Global Business Guide Indonesia

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Investment | Business Services
Zyrex Mandiri Buana | Mr Timothy Siddik
Mr Timothy Siddik

I believe there should be a national campaign and action towards promoting Indonesian brands. I think there has been a lot of ignorance and consumers are not well informed enough to know how to choose between brands.

Mr Timothy Siddik, President Director

Zyrex is a computer manufacturer and IT services company which was established in 1996. What is the background to the founding of the company and the current strategies being followed to expand your market share?

I began doing business in Indonesia in 1991, I had returned from the United States where I was working as a software engineer in satellite communication in Silicon Valley. When I returned to Indonesia I began working in software development for an Indonesian bank but I felt that this sector was not ready at that point. I looked at various opportunities in Indonesia and I started talking to customers about solutions for LAN integration, hardware solutions, software etc. and I was an expert in this so I began selling solutions to customers. Soon they began asking for the computers themselves and I did not do this nor did I have any intention to do so. They still needed this service, so I picked a computer brand that was not being represented in Indonesia. I ordered these computers on my credit card and was ordering hundreds of units. Along with the added value I provided, it made the company profitable and well positioned in the Indonesian market. I flew to the USA to see the company and to ask for exclusive distribution rights and they said no so I returned to Indonesia frustrated. I spoke to my customers and told them I was going to stop selling computers but they still needed the products so I decided to start my own brand. A whole new horizon opened up that I did not expect; my customers trusted me to be able to establish the brand. I only use the latest technology, bring in the highest quality components and assemble them in Indonesia.

We began selling to private banks, then insurance companies etc. in 1998 the Asian crisis happened and the business activity just dropped. I rationalised, cut expenses but I did not want to make redundancies as I wanted to continue serving my customers. I took advantage of the cheaper advertising costs available that I could not afford before and began promoting myself to customers using the angle of preparing them for ‘Y2K’. When other brands were running away, we as an Indonesian company stayed put; that gave us significant momentum and we grew substantially since then.

For the future, we have various market segments that we want to cover. We currently cover the commercial sector and a couple of years ago we entered into retail using distributors in Indonesia. Another segment is the state sector such as ministries and state run vocational schools. This is a good segment for us as the goal is that if hundreds of thousands of students are using our computers on a daily basis then in the future when they are professionals they will remember they used Zyrex so it is an investment in branding for the future. As an Indonesian brand, we are the computer company that can focus on all of these sectors.

In the retail and consumer market, customers can switch quite quickly when new offers or products come along. It is a high growth sector but we are controlling our growth as we could go all over Indonesia as we have the network.

But, if you are present all over Indonesia then you must have the customer support there as well and therefore we must have the resources available before we can do this.

The commercial and corporate sector has a different strategy; we upgrade ourselves to offer solutions as well as hardware such as storage systems. We call this a ‘managed service’; companies lease the computer units for example. Smaller companies, which do not have an IT department but need the expertise to protect their data and for other services such as virus protection, need such services. This is currently offered in Jakarta, Surabaya, Makassar, Medan and we are the only Indonesian IT company that can do this.

Strategy wise, we will continue in the same direction and will upgrade to offer new services to our customers to offer a complete menu. For the government sector, we will focus on the education sector as opposed to areas such as E-KTP and other technology for which we may act as a supplier. For retail it is important to maintain the brand in the mind of the consumer through our marketing efforts.

Indonesia and the growing secondary cities outside of Jakarta will be our focus. In Singapore our laptops are being used by primary schools and we set up the network but this is on a small scale as Indonesia is a big enough market for us.

What do you consider to be the main challenges being faced to expand the business?

There is a lot of competition in Indonesia from the big brands as they are very good at lowering their prices. We have to stay fighting against this as an Indonesian company. The greatest challenge really lies in resources for us to ensure that we do not expand beyond our capability. There are years when you can grow very fast and you have to control yourself as a business.

The Indonesian market tends to prefer international brands as opposed to local brands for technology products, what do you think needs to be done to improve consumer awareness of local brands?

I think it is about education and instilling pride in Indonesians for Indonesian products. The government has also not been supportive enough, although there are regulations to use locally made products, the implementation is not consistent. If you look at South Korea, the government supports local brands by using their products. If the government is not using and supporting local brands to set an example then others will not.

I believe there should be a national campaign and action towards promoting Indonesian brands. I think there has been a lot of ignorance and consumers are not well informed enough to know how to choose between brands. I think this is the case for not only computers but also for shoes, mobile phones, televisions etc.

Global Business Guide Indonesia - 2012

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