Indonesia is a country rich in natural resources and has a young and growing population. As Australia’s closest neighbour, and with 240 million people, it’s no surprise that this diverse country presents some compelling business opportunities.
Indonesia has the key ingredients for a relatively high and sustainable growth outlook - with urbanisation at 44%, a literacy rate of over 90% and a young population (27% of Indonesians are under 15 years of age with a median age of 28).
In 1962, Indonesia’s population reached 100 million; it passed 200 million in 1997 and will likely exceed 300 million by 2050 according to World Bank projections.
While Indonesia’s economy and population has been growing, so has real GDP per capita. GDP per capita is projected to reach USD 5000pa within 5 years. This has seen very strong growth in consumer spending and a rapidly growing middle class.
According to Geoff Coates, Executive General Manager, Commonwealth Bank Indonesia, “Rapid growth in disposable income in Indonesia presents great opportunities for Australians doing business in or with Indonesia”.
Tourism, education, export/import of goods and services, infrastructure, property related activity and many other areas of opportunity will be evident in the future.
Know your market
Notwithstanding the growing range of opportunities for Australians looking to do business with Indonesia, like many new business ventures it does require some planning.
“Before undertaking a new business venture, it is very wise to spend some time and money planning how you will conduct your business and who with,” Geoff says.
“We spent a lot of time getting to know the market in Indonesia so that we clearly understood where the business opportunities and risks were and importantly where we believed we had the capability to compete. In particular you should not always think that what you do in your home market will necessarily be successful in another market and it is very important to build relationships”.
Five questions to ask before entering a new market
1. Who are my target customers and what are their needs?
2. Who are my competitors and can I compete with them?
3. What will be my competitive offering?
4. What are the differences in the new market?
5. Who do I engage to ensure I can succeed?
Organisations such as AUSTRADE, Australian and Indonesian Governments and their Embassies and Consulates can assist in getting information on doing business in Indonesia as well as a large number of professional firms. The Australia Indonesia Business Council also provides useful information.
“Naturally we are very happy to assist our customers where we can if they are looking at business opportunities in Indonesia” says Geoff.
A country connected
With mobile phones coming to Indonesia before most had landlines, Indonesia has leapfrogged into the mobile era. More than 70% of teenagers have mobile phones and there are over 100 million mobile phones in the country.
Indonesia is the fourth largest user of Facebook in the world and has been dubbed the most Twitter-addicted nation on the planet by online research firm comScore.
“The explosion of social networking in Indonesia, combined with the availability and access of mobile technology, a large and educated population and in particular their propensity to adopt new technology presents incredible business opportunities, says Geoff. “We are using social networking such as Facebook and Twitter to interact with our customers together with making our products and services accessible via smartphones.”
“I can see enormous opportunity for entrepreneurs and businesses in Indonesia for many years to come” says Geoff.
Geoff Coates is Executive General Manager, Indonesia at Commonwealth Bank.
Having operated in Indonesia for over 15 years, Commonwealth Bank currently has over 100 points of presence, including 85 bank branches and 2000 full time staff. The businesses provide a competitive range of products and services to SME customers which include cash management, domestic and international payments, working capital, business and trade finance, foreign exchange, wealth management and life insurance.
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