work out the way
you expect them to, so you can sit there and get frustrated, or actually look
at what you can do differently to navigate the challenge or incorporate the new
challenge into your plans and make it part of the goals you are looking to
address.
4)
Lastly, - and in my view this
was one of the hardest things I had to do personally - be patient. There is a different sense of urgency in Indonesia,
what I learned was that whilst I can get frustrated that things weren’t moving
fast enough. I needed to find a different approach, share the goal that I was
trying to achieve, and leverage the local team around us to understand how we
can best reach that outcome in the fastest time possible without the
traditional voice like the kid in the back seat of a car, “Are we ready yet?”
I am sure other
people who have worked in Indonesia will share other challenges from their
experiences in Indonesia and ultimately some of their own critical
considerations but for me this is what gave me increased confidence in our
ability to succeed. With these considerations in mind, I believe businesses
have a great chance to realise the opportunity that is Indonesia. An
opportunity that has over one million registered businesses of different sizes,
an opportunity that if approached with eyes open can result in businesses being
part of an exciting growth market, all of which surely must be enough of a
reason to want to do business in Indonesia … right?
1 comment:
Hi Nathan,
Interesting Blog and very topical for me as I'm trying to work out how to expand our business into Indonesia at the moment. I think the points you raised will give me a bit more focus.
thanks for sharing.
regards,
Matt
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