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02 Feb 2017 Updated 10 Sep 2018

Indonesia

Health and Wellness Opportunities

Indonesia's healthcare and wellness industry has been identified as a fast-growing industry in Indonesia. This is attributed to the country’s large population and growing consumption patterns. In addition, the introduction of universal healthcare – Badan Penyelenggara Jaminan Social Kesehatan (BPJS Kesehatan) – by President Jokowi to have universal healthcare coverage for all Indonesians by 2019 has presented a potential untapped market for companies in this sector.

To encourage Singapore firms to embrace the myriad opportunities in this sector and to better clarify the steps that companies need to take to enter the market, we organised a workshop in Jakarta from 24- 27 October 2016 focused on the health and wellness industry. More than a dozen Singapore firms, including Activhealth Investment Holdings, Amber Laboratories, Diabetic Specialities, Dynamed Biotech and Hyphens Pharma, participated in the iAdvisory Workshop. Market insiders including Nielsen Indonesia and Cekindo Bisnis Group, as well as well tax and customs specialists and legal experts, shared key insights with the participants, while local firms including PT Kino Indonesia and Apotek K24 opened up about their experiences breaking into the sector.

Here are some of the key takeaways from the five-day workshop:

The Indonesian government has been working to streamline the customs process and to cut dwell times to 2.5 days, said Alpha Pacific Group. Employing a customs broker could help further speed up the clearance process.

For time-sensitive products, Alpha Pacific recommended using air freight, and moving goods immediately to bonded warehouses with cold chain facilities near the airport.

Product labelling in Bahasa used to be required on products at the time of entry but this is now only needed when the items are displayed for sale, the company added.

For more information on customs and licensing requirements, companies can visit the website of the Indonesia National Trade Repository

Indonesia is home to the third largest middle class in Asia. Indonesian shoppers are getting wealthier. The per capita income in Indonesia was USD $1,250 in 2006. Today, that number has grown to USD $3,800 and is expected to balloon to $8,700 by 2025.

With a growing populace in the higher-income middle class bracket, more women and millennials in the workforce and increased urbanisation and digitalisation, consumption patterns are fast changing in the archipelago. There’s a swelling interest in high-end brands, more emphasis on the shopping experience and an increased desire for greater convenience, said Nielsen.

There is now also a heightened focus on health and wellness. Consumers are drawn to products branded as “healthy” even if they are not necessarily so. The government has recently pushed more campaigns focused on healthy living and eating.

Consumption patterns in Indonesia are different from other Southeast Asian nations, and different market segments have different buying patterns. For instance, middle clas consumers are more willing to pay for premium products but those in lower income brackets prefer to buy products in smaller packaging e.g. sachets.

What can companies do to better their chances of finding success in Indonesia? According to Nielsen, Indonesians tend to embrace well-known brands so growing one’s market share is critical.

Building relationships is also very important, shared PT Kino. Foreign firms must make an effort to blend in with Indonesian culture — showing humility and respect, and learning Bahasa to communicate better.

Many rounds of negotiation should be expected when doing business in Indonesia, so patience is key. Sifting through regulations and licensing can also take time. Registering cosmetic products, for example, can take up to two months, while registering for food supplements or medical devices can take up to six months.

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