Indonesia is the only country in Southeast Asia that is a member of G20 nations. Since joining the Group of 20 in 1999, when the country was in the recovery stage after the 1997-1998 economic crisis and was considered an emerging economy that had very large economic size and potential in the Asian region. After 25 years of its membership Indonesia’s economy has been rapidly growing and so have the businesses on all levels across the board. It has now annual incomes of US$4,580 and the largest economy, making up more than one third of the economic capacity of southeast Asia in terms of GDP.
Going Digital and Becoming More Tech Savvy
In the early 2000s when the social media age began, the businesses were still employing conventional practices, although some big businesses had already adopted the early technological shift, but the people—the consumers were not all tech savvy. So, it took a while for the country to pick up the trend of technological advancement. In the early 2010s, an eCommerce platform was born and was able to penetrate the market, which in turn encouraged the births of more eCommerce platforms in the country. But in the beginning of the eCommerce age in Indonesia, people were still reluctant to make business and financial transaction due to the fear of fraud or scam and the difference between the photos put on the Internet and the original items when received. But slowly that view was changing; the sellers are trying to improve their product quality and credibility so that they can make more sales and the eCommerce platforms are implementing verification method to certify authentic or real sellers before they could put up their products on the platforms. So, yes, slowly it changes the game of the eCommerce business in the country.
The peak of the eCommerce or digital business in the country is believed to occur during the pandemic back in 2020-2021; the same case would be found pretty much everywhere else in the world. During that period of time, people spent a lot of their money on online transactions and purchases, from food to stationary, from cosmetics to clothing. People enjoyed the ease of shopping; from choosing the products on their fingertips, to check out their items and to make digital payments without going to the actual stores and risking their health being around with other customers—they could just do it from the comfort of their homes. In short, the technological infrastructure has been thoroughly built to support Indonesian businesses to scale up.
Research and Development: Product Diversification
Another challenge the Indonesian businesses are facing to stay in the business is how to diversify and innovate their products. To stay in the game, they really have to be versatile and adaptive otherwise they will be left behind in the race; not only that, consumers will also shift to other products that are more dynamic and different. Indonesian businesses can look into the investment for the research and development to enhance their product diversification: what the market wants or what the market needs. For example, a clothing company producing different designs for different seasons and producing clothes for children, youth and adults. A healthy drink company producing drinks in different flavors and bottle sizes. A body care company repackaging the shape of their shampoo and body wash bottles, changing their colors and producing more variants for the consumers to choose from. There are so many ways of product diversification, Indonesian businesses can pursue to stay in the business because Indonesian consumers love to see new things including flavors, scents, bottle shapes, packaging colors and even something more scientific such as BPA-free plastic bottles or the chemical ingredients of their skincare products. Businesses have to know how to make people feel happy when they feel they are following the current trends in the country. It’s the psychological mind game called “FoMO”—Fear of Missing Out.
Entering Global Competition: Go International
Indonesia indeed has its own business ecosystem. With a market of 270+ million people and still growing in the next years, any businesses are believed would flourish in the country. But that’s not what the true purpose of setting up a business in the first place. The next challenge to scale up Indonesian businesses is how to make it marketable in the international market. Global competition is tough, fierce and full of the big fish from the advanced economies and businesses. From staying home to going international, Indonesian businesses have to invest a lot in the international market research to see what the international communities like. They can start with the Southeast Asian regional market first and see what Southeast Asians like. There are currently some Indonesian products that are sold in other countries, from food products to cosmetics. But there should be more. Although they are millions of big brand names’ items that are made in Indonesia sold across the globe, Indonesian businesses still have to do more to penetrate the international market. If international consumers are proud and happy buying “made-in-Indonesia” items that means the demand is there and Indonesian businesses should enter that market. It’s hard to break but it’s not impossible to penetrate.
