“ The government needs to establish clearer regulations on taxes in addition to labour laws and subsidies in order to better support the country’s manufacturing industry. ”
Our company was established in 1992 and we first began trading boots in the market before manufacturing our in-house shoe brands Andre Valentino and Studio Nine. We employ 300 factory workers and 500 staff members that are based in our offices; every aspect of our business operation starts from our customers which are a central pillar to our company. Throughout the years, we built a notable name for our company and thus we began offering our products in renowned department stores in Indonesia such as Sogo. It was through this measure that we began building our customer base and thus as our business expanded, we began retailing our products in Seibu, Metro, Central, and Matahari department stores. We primarily focus on consignments despite having our own retail stores. Our shoe products are well-known throughout Indonesia for their durable quality that is primarily due to our strict production standards. We source the highest-quality materials in the production line of our shoes including thread from Germany as well as components from Italy. Providing the utmost product quality to our customers remains a part of Saga Machie’s corporate principle that we continue to uphold.
Currently, Saga Machie is focused on the manufacture of shoes; moving forward, we are looking to diversify our product range into accessories while also seeking to emerge as a lifestyle brand as the ultimate goal. Industry players continue to develop a brand that customers are able to identify with, and we are looking to participate in this movement. We hope to carry out this measure similar to the retail of our footwear by starting with the trade of accessories while analysing the market response before we begin the in-house manufacture of these products.
We believe that exports will continue to remain weak moving in-line with a decline in market demand that continues to occur globally. However, we remain optimistic with local demands given the Indonesian government’s commitment toward areas such as infrastructure growth. In our view, domestic spending would therefore translate into an increase in domestic demand hence we are preparing ourselves in order to fulfil this prospective uptick. For the medium-term, Saga Machie will shift its business focus toward exports once the market outlook improves.
The government needs to establish clearer regulations on taxes such as making it easier to register as a tax payer in addition to labour laws and subsidies in order to better support the country’s manufacturing industry. In this regard, the government ought to learn from countries that have taken the necessary steps to overcome challenges in the aforementioned areas which had previously been done by countries such as China, Taiwan and South Korea. Nevertheless, we also stress the importance for the Joko Widodo administration to strike the delicate balance between protecting national interests while also encouraging foreign investors to carry out business in Indonesia. Moreover, human resources remain a challenge for our company particularly because the retail industry requires a specific set of skills that requires a background in higher education. Hence this need necessitates the government to produce skilled human capital to better improve our industry.
We acknowledge the bias of local consumers particularly toward overseas products; however, we are optimistic that this mindset will change as the country progresses. In addition, consumer behaviours have changed significantly compared to 10 – 20 years ago when Indonesian consumers were subject to a limited number of products and brands that were offered in the retail market.
In recognising the significant number of brands that are now available in the retail market, Saga Machie has found it in its interest to develop a distinct brand through product development, competitive pricing, and stringent product quality, as well as a better understanding of our customers by knowing the local nuances and preferences. We believe that the development of a consistent brand name would ensure companies withstand any difficulties because of the connection that has been established with the consumers.
In spite of our ongoing presence in ASEAN markets such as Singapore and Malaysia, we remain focused on expanding our market share in Indonesia. To ensure success in this regard, we will aim to improve upon our branding strategy, product quality, innovative design, and customer experience. As such, Saga Machie will prioritise on exports to the ASEAN market and Asian region. Upon improving our manufacturing facilities as well as increasing our production capacity, we will then look into Europe as a target market for exports. Nonetheless, we will continue to utilise our existing advantages to further our renown for durable shoes in Indonesia.
We remain open to partnering with companies who share similar values to Saga Machie namely in regards to our commitment towards our customers. Moreover, we are interested in establishing long-term cooperation with firms that can also offer capital investment, know-how, and technology transfer, particularly in production optimisation and product development.
We hope that foreign investors remain open to conducting business in Indonesia and willing to invest in the country because of its immense potential in terms of its growth and development.