Austrade - Indonesian market

Austrade's Jakarta-based senior business development manager, Devi Tjut, gives aspiring exporters the low down on the Indonesian market.

Indonesia
About 10 per cent of Indonesia's 235 million strong population is able to afford some of the best known brands in the world like BMW, Nokia and high-end fashion labels. In fact, fashion is the untold Australian success story. Indonesian buyers made 57 major deals at this year's Rosemount Fashion Week - the largest number at the event. More importantly, they are consistent buyers of Australian, swimwear, adventurewear and teenwear.

High-end stores are concentrated in and around Jakarta - the capital. There is a surge in hypermarket developments in Indonesia. In fact, 32 new malls are being developed in Jakarta alone. This means more retail space for franchises and boutique stores - 17 Australian franchises opened in Indonesia last year.  

Aussie labels in Indonesia
Australian designer labels are mainly available at high-end multi-label stores, which are concentrated in Jakarta. Along with several international labels, these stores together stock over 40 high-end Australian labels including Marnie Skillings, Fleur Wood, Melanie Cutfield, Nevenka, Moss & Spy, Jayson Brunsdon, Vallen, Mint, Mad Cortes, Eileen Kirby, Lily & Charlie Brown, Alannah Hill, Alice McCall, Kirrily Johnston, Willow, Camilla & Marc, Nicola Finetti, Tina Kalivas, Josh Goot, Carl, Sass & Bide, Ksubi, Lover, Wayne Cooper, Zimmermann, Hussy & Madame Marie, Zayt, Brigid McLaughlin, Oscar the Third, Ksubi, Frisoni Finetti, Laurence Pasquier, Vicious Threads, Alice McCall, White Suede, Lisa Ho, Third Millennium, Bettina Liano, Yeojin Bae, Wish and Truese. Austrade Jakarta has been working closely with these stores to further develop the market.

Breaking into the market
* Find out how the market works.
Know which Australian and international labels are currently available in market, what the distribution channels are, who the players are, who their target customers are, whether they follow Northern or Southern Hemisphere seasons.
* Work out your export pricing.
Take into account the differences between developing and developed countries and consider the differences between high vs low market entry barriers.
* Take advantage of Austrade's on-the-ground network
Austrade can provide the essential local market knowledge, practical advice, contacts and ongoing support for Australian exporters.

Reaching out to buyers:
Most Indonesian buyers regularly attend the spring/summer fashion week in Sydney, and place an order on the spot if they like what they see. Otherwise, they will choose from your look book and line sheet to order a small quantity initially, with a good chance of repeat order if they are happy with the performance. The bigger your collection, the better, as it gives them more variety to choose from. However, they're not particularly keen on "Made in China" labelling.

Indonesian buyers are not new to western fashion. They stock a range of international labels, some of which have been in the market for much longer than Australian labels. So they're used to receiving a high level of professional service and a relative ease of transaction. They will naturally expect similar level of service from you.

Providing a good level of service can be as simple as sending an order confirmation immediately after order placement. It's easy to overlook this process; nevertheless this is a crucial step as it indicates your professionalism.

Sending an order confirmation also minimises the risk of problems such as getting into a dispute where there was a mistake in the order taken in style, size or quantity or where buyers delay or refuse payments because they forgot or simply changed their mind. At the very least, order confirmation should outline the style, price and quantity, the expected delivery date and payment method including bank details. Buyers will also normally provide you with their shipping details at the time of order placement.

Payment terms are normally done in FOB and can be made in Australian or US dollars. Payment methods include bank transfers or credit card. Requesting a 20 to 30 per cent deposit for an initial order is acceptable with the remainder to be paid before delivery. After several repeat orders, however, buyers will normally expect credit terms of up to 30 to 60 days. Some buyers will also expect five to 10 per cent discount on advance payment.

By Devi Tjut