Global Business Guide Indonesia

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Joint Ventures | Export
Enesis Group | Mr Bambang Soendoro
Mr Bambang Soendoro

The greatest benefit to us would be partners that can bring new products as well as research and development capacity. We can use our marketing and distribution infrastructure to bring new products to the Indonesian market.

Mr Bambang Soendoro, President Director

Enesis Group was established in 1988 and diversified into consumer goods at the end of 1990s. What can you tell us about the background to the founding of the company, your current export markets and the strategy that the company is following to date?

The company was established by our founder Mr Chin in the late 1980s. The first product that we offered was a mosquito repellent lotion and it was the first in its category in Indonesia. In the early 1990s it was rebranded to the name Soffell in order for us to market the brand internationally for export; this was very risky but proved to be a very successful transition. This is now the second largest selling product in its category in the Indonesian market.

The second product that we offered to the market was Adem Sari, a supplement and functional drink that was created in the mid 1990s. It is now a market leader in Indonesia with approximately 80% market share.

At the beginning, the company took on two portfolios of products; personal care and household care, with the second being functional drinks. In household cleaning products, Kisprey is one of our products which is an ironing aid and currently holds 60% of the market share therefore it competes against some of the largest companies in the sector such as Wings and Unilever. Vegeta is another of our products which is a drink supplement for digestion and has also proved highly popular at fourth or fifth in sales within its category in Indonesia.

Our strategy is to offer innovative products through our focus on research and development. Another area of expertise that we have is in mass communication and mass distribution as those are very important for us to be able to compete on a large scale. Our portfolio is not based on certain raw materials or processes; it is about looking for a ‘white space’ in the market and examining consumers’ needs. To be able to do this we do not offer a lot of products; for every product we produce, we must then create the supply chain to support it and this takes time as Indonesia is growing quickly and we have to find new ways to meet the demand.

We started building a partnership with OEM manufacturers for new products so that we do not have to build the supply chain ourselves. For example, our first ready to drink product called Coolant has been manufactured by an OEM and there are two other products that will soon be launched using this method.

In terms of distribution, we decided around three years ago what areas we should cover on our own and what we should do with distribution partners. As we are not as big as our competitors, we only do our own distribution in the Jabodetabek area and for the rest of Indonesia we use regional distributors.

For communication and to reach the mass market, television commercials have proved to be the most effective so this is where our advertising efforts are concentrated. Now we are starting to deploy digital marketing as well. Coolant for example, which has a younger target audience, is suitable for digital marketing.

We are very strong on the downstream, so now we want to move more upstream. In cleaning consumer goods for example we have introduced new variants and are competing with the biggest players. We feel that the Indonesian consumer is now looking for more ready to consume solutions so that is why we are moving into more functional products such as drinks. This is where we see the ‘white space’ in Indonesia.

Looking internationally, there are two ways of approaching it. Traditionally it is to look at it opportunistically and to export what you have so we did this with Soffell and Adem Sari to the ASEAN, Middle East and for the future, to Africa.

For the non traditional way, you create a product for that market. Our founder has a knack for identifying specific opportunities and we tried to do that in China. We built the concept and have our own marketing and sales team in China but used OEM for the manufacturing. This first product will be a base for our further expansion into China as we learn more about the market.

What do you expect as the main challenges in the consumer goods sector in Indonesia over the coming years?

The main challenge is further establishing our market research infrastructure as we are one of the only companies to do this in Indonesia. We are really trying to sense what direction the consumer is going in but it is difficult so we are developing our systematic capability to gather together all the data from our different departments such as sales and then condense that into promising leads for developing new product ideas. We are also scrutinising the world to come up with products that are not just from the Indonesian consumer perspective as many successful ideas were not born here; there are ideas that have been adapted to the market. To do this we designate benchmark countries and monitor them such as Thailand for Asia and see if it can be applied her as well as whether Indonesian consumers can afford it.

The growth of modern trade is another area that we have to concentrate on. In Indonesia all the FMCG players now have to understand modern trade and retail in more depth. Modern trade is providing a more even playing field for new players; it is more expensive as you must have your product displayed which is not the case for general trade. These are issues that we are incorporating into our promotional efforts such as creating packaging that is easy to use and nicely designed so that it can be displayed and stored at home.

The company is already exporting its products internationally to markets such as the Middle East. What markets are you targeting for the future?

Nigeria is a market that we are interested in entering for the future for the Soffell mosquito lotion. So far our marketing has been mainly in Asia and a small amount in the Middle East. We think building the brand is very important so we are very selective about the markets that we enter.

India is a country with a lot of opportunity but it is similar to China in that it is very tough to enter. Nigeria represents West Africa and other Indonesian companies have been successful there such as Kalbe Farma and Indofood so there is a network to tap into there.

How is the company positioned to work with international partners for new products and distribution?

Enesis Group is a private company and our products are internally developed. For the future, I think we have to look to the rest of the world in order to keep up with the fast pace of growth. We do not have any experience working with international partners but we are open.

The greatest benefit to us would be partners that can bring new products as well as research and development capacity. We can use our marketing and distribution infrastructure to bring new products to the Indonesian market. Another area would probably be for setting up operations in markets such as China and others that we wish to enter. A partner which could help us distribute and manufacture for reaching further international markets would be a good fit for us.

Global Business Guide Indonesia - 2012

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