Good importers are committed to trade and importing; they are engaged in landing and clearing products all the time. Finding the right importer and building a strong relationship with them will ultimately mean better access to the market.
The cardinal rule about forming partnerships in Indonesia is ‘take the time to get it right first time’. This is especially important as breaking a business relationship may result in a degree of humiliation of the rejected partner and this can have adverse implications for the exporter if the breach becomes known in the broader business community. The exporting company may, for example, be described as ‘unreliable’ or simply be seen as having been incompetent in making its original selection—especially by companies with a potential interest in the business.
It is worth noting that Indonesian organisations work on a very hierarchical basis. Except in the case of very large companies, an export manager should be talking to the head of the Indonesian company or at least to a director or, in the case of large companies, to the head of division or President Director of the relevant subsidiary company. At times, it is also very helpful to involve more senior Australian executives to gain access to senior counterparts in Indonesian organisations.
The way forward is not by one-off contracts, but by long-term relationships. Maintaining personal relationships is the key to long term success in the region. Personal relationships are important in business in Indonesia. Indeed, some people suggest that Indonesia is the country in which they are most important. But, while it is usually helpful to foster good personal relationships with business partners in Indonesia, commonsense business principles should not be neglected for the sake of good relations per se. Care also needs to be taken not to rush into relationships on the basis of big claims about influence alone.
Keeping the relationship issue in perspective
It is true that relationships are important in Indonesia—so it’s good if you have an agent or representative with the right contacts especially if you are doing business with government—but you need something more, says a trade consultant with wide experience in the Indonesian market.
‘You will meet people who claim to be and perhaps are the cousin or brother of a Minister, even the President or the CEO of a big company. Sometimes such people can lead you to business but some don’t really have the influence they claim and some are simply ‘rent seekers’ wanting a rake-off but with little capacity to really facilitate business,’ he said.
In summary, you should check a potential partner’s business credentials as well as the reality and usefulness of their ‘connections’. The big lesson is: don’t rush in to a partnership arrangement. Take time to ‘suss out’ the options and get good advice, concludes the consultant.
A recent survey looked at partnerships and alliances between Australian companies and their local counterparts in Indonesia, Thailand and Malaysia and reviewed the key to successfully weathering the ‘Asian economic crisis’ in 1997–99. It found that:
- Australian exporters successful during that period viewed their intermediaries as strategic partners.
- Empathy is important. Understanding the local partners’ situation and helping out where possible goes a long way towards maintaining and strengthening relationships.
- Trust, communication and commitment are the top three relationship factors linked to business performance. These involve more than just words: they required tangible actions, clear signals and regular contact.
Relationships: choose carefully
Some years ago, a major Australian industry body was planning a big promotion in Indonesia. They needed a local representative in Jakarta who could be a focal point both for organising the promotion and as the key local personality in the event and for the longer term. A senior executive from Australia with limited experience in Indonesia heard of a particular person who was said to be well connected and selected him on the spot. As it turned out, this person was a very small player in Indonesia and did not have much capacity to help. More importantly, he was not respected in Indonesian business circles. This had a major negative effect upon the whole event.