[Jakarta] Singapore-based software company All ID primarily sells identification (ID) card printers, various cards and kiosks.
While the group has offices in the region’s main markets including Myanmar, Malaysia, the Philippines and Singapore, it is Indonesia that is its largest market and accounts for about 60 per cent of its sales, said All ID’s director for Indonesia Daniel Pang.
One of All ID’s key customers in Indonesia is telecommunications provider Indosat. Last June, a deal was reached for All ID to supply the telco’s SIM cards.
While Indonesia has the advantage of a large domestic market of about 280 million people, Pang noted that different cities in South-east Asia’s largest economy have their own characteristics and requirements.
He noted that the capital Jakarta, for instance, is largely about industries such as technology and finance, while cities such as Kalimantan or Sumatra have more agriculture activities.
“(The Indonesia market) is huge, and there are many different types of segments we can approach,” Pang said.
As the Covid-19 pandemic tapers off, the Singapore Business Federation (SBF) and Enterprise Singapore (EnterpriseSG) are seeing more companies from Singapore eager to venture into new markets, with Indonesia high on their list.
For Benjamin Tan, the chief executive of International Cancer Specialists (ICS), the company’s near-term vision is to establish partnerships with hospitals and healthcare providers in Indonesia to improve healthcare accessibility there. This, he added, is a problem that’s been around for some time but has fallen through the cracks.
ICS currently has a programme that allows patients from Indonesia to go to Singapore for a first round of treatment, and return home to undergo treatment with the supervision of clinicians in Singapore and ICS’ partners in Indonesia. Typically, patients fly into Singapore from Indonesia and remain there for the full length of the treatment.
ICS’ arrangement reduces the cost for cancer patients, and cuts the time and effort needed for patients to seek medical treatment, Tan said. He added that the company is targeting the middle-income segment, and will look to expand its services into the lower-income group in the longer term.
According to Lim Jing Jun, Enterprise Singapore’s regional director for South-east Asia, there has been a “rebound of activities and interest in Indonesia” from Singapore companies amid the progressive reopening of international borders last year.
The GlobalConnect@SBF programme – a partnership between the Singapore Business Federation (SBF) and Enterprise Singapore – for instance, revealed a rising interest in Indonesia from 2020 to 2022.
The programme aims to help Singapore companies who are looking to internationalise for the first time, as well as companies that are expanding their presence overseas.
Last year, GlobalConnect@SBF provided a total of 489 business advisories and facilitated 22 projects in Indonesia under the Singapore Enterprise Centre in Jakarta. This was up from 298 business advisories and 11 projects in 2021, and 137 business advisories and three projects in 2020.
The programme also supported a total of 297 unique companies in Indonesia in 2022, versus 185 in 2021 and 78 in 2020.
SBF’s country head for Indonesia Hisyaamuddin Abu Bakar said that Indonesia is getting as much interest as Vietnam from Singapore companies.
These two markets are in “hot demand” from Singapore companies looking to expand in Asean, he said. Most of the enquiries come from small and medium-sized enterprises (SMEs), although a few large corporations have expressed interest as well.
It is not only the bigger players who are eyeing opportunities in the vast Indonesia market, with many Singapore startups, too, entering the fray.
Wesley Harjono, managing partner at global innovation platform Plug and Play in Indonesia, noted that Singapore startups have a reputation for producing cutting-edge innovations and products that are often two or three steps ahead of their Indonesian counterparts.
“While this can be a positive factor in terms of creating a ‘blue ocean’ for business opportunities, it can also pose challenges in terms of creating product and brand awareness and educating the market in Indonesia,” he told The Business Times.
Harjono said that Indonesia’s startup ecosystem has been growing rapidly in recent years, with a rising number of tech startups and increased investment from both local and international sources.
“The country offers a large and diverse market, with a young and tech-savvy population and a rapidly growing middle class. This presents a range of opportunities for startups in sectors such as e-commerce, fintech and logistics, among others,” he added.
Aditya Batura, the chief executive of Singapore-based education technology firm Codomo, said the company has partnered with Jakarta’s PPM Management School to roll out Rolljak – a gamified learning platform that will raise the engagement rates of students in school.
He said that Codomo has already onboarded some major universities in Indonesia, and is looking to grow its presence in the country.
Sector-wise, Indonesia is seeing interest from Singapore companies that “align with Indonesia’s economic growth priorities”, said SBF’s Abu Bakar, citing those from sectors such as retail, healthcare and education.
Companies in sectors that align with manufacturing companies are also eyeing Indonesia due to lower production and labour costs, while firms in the green energy and sustainability sectors have also expressed interest, he added.
Enterprise Singapore’s Lim, meanwhile, said her team has seen more companies go beyond the “natural landing point” of Jakarta and head to other populous cities such as Surabaya and Medan.
She also stressed the importance of investing time to understand local business practices, norms and preferences.
“While Indonesia is an attractive market, doing business there is fundamentally different from doing business in Singapore,” she said.
“Singapore companies must also be willing to spend time in the market to assess their market-product fit and be ready to tailor to local needs, as localisation is key to success in Indonesia.”
Abu Bakar described the Indonesia market as a “marathon game” for companies, and he spoke of the need of having a sound understanding of the market before making any commitments.
Companies should not just “think global”, but should also “act local” to capture the domestic market, he added.
Source: The Business Times © Singapore Press Holdings Limited. Reproduced with permission.